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EXHIBIT 3.3
Private and Confidential
THE COMPANIES LAW, 5759 -1999
A COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
OF
XACCT TECHNOLOGIES LTD.
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Articles of Association October 2000
THE COMPANIES LAW
A
COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
OF
XACCT TECHNOLOGIES LTD.
(Amended Articles of Association effective as of [October] ___, 2000)
1. The following regulations shall, subject to repeal, addition and alteration
as provided by the Companies Law (as defined in Article 2 below) or these
Articles (as defined in Article 2 below), are the regulations of the
Company (as defined in Article 2 below).
DEFINITIONS
2. In these Articles, if not inconsistent with the context, the words standing
in the first column of the following table shall bear the meanings set
opposite them respectively in the second column.
WORDS MEANINGS
Applicable Laws Each of: (A) the Companies Law, the
Ordinance, the Securities Law and other
Israeli laws, rules and regulations that
may be applicable to the Company from
time to time; and (B) to the extent
permissible under (A) the applicable
U.S. federal and state securities laws,
as amended and rules and/or regulations
promulgated pursuant thereto and the
rules and regulations of any stock
exchange or quotation system on which
the Company's shares are quoted or
listed;
Articles These Articles of Association as may be
amended from time to time as provided
for herein;
Audit Committee Carrying the meaning as ascribed to such
term in the Companies Law;
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Auditors The Company auditors from time to time;
Board The Board of Directors of the Company;
Business Day Sunday to Thursday inclusive with
the exception of holidays and official
days of rest in the State of Israel;
The Chairman The Chairman of the Board of Directors;
The Company XACCT Technologies Ltd.;
The Companies Law The Israeli Companies Law, 5759 - 1999,
and all regulations and orders
promulgated pursuant thereto as may be
amended from time to time;
Director(s) A member or members of the Board
appointed in accordance with these
Articles holding office at any one time;
Ex-Officio Director The President and CEO of the Company
from time to time in accordance with
Article 50.4;
General Meeting(s) The annual general meeting of the
Shareholders of the Company and all
other general meetings of the
Shareholders of the Company;
Month A Gregorian calendar month;
Independent Director(s) Directors qualifying as independent
directors within the meaning of Sections
239-249 of the Companies Law;
Non-voting Ordinary Share(s) The Non-voting Ordinary Shares of a
nominal value of NIS 0.04 per share;
Non-voting Ordinary Shareholders The holders of Non-voting Ordinary
Shares;
Office Holder Each Director and every other person
defined in the Companies Law as a "Nosei
Misra" and such other designated
executive officers of the Company;
Ordinance The Companies Ordinance [New Version],
1983, as amended and regulations
promulgated there under, that may be
still in effect from time to time;
Ordinary Majority More than 50% of the votes of the
Shareholders present
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and voting at a General Meeting in
person, by proxy or by other means of
voting acceptable to the Company;
Ordinary Share(s) Collectively the Voting Ordinary
Shares and the Non-voting Ordinary
Shares;
Register The Register of Members of the Company
administered in accordance with Sections
127, 128 and 130 of the Companies Law;
Registered Office The registered office of the Company
from time to time;
Securities Law The Israeli Securities Law 5728-1968 and
any orders or regulations promulgated
pursuant thereto as may be amended from
time to time;
Shareholder(s) the holder(s) of Voting Ordinary Shares
and Special Preferred Shares;
Significant Shareholder Any Shareholder holding five percent or
more of the Company's issued and
outstanding share capital or of the
voting rights of the Company, from time
to time;
Special Majority A majority of 75% or more of the votes
of the Shareholders present and voting
at a General Meeting in person, by proxy
or by other means of voting acceptable
to the Company;
Special Preferred Share(s) The Special Preferred Shares of a
nominal value of NIS 0.04 per share;
Voting Ordinary Share(s) The Voting Ordinary Shares of a nominal
value of NIS 0.04 per share;
In writing
Written, printed, photocopied, typed,
sent via facsimile or produced by any
visible substitute for writing, or
partly one and partly another and
"signed" shall be construed accordingly;
Year A Gregorian calendar year from
January 1st to December 31st;
Words denoting the singular number shall include the plural number and vice
versa, words denoting the masculine gender shall include the feminine gender;
words denoting persons shall include corporations, partnerships and other
corporate entities;
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Save as aforesaid any words or expressions defined in the Companies Law shall,
if not inconsistent with the subject or context, bear the same meaning in these
Articles.
The captions and headings as set forth in these Articles are for convenience
only and shall not be deemed a part hereof or affect the construction or
interpretation of any Article hereof.
LIMITED LIABILITY PUBLIC COMPANY
3.1 The Company is a public company as such term is defined in Section 1
of the Companies Law. The liability of the shareholders is limited,
and accordingly each shareholder's liability for the Company's
obligations shall be limited to the payment of the nominal value of
the shares held by such shareholder subject to the provisions of these
Articles and the Companies Law. .
3.2 The Company's objectives are to carry on any business and to any and
all such actions that are not prohibited by law. The Company may also
make contributions of reasonable amounts for worthy purposes even if
such contributions are not made on the basis of business
considerations.
SHARE CAPITAL
4. The share capital of the Company is NIS 8,200,000 (eight million two
hundred thousand New Israeli Shekels), divided into three classes of
shares: (i) 198,180,000 (one hundred and ninety eight million two
hundred thousand) Voting Ordinary Shares; (ii) 1,820,000 (one million
eight hundred and twenty thousand) Non-voting Ordinary Shares; and
(iii) 5,000,000 (five million) Special Preferred Shares.
5. Except as otherwise provided for herein, the shares of each class rank
pari passu with the other shares of that class.
5.1 Each Voting Ordinary Share entitles its holder to receive notice of,
and to participate in, all General Meetings, and to one (1) vote in
each such meeting for each share held by such Shareholder, and any
other right specified in these Articles or as provided by the
Companies Law.
5.2 Each Non-voting Ordinary Share shall convey to its holder each and
every right and privilege of the Voting Ordinary Shares with the
exception of: (i) the right to receive notices of General Meetings;
and the (ii) the right to participate and vote in such meetings. The
Non-voting Ordinary Shares shall be convertible by reclassification at
the option of the holder(s) thereof into an equal number of Voting
Ordinary Shares upon written notice to the Company by the holder(s)
thereof specifying the number of Non-voting Ordinary Shares to be
converted into Voting Ordinary Shares. Immediately upon the receipt of
the notice by the Company or by its transfer agent the Non-voting
Ordinary Shares included in such notice shall be deemed converted as
specified in the notice and the converting holder shall be the owner
and shall be treated for all purposes as the record holder of the
number of Voting Ordinary Shares into which such Non-voting Ordinary
Shares were converted. Promptly after delivery of such written
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notice the holder shall surrender the share certificate(s) evidencing
the Non-voting Ordinary Shares to be converted. The Company or its
transfer agent shall as soon as practicable thereafter issue and
deliver the new certificates evidencing the converted shares. Anything
herein to the contrary notwithstanding, and until determined otherwise
by Trident Capital (the "Entity") in its sole and absolute discretion,
by written notice to the Company, the Entity shall not hold, in the
aggregate more than 10% (the "Threshold Percentage") of any Voting
Ordinary Shares. In the event that the Entity shall hold any class of
voting shares above the Threshold Percentage then any Voting Ordinary
Shares held by the Entity shall automatically be converted or
reclassified into Non-voting Ordinary Shares, immediately prior to or
simultaneously with any transaction, act or event (including, purchase
of additional securities, repurchases or redemptions (if and when
permitted by the Companies Law) of securities or any other act
permitted by law whether performed by the Entity, the Company or any
third party) resulting in such excess; provided however, that Voting
Ordinary Shares held by the Entity shall first be converted or
reclassified into Non-voting Ordinary Shares to bring such holdings
down to the Threshold Percentage. The Threshold Percentage shall be
determined by and shall reflect the aggregate of the Voting Ordinary
Shares and the Voting Preferred Shares held by the Entity in aggregate
and not a percentage of a specific class of shares.
5.3 The Special Preferred Shares may be issued from time to time with
distinctive serial designations as may be approved by the Board from
time to time. In the resolution or resolutions providing for the
issuance of the Special Preferred Shares, the Board is expressly
authorized, without the need for any further shareholder action,
approval or consent, to fix the terms and preferences of the Special
Preferred Shares, including the dividend rate, the number of Special
Preferred Shares to be allotted and the number of Voting Ordinary
Shares into which the Special Preferred Shares are convertible by
reclassification.
AMENDMENT OF ARTICLES
6.1 These Articles may be amended by a resolution adopted by a Special
Majority voting at a General Meeting.
6.2 Subject to Article 6.1, whenever the capital of the Company is divided
into different classes of shares, the rights attached to any class
may, unless otherwise provided by the terms of issue of the shares of
that class, be varied or abrogated, whether or not the Company is
being wound up, only (i) with the consent in writing of the holders of
a Special Majority of the issued shares of such class, or (ii) with
the sanction of a Special Majority of the Shareholders present and
voting at a duly convened general meeting of such class. Unless
otherwise provided by the conditions of issuance, the enlargement of
an existing class of shares, or the issuance of additional shares
thereof, shall not be deemed to modify or abrogate the rights attached
to the previously issued shares of such class or of any other class.
6.3 All the provisions of these Articles relating to General Meetings or
the proceedings thereat, shall, mutatis mutandis, apply to every
separate General Meeting of the holders of a class of shares.
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6.4 Notwithstanding the provisions of this Article, a change of these
Articles that obligates a Shareholder to acquire additional shares or
to increase the extent of its liability shall not obligate the
Shareholder without such Shareholder's express consent.
SHARES
7. Subject to these Articles and the Applicable Laws, all unissued shares
of the Company shall be at the disposal of the Board and the Board may
allot, at a premium or at par or subject to the Companies Law, at a
discount, with or without conferring a right of renunciation, grant
options over, or otherwise dispose of such unissued shares to such
persons, at such times and on such terms as it deems proper. The
Company shall not issue bearer shares or exchange a share certificate
for a bearer share certificate.
8. If two or more persons are registered as joint holders of any share,
any one of such persons may give effectual receipts for any dividends
or other monies in respect of such share and they shall be jointly and
severally liable for any calls or any other liability in respect to
such share.
9. The Company is not required to recognize any holder of a share as a
holder other than the registered holder of such share as registered in
the Register from time to time. Any Shareholder who is holding shares
in trust shall be designated as such in the Register and the trustee
shall be treated as a Shareholder of the Company.
CERTIFICATES
10. Every person whose name is entered as a member in the Register shall
be entitled without payment to receive one certificate in respect of
each class of shares held by it, or, with the consent of the Board and
upon payment of a sum, if any, for every certificate after the first,
as the Board shall determine, to several certificates, each for one or
more of its shares. Shares of different classes may not be included in
the same certificate. Where a member has transferred a part of the
shares comprising its holding it shall be entitled to a certificate
for the remaining shares without charge.
Subject to the Companies Law and any regulation promulgated pursuant
thereto, every share certificate shall specify the shares to which it
relates. In the case of a share held jointly by several persons, the
Company shall not be obligated to issue more than one share
certificate for a share, and the delivery of share certificates to one
of several joint holders shall be deemed sufficient delivery to all.
If a share certificate is worn out, defaced, lost or destroyed, it may
be renewed on such terms, if any, as to evidence and indemnity with or
without security as the Board requires. In the case of loss or
destruction the person to whom the new certificate is issued shall pay
to the Company all expenses incidental to the investigation or
evidence of loss or destruction and the preparation of the requisite
form of indemnity. Every certificate shall be signed by an authorized
office holder or such other person as may be nominated by the Board
for this purpose from time to time.
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REPURCHASE OF SHARES
11. Subject to the provisions of Article 89 and the Applicable Laws, the
Company may, directly or indirectly, purchase its own shares.
TRANSFER OF SHARES
12. No transfer of shares shall be registered unless an instrument of
transfer (in any customary form or any other form satisfactory to the
Board) has been submitted to the Company (or its transfer agent),
together with the share certificate(s) and such other evidence of
title as the Board or the transfer agent may reasonably require. Until
the transferee has been registered in the Register in respect of the
shares so transferred, the Company may continue to regard the
transferor as the owner thereof. Every instrument of transfer of a
share(s) shall be in respect to only class of shares.
13. The Company or its transfer agent may refuse, without providing any
further explanation, to register any transfer of shares over which the
Company has an existing lien. Subject to these Articles and the
Applicable Laws, fully paid-up shares may be transferred freely and
such transfers shall not require additional approval by the Company.
All instruments of transfer shall remain in the custody of the Company
or its transfer agent from time to time, but the original of any
instrument of transfer that the Company refuses to register shall be
returned to the person from whom it was received, upon such person's
request (except in the event of fraud).
14. Subject to the Applicable Laws, the Register may be closed during such
times as the Board may deem fit, not exceeding, in the aggregate,
thirty (30) days in each year.
TRANSMISSION OF SHARES
15. In the case of the death of a shareholder, or a holder of other
security of the Company, the survivor or survivors, where the deceased
was a joint holder, and the executors and/or administrators and/or the
legal heirs of the deceased where the deceased was a sole or only
surviving holder, shall be the only persons recognized by the Company
as having any title to the shares or the other securities, but nothing
herein contained shall release the estate of a deceased joint holder
from any liability in respect of any share or any other security
jointly held by the deceased.
16. Any person who becomes entitled to a share or other security in
consequence of the death or bankruptcy or any shareholder may, upon
producing such evidence of title as the Board shall require, with the
consent of the Board, be registered itself as holder of the share or
other security or, subject to the provisions as to transfers herein
contained, transfer the same to another person or entity.
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17. A person entitled to a share or other security by transmission shall
be entitled to receive, and may be given a discharge for, any
dividends or interest or other monies payable in respect of the share
or other security, but shall not be entitled to receive notices of, or
to attend or vote at meetings of the Company or, save as aforesaid, to
exercise any of the rights or privileges of a shareholder or a holder
of other securities unless and until it shall become a shareholder in
respect of the share or a holder or other securities.
ALTERATIONS OF CAPITAL
18.1 Subject to the provisions of the Companies Law, these Articles and the
Applicable Laws, the Company may from time to time by a Special
Majority voting at a General Meeting:
(a) Consolidate and divide all or any of its issued or unissued
share capital into shares of larger nominal value than its
existing shares;
(b) Subdivide its shares (issued or unissued) or any portion
thereof, 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;
(c) Cancel any shares which, at the date of the adoption of such
resolution of the General Meeting, have not been allotted
provided further that the Company is not under an obligation
to allot such shares, and diminish the amount of its share
capital by the amount of the shares so cancelled; or
(d) Reduce its share capital as may be permitted by the
Companies Law.
18.2 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, if the circumstances so
dictate, may inter alia:
(a) Determine, as to the holder of shares so consolidated, which
issued shares shall be consolidated into each share of a
larger nominal value; or
(b) 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; or
(c) Subject to the Applicable Laws, redeem, in the case of
redeemable shares, and s such shares or fractional shares
sufficient to preclude or remove fractional share holdings
and the Board shall cause the Company to distribute the net
proceeds of any such redemption or purchase in due
proportion among the shareholders who would have been
entitled to the fractional shares.
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(d) Subject to Section 295 of the Companies Law, to make such
arrangements for the sale or transfer of fractional shares
to such person or persons at such times and at such price as
the Board may deem fit so as to most expeditiously preclude
or remove any fractional shareholdings the Board shall cause
the Company to distribute the net proceeds of any such sale
in due proportion among the shareholders who would have been
entitled to the fractional shares so sold or transferred.
REDEEMABLE SHARES
19. The Company may, subject to the Companies Law, issue redeemable shares
and redeem the same in accordance with the terms and upon the
conditions that the Company may so determine from time to time.
INCREASE OF SHARE CAPITAL
20. The Company may from time to time by a resolution adopted at a General
Meeting by a Special Majority, whether all the shares being authorized
shall have been issued or not or all the shares for the time being
shall have been fully called up or not, increase its share capital by
the creation of new shares, with such new share capital to be of such
amount and to be divided and classified into shares of such respective
amounts and, subject to any special rights for the time being attached
to any existing class of shares, to carry such preferential, deferred
or other special rights, if any, or to be subject to such conditions
and restrictions, if any, in regard to dividends, return of capital,
voting or otherwise as the General Meeting resolving such increase in
share capital so directs.
21. Any new shares created pursuant to Section 20 of these Articles shall
be subject to the same rights, duties and preferences as the shares of
the same class comprising the original share capital of the Company.
CALLS ON SHARES
22. CALLS.
22.1 Subject to any terms upon which any shares may have been issued the
Board may, from time to time, make calls upon the members in respect
of any monies unpaid on their shares, whether on account of the
nominal value of the shares or by way of premium, provided that,
subject as aforesaid, no call on any share shall be made without at
least 14 (fourteen) days prior notice specifying the time or times and
place of payment. A call may be revoked or the time fixed for its
payment be postponed by the Board.
22.2 A call shall be deemed to have been made at the time when the
resolution of the Board authorizing the call was passed, and may be
made payable by installments, and may be subject to such reasonable
interest as the Board may determine from time to time.
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22.3 Each member shall pay to the Company, at the time and place of payment
specified in the notice of the call, the amount called on its shares.
The joint holders of a share shall be jointly and severally liable to
pay all calls in respect thereof.
22.4 If a sum called in respect of a share is not paid before or on the day
appointed for payment, the person from whom the sum is due shall pay
interest thereon from the day fixed for payment to the time of actual
payment at such rate, not exceeding the debitory rate prevailing at
the largest Israeli commercial bank on the day appointed for the
payment referred to, as the Board may determine; but the Board shall
be at liberty to waive payment of such interest in whole or in part.
22.5 Any sum which by the terms of issue of a share becomes payable on
allotment or at any fixed date, whether on account of the nominal
value of the share or by way of premium, shall for the purposes of
these Articles be deemed to be a call duly made and payable on the
date on which, by the terms of issue, the same becomes payable. In
case of non-payment all the provisions of these Articles relating to
payment of interest and expenses, forfeiture and otherwise shall apply
as if such sum had become payable by virtue of a call duly made and
notified.
22.6 The Board may, if it deems fit in its sole discretion, receive from
any member willing to advance the same, all or any part of the monies
uncalled and unpaid upon any shares held by him, and may pay upon all
or any of the monies so advanced, until the same would but for such
advance become presently payable, interest at such rate as may be
agreed upon between the Board and such member.
LIEN ON SHARES
23. LIENS ON SHARES.
23.1 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 the shareholders' 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.
23.2 The Company may sell, in such manner as the Board thinks fit, any
shares on which the Company has a lien, but no sale shall be made
unless some sum in respect of which the lien exists is presently
payable, nor until the expiration of 14 (fourteen) days after a notice
in writing, stating and demanding payment of the sum presently payable
or any part thereof and stating the intention to sell in default,
shall have been given to the registered holder for the time being of
the share, or the person entitled to the share by reason of death or
bankruptcy.
23.3 To give effect to any such sale the Board may authorize any person to
execute a transfer of the shares sold to, or in accordance with the
directions of the purchaser. The transferee shall be
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entered in the Register as the holder of the shares comprised in any
such transfer, and he shall not be bound to see to the application of
the purchase money, nor shall his title to the shares be affected by
any irregularity or invalidity in the proceedings in reference to the
sale.
23.4 The net proceeds of sale, after payment of the costs thereof, shall be
applied in or towards payment or satisfaction of the debt or liability
in respect of which the lien exists, so far as the same is presently
payable, and any residue, subject to a like lien for sums not
presently payable as existed upon the shares prior to the sale, shall
be paid to the person entitled to the shares at the date of the sale.
FORFEITURE AND SURRENDER OF SHARES
24.1 Subject to any contrary provisions that may be agreed between a
shareholder and the Company if a member fails to pay the whole or any
part of any call or installment of a call on the day fixed for
payment, the Board may, at any time thereafter during such time as any
part of such call or installment remains unpaid, serve a notice on him
requiring payment of so much of the call or installment as is unpaid,
together with any accrued interest and any costs, charges and expenses
incurred by the Company by reason of such non-payment.
24.2 The notice shall fix a further day, not being less than 7 (seven) days
from the date of the notice, on or before which and the place where
the payment required by the notice is to be made, and shall state
that, in the event of non-payment at or before the time and at the
place specified, the shares on which the call was made will be liable
to be forfeited.
24.3 If the requirements of any such notice are not complied with, any
share in respect of which such notice has been given may, at any time
thereafter, before the payments required by the notice have been made,
be forfeited by a resolution of the Board to that effect. Every
forfeiture shall include all dividends declared in respect of the
forfeited shares and not actually paid before the forfeiture.
24.4 Subject to the Companies Law and to these Articles, a forfeited share
may be sold, re-allotted or otherwise disposed of upon such terms and
in such manner as the Board thinks fit; and at any time before sale,
re-allotment or disposal, the forfeiture may be annulled on such terms
as the Board thinks fit. The Board may authorize some person to
execute the transfer of a forfeited share.
24.5 A person whose shares have been forfeited shall cease to be a member
in respect of the forfeited shares, but shall, notwithstanding the
forfeiture, remain liable to pay to the Company all moneys which at
the date of forfeiture were then payable by him to the Company in
respect of the shares, with interest thereon as the Board shall deem
fit from the date of forfeiture until payment; but such person's
liability shall cease if and when the Company shall have received
payment in full of all moneys in respect of the shares.
24.6 The forfeiture of a share shall involve the extinction at the time of
forfeiture of all interest in and all claims and demands against the
Company in respect of the share, and all other rights and liabilities
incidental to the share as between the member whose share is forfeited
and the
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Company, except only such of those rights and liabilities as are
expressly saved by these Articles or by any other agreement between
the Company and such shareholder, or in the case of past members, as
are provided for or imposed by Israeli law.
24.7 The Board may accept the surrender of any share which it is in a
position to forfeit upon such terms and conditions as may be agreed
and, subject to any such terms and conditions, a surrendered share
shall be treated as if it had been forfeited.
24.8 An affidavit in writing made by a Director stating or declaring that a
share has been duly forfeited or surrendered on a date stated in the
affidavit, shall be conclusive evidence of such facts as against all
persons claiming to be entitled to the share, and the aforementioned
affidavit and the receipt of the Company of the consideration, if any,
given for the share, on the sale or disposition or re-allotment
thereof, shall constitute good title to the share. After the person to
whom the share is sold, re-allotted or disposed of shall have been
registered as the holder thereof, such shareholder shall not be
responsible for the application of the purchase money and its title to
the share shall not be affected by any irregularity or invalidity in
the proceedings in reference to the forfeiture, surrender, sale,
re-allotment or disposal of the share.
The provision of these Articles as to forfeiture shall apply in the
case of non-payment of any sum which, by the terms of issue of a
share, become payable at a fixed time, whether on account of the
amount of the share, or by way of premium as if the same had been
payable by virtue of a call duly made and notified.
GENERAL MEETINGS
25. Without derogating from any additional requirements relating to the
adoption of resolutions by a Special Majority as set forth in these
Articles, the following matters shall be adopted at a General Meeting:
25.1 Changes or amendments to the Articles;
25.2 Exercise of the powers of the Board in accordance with the provisions
of Section 52 (a) of the Companies Law;
25.3 Appointment or reappointment of the Company's Auditors, and the
termination or non-renewal thereof;
25.4 The election or confirmation of Directors (except as otherwise
provided forth these Articles), including but not limited to the
Independent Directors, in accordance with Article 50 hereof;
25.5 To the extent required by the provisions of the Companies Law, the
approval of actions and transactions with interested parties and the
approval of an action or a transaction of or with an Office Holder;
25.6 Changes in the share capital of the Company, as set forth in these
Articles;
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25.7 A merger of the Company, in accordance with Section 327 of the
Companies Law;
25.8 A liquidation of the Company;
25.9 Any other matter required to be addressed by a General Meeting in
accordance with these Articles or by the Applicable Laws;
25.10 The General Meeting shall not delegate to any other organ of the
Company any of its authorities detailed in this Article 25.
26. ANNUAL MEETING.
26.1 An Annual General Meeting shall be held at least once in every
calendar year at such time, not being more than fifteen months after
the date of the last preceding Annual General Meeting, and at such
time and place as may be determined by the Board. The Annual General
Meeting shall be referred to herein as an "Annual Meeting", and all
other General Meetings of the Shareholders shall be referred to herein
as "Extraordinary Meetings".
26.2 An Annual Meeting shall be convened to discuss the following issues:
26.2.1 The financial statements of the Company, as of the end of
the fiscal year preceding the year of the Annual Meeting,
and the report of the Board with respect thereto;
26.2.2 The report of the Board with respect to the fees paid to
auditors and the fees payable to the Company's auditors in
the future;
26.2.3 The election or confirmation of the appointment of Directors
in accordance with these Articles;
26.2.4 The appointment of the auditors or the renewal of the
appointment of the auditors;
26.2.5 Any other issue that is detailed in the agenda of the Annual
Meeting.
The Company shall provide the shareholders with an agenda for the
Annual Meeting in accordance with the provisions set forth in these
Articles and as provided for in the Companies Law. To the extent
solicitation of proxy is made on behalf of the management of the
Company or any Shareholder and related to the Annual Meeting such
proxy solicitation shall comply with the Applicable Laws, and
specifically the proxy rules promulgated by U.S. Securities and
Exchange Commission as applicable to the Company. Without derogating
from the above, the Annual Meeting may transact any other business
that pursuant to these Articles or the Companies Law may be transacted
at a General Meeting.
27. The Board may, whenever it deems necessary, and shall upon such
requisition in writing as is provided by Section 63(b) of the
Companies Law, convene a General Meeting. Any such request must state
the purposes for which the meeting is to be called, be signed by the
requesting shareholders or Directors, and must be deposited at the
Registered Office. Such
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request may consist of several documents in like form, each signed by
one or more requesting shareholder or Director.
The Board, when required to convene a General Meeting in accordance
with the aforesaid, 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 General
Meeting shall not be more than thirty five (35) days from the
publication date or the notice date of the announcement of the General
Meeting, or such other period or form of announcement or notice as may
be permitted by the Applicable Laws for notices of General Meetings.
28. Any Shareholder or Shareholders of the Company holding continuously,
at least, $2,000 in market value or one percent (1%) of the voting
rights of the Company for at least one year may, request that the
Board include a subject in the agenda of a General Meeting to be held
in the future or include a proposal in the Company's proxy statement
and proxy form in connection with any General Meeting.
Any such request must be in writing, give particulars of the subject
which is requested to be included in such agenda or proposal, be
signed by the Shareholder or Shareholders making such request and must
be deposited at the Registered Office and addressed to the Board. In
addition, subject to the provisions of Article 51 and the Applicable
Laws, the Board shall be required to include such subject in the
agenda of the General Meeting and/or the proxy materials only if the
request has been delivered to the Board of the Company, and provided
that such subject is a suitable subject for discussion at a General
Meeting not later than (i) with respect to an Annual Meeting, not less
than one hundred twenty (120) days and not more than one hundred and
fifty (150) days prior to the anniversary date of the Company's proxy
statement released to Shareholders in connection with the previous
year's Annual Meeting, and if the Company did not hold an annual
meeting the previous year, or if the date of this year's annual
meeting has been changed by more than 30 days from the date of the
previous year's meeting, then a reasonable time before the Company
begins to print and mail its proxy materials and (ii) with respect to
an Extraordinary Meeting, prior to a reasonable time before the
Company begins to print and mail its proxy materials, generally not
less than ninety (90) days and not more than one hundred and twenty
(120) days prior to the proposed date of such meeting, provided,
however, that in the event that less than ninety (90) days notice or
prior public disclosure of the date of any such meeting is given, such
request must have been delivered to the Board of the Company not later
than the close of business on the 21st day prior to the day on which
notice or prior public disclosure of the meeting was given, provided
that the preceding provision shall not derogate from the Company's
obligations pursuant to Section 69(b) of the Companies Law and the
Applicable Laws. Each such request shall also set forth: (a) the name
and address of the Shareholder making the request; (b) a
representation that the Shareholder is a holder of record of shares of
the Company entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting; (c) a description of all
arrangements or understandings between the Shareholder and any other
person or persons (naming such person or persons) in connection with
the subject that is requested to be included in the agenda; and (d) a
declaration that all the information that is required by the
Applicable Laws to be provided to the Company in connection with such
subject, if any, has been provided. The Board will include in the
agenda for a General Meeting a subject as requested if the Board deems
that such subject suitable for
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discussion at a General Meeting, and will include the proposal in, or
exclude the proposal from, the proxy materials, in accordance with the
requirements of these Articles and the Applicable Laws.
Notwithstanding the foregoing, in order to include information with
respect to a Shareholder proposal in the proxy statements and form of
proxy for a General Meeting, Shareholders must provide notice as
required by the proxy rules promulgated by the U.S. Securities and
Exchange Commission.
NOTICE OF GENERAL MEETING
29.1 Subject to the Applicable Laws, notices of General Meetings shall be
provided in the manner provided for in these Articles, to the
Shareholders at least twenty-one (21) days prior to the date fixed for
such General Meeting, and each such notice shall specify the place,
the day and hour of the meeting, the agenda of the meeting, the
proposed resolution(s) or a concise description thereof, and the
arrangements for voting by means of a proxy or by other means
acceptable to the Company. Subject to the provisions of Section 74(b)
of the Companies Law such notice may also specify the time and place
for any adjournment of such General Meeting.
29.2 Notwithstanding anything to the contrary herein, notice by the Company
of a General Meeting may be provided, in addition to any means
provided in these Articles, by any other means permitted by, and in
accordance with the requirements of the Applicable Laws.
29.3 Any accidental omission to give such notice to, or the non-receipt of
such notice by, any Shareholder shall not invalidate any resolution
passed or proceeding held at any such meeting and, with the consent of
all the Shareholders for the time being entitled to receive notice of
meetings, a meeting may be convened upon a shorter notice or without
notice, and generally in such manner as such Shareholders may approve.
Such consent may be given prior to the meeting, at the meeting or
retrospectively after the meeting. Any Shareholder who fails to
provide the Company with an address for the delivery of notices shall
be deemed to have waived the right to receive notices.
29.4 Subject to the Applicable Laws, only Shareholders of record as
reflected in the Register at the close of business on the date fixed
by the Board as the record date for determining the Shareholders, will
be entitled to vote, receive notice of, and to vote, in person or by
proxy, at a General Meeting and any postponement or adjournment
thereof. The Board will fix the record date of not less than four (4)
nor more than forty (40) days before the date of the General Meeting.
29.5 Subject to the Companies Law, all General Meetings shall be held at
such time and place as the Board may determine. The Board may, in is
absolute discretion, resolve to enable persons entitled to attend a
General Meeting to do so by simultaneous attendance and participation
at the principal meeting place and a video or audio conference meeting
place or places anywhere in the world and the Shareholders present in
person, by proxy or by written ballot at places shall be counted in
the quorum for and entitled to vote at the General Meeting in
question, and that meeting shall be duly constituted and its
proceedings valid, provided that the chairman of the
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General Meeting is satisfied that adequate facilities are available
throughout the General Meting to ensure that Shareholders attending
the meeting place are able to:
29.5.1 Participate in the business for which the meeting has been
convened;
29.5.2 Hear all persons who speak (whether by the use of
microphones, loudspeakers, audio-visual communications
equipment or otherwise) in the principal meeting place and
any teleconference meeting place; and
29.5.3 Be heard by all other persons so present in the same way.
AUDITORS
30. AUDITORS.
30.1 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 Meetings in which the Auditor 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.
30.2 The Board shall fix the compensation of the auditor of the Company for
the Auditors' 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.
PROCEEDINGS AT GENERAL MEETINGS
31. No business shall be transacted at any General Meeting unless a quorum
is present when the meeting proceeds to business. Subject to the
requirements of the Applicable Laws, rules or regulations of any
exchange in which the Company's securities are or shall be registered,
quoted or listed, the quorum at any General Meeting shall be two
Shareholders present in person or by proxy, holding or representing at
least one third (approximately thirty-three point three percent
(33.3%)) of the total voting rights in the Company. A company being a
Shareholder shall be deemed to be personally present for the purposes
of this Article if represented by its representative duly authorized,
in person or by proxy, in accordance with Articles 37 and 40 hereof.
32. Subject to any applicable provisions of the Companies Law, if, within
an hour from the time appointed for the holding of a General Meeting,
a quorum is not present, the meeting shall stand adjourned to the same
day in the next week at the same hour and place (unless such day shall
fall on a public holiday either in Israel or in the United States of
America in which case the meeting will be adjourned to the first
business day in the United States and Israel other than Friday and
Sunday that follows such public holiday(s)), or at any other time and
hour as the
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Board shall designate and state in a notice to the Shareholders
entitled to vote at the original meeting, to be delivered to such
Shareholders in accordance with the provisions of Article 29 hereof.
If a quorum is not present at the second meeting within half an hour
from the time designated for such meeting any two Shareholders present
personally or by proxy or by any other valid instrument shall
constitute a quorum and shall be entitled to deliberate and resolve in
respect to the matters for which the original meeting was convened.
33. The Chairman 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 a Shareholder or any other person present to be chairman of
such meeting. The position of chairman shall not, by itself, entitle
the chairman to vote at any General Meeting nor shall it entitle such
chairman to a second or casting vote (without derogating, however,
from the rights of such chairman to vote as a Shareholder or by proxy
for a Shareholder if, in fact, the chairman is also a Shareholder or
proxy holder).
34. The chairman may, with the consent of an Ordinary Majority of any
General Meeting at which a quorum is present, and shall, if so
directed by an Ordinary Majority of the General Meeting, adjourn any
meeting from time to time and from place to place as the General
Meeting shall determine. Whenever a General Meeting is adjourned
pursuant to the provisions of this Article for more than twenty-one
days, notice of such adjourned General Meeting shall be given in the
same manner as in the case of an original General Meeting. Without
derogating from the foregoing and subject to the Applicable Laws no
Shareholder shall be entitled to any additional notice of an
adjournment, or of the business to be transacted at an adjourned
General Meeting. No business shall be transacted at any adjourned
General Meeting other than the business that might have been
transacted at the original General Meeting and with respect of which
no resolution was adopted.
VOTES OF SHAREHOLDERS
35. Except as otherwise provided for herein or by the Companies Law
resolutions shall be deemed to be passed at a General Meeting if
adopted by Ordinary Majority.
36. VOTING.
36.1. Every matter submitted to a General Meeting shall be decided by a show
of hands, and by proxy, however in the event that a ballot is demanded
by the chairman (being a person entitled to vote), or by at least two
Shareholders present, in person or by proxy, holding at least 5% of
the issued share capital of the Company, the pending resolution shall
be decided by ballot taking into consideration any votes pre-cast on
such resolution by proxy. A ballot may be demanded before the proposed
resolution is voted upon or if the chairman was otherwise unable to
determine whether there was a sufficient majority to pass the
resolution. The demand for a ballot shall not prevent the continuance
of the meeting for the transaction of business other than the question
on which the ballot has been demanded.
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36.2 Unless a ballot is so demanded, a declaration by the chairman of the
meeting that a resolution has been adopted unanimously, or adopted by
a particular majority, or rejected, and the 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.
37. A company or other corporate entity being a Shareholder may, by
resolution of its directors or any other managing body of such
Shareholder, 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 powers that 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 the chairman.
38. Subject to any rights or restrictions for the time being attached to
any class or classes of shares, every Shareholder shall have one vote
for each share of which it is the holder, whether on a show of hands,
proxy or by ballot.
39. If two or more persons are jointly entitled to a share, then in voting
upon any question, the vote of the senior person who tenders a vote,
whether in person or by proxy, shall be accepted to the exclusion of
the votes of the other registered holders of the share. For the
purpose of this Article, seniority shall be determined by the order in
which the names stand in the Register.
40. Subject to the Applicable Laws and to the provisions of these Articles
votes may be given either personally, by ballot or by proxy. The
holder of a proxy need not be a Shareholder of the Company.
40.1 The instrument granting a proxy or ballot shall be in writing in the
usual common form, or such form as may be approved by the Board, and
shall be signed by the grantor or by the grantors attorney duly
authorized in writing or, if the grantor is a corporate entity, the
corporate entity shall vote through a representative, appointed by an
instrument duly signed by an authorized party on behalf of such
corporate entity.
40.2 Unless otherwise clearly indicated on a proxy or ballot, the
instrument granting a proxy or ballot shall be deemed to include
authorization to demand a ballot or to vote by ballot on behalf of the
grantor.
41. Unless otherwise provided by the Companies Law or by any other rule or
regulation applicable to the Company, any matter brought to the
General Meeting may be voted upon by way of a proxy, or if so
determined by the Board advance written ballot.
42. A vote given in accordance with the terms of an instrument of proxy or
ballot shall be valid notwithstanding the death or insanity of the
party granting the proxy, or revocation of the proxy, or ballot or
transfer of the share in respect of which the vote is given, unless
the notification in writing of the death, revocation or transfer shall
have been received at the Registered Office before the commencement of
the meeting or adjourned meetings for which the proxy is to be used.
Notwithstanding the aforesaid should the granting Shareholder be
present in person, at said General Meeting such Shareholder may revoke
the proxy or ballot by means of writing, or oral notification to the
chairman to such meeting prior to the commencement of such meeting.
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43. An instrument granting a proxy or ballot shall be deposited at the
Registered Office or at such other place or places, whether in Israel
or elsewhere, as the Board may from time to time prescribe at least
forty-eight (48) hours prior to the time designated for the
commencement of the meeting or the adjourned meeting at which the
person named in such instrument is entitled to vote; otherwise, the
person so named shall not be entitled to vote in respect thereof.
44. Intentionally Deleted.
45. A person may grant several proxies or ballots, so long as each proxy
specifically refers to different shares held by the granting
Shareholder. The holder of each such proxy or ballot may vote each
proxy severally. A person may hold proxies for several Shareholders.
46. No person shall be entitled to vote at any General Meeting (or be
counted as a part of the quorum thereof) unless all calls then payable
by the Shareholder in respect of the Shareholder's shares in the
Company shall have been paid.
DIRECTORS POWERS AND RESPONSIBILITIES OF THE BOARD
47.1 Without derogating from the authority of the General Meeting pursuant
to these Articles and the Companies Law, the Board shall formulate the
Company's policies and shall supervise the General Manager's office
and the exercise of his or her acts, and as part thereof the Board:
47.1.1 shall determine the Company's plans of activity, the
principles for financing such plans and the order of
priority among them;
47.1.2 shall examine the Company's financial situation and set the
framework of credit which the Company may take;
47.1.3 shall determine the organizational structure and the
compensation policy of employees;
47.1.4 may decide to issue a series of debentures;
47.1.5 is responsible for the preparation and approval of the
financial reports according to Section 171 of the Companies
Law;
47.1.6 shall report to the Annual Meeting about the state of the
Company's affairs and on its business results, as required
by Section 173 of the Companies Law;
47.1.7 shall appoint and dismiss the General Manager, as provided
by Section 250 of the Companies Law;
47.1.8 shall decide on the acts and transactions that require its
approval in accordance with these Articles or pursuant to
the provisions of Sections 255 and 268 to 275 of the
Companies Law;
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47.1.9 may issue shares and securities convertible or exchangeable
into or for shares up to the limit of the Company's
registered share capital, in accordance with Section 288 of
the Companies Law and subject to shareholder approval if
required by the Applicable Laws;
47.1.10 may decide to declare a distribution as may be permitted by
and in accordance with the Companies Law;
47.1.11 shall express its opinion on a special purchase offer, in
accordance with Section 329 of the Companies Law; and
47.1.12 shall decide on any matters as required by the Applicable
Laws.
47.2 The powers of the Board under this Article may not be delegated to the
General Manager.
48. Without derogating from the generality of Article 47 above, the
Board's authority shall include the following:
48.1 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 use by Company as may be determined by the
Board, and may secure or provide for the repayment of such
sum or sums in such manner, at such times and upon such
terms and subject to such conditions as it may determine to
be appropriate including without limitation the issuance of
perpetual bonds or debentures or redeemable bonds or
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.
48.2. 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(s) 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 redesignate 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, subject to the Companies Law.
48.3 The Board may, from time to time by power of attorney
appoint any company, firm or person, or any fluctuating body
of persons, whether nominated directly or indirectly, by the
Board, to be the attorney or attorneys of the Company for
such purpose(s) and with such powers, authorities and
discretion, not exceeding those vested in or exercisable by
the Board under these Articles or for such period to such
conditions as it may determine from time to time. Any such
power of attorney may include such provisions for the
protection or convenience of such persons dealing with any
such attorney as the Board may think fit and may also
authorize any such attorney to sub-delegate any or all of
the powers, authorities and discretions granted to such
attorney.
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DIRECTORS
49. The Board shall consist of up to nine directors. Subject to the
Companies Law no person shall be disqualified to serve as a director
due to the fact that such director is not a shareholder of the
Company.
50.
50.1. Except for the Independent Directors and the Ex-Officio
Director, all other Directors shall be classified, with
respect to the time for which they severally hold office,
into three classes, as nearly equal in number as possible,
the first class to hold office initially for a term expiring
at the first Annual Meeting to take after the closing of the
initial public offering the Company's Voting Ordinary
Shares, the second class to hold office initially for a term
expiring at the 2001 Annual Meeting, and the third class to
hold office initially for a term expiring at the 2002 Annual
Meeting, with the members of each class to hold office until
their successors have been duly elected and qualified.
Directors shall be initially assigned to each class in
accordance with a resolution or resolutions adopted by the
Board. At each Annual Meeting following the 2001 Annual
Meeting, the class of directors whose term expires at that
meeting shall be elected to hold office for a term expiring
at the Annual Meeting of the Company held in the third year
following the year of their election and until their
successors have been duly elected and qualified.
50.2 Without derogating the provisions of the Companies Law, any
Director may be removed from office at any time for "Cause"
by a resolution adopted by: (i) Ordinary Majority at a
General Meeting or (ii) a majority of the Board. For
purposes of this sub-Article 50.2: "Cause" shall be defined
as: (i) the willful and continuous failure of a Director
substantially to perform such director's duties to the
Company (other than any such failure resulting from
incapacity due to physical or mental illness); (ii) the
willful engagement by a Director in gross misconduct
materially and demonstrably injurious to the Company; or
(iii) intentional breach of a Director's fiduciary duty or
obligation to the Company.
50.3 The Shareholders shall appoint two Independent Directors as
and to the extent required by, and they shall hold office
according to, the Companies Law, as long as the Company is
required by the Companies Law to appoint Independent
Directors. In addition the Company shall appoint such number
of additional independent directors as and to the extent
required by, and they shall hold office according to, the
Applicable Laws, as long as the Company is required by the
Applicable Laws to appoint independent directors and to the
extant that the Independent Directors appointed in
accordance with the Companies Law do not meet the
qualifications for independent directors as required by the
Applicable Laws.
50.4 In addition the Chief Executive Officer of the Company (the
"CEO") shall serve as a Director ex-officio for so long as
he or she is CEO of the Company with such
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appointment to be ratified annually by the Shareholders at
the Annual Meeting. In the event that the CEO is replaced or
resigns between Annual Meetings, the newly approved CEO
shall become the ex-officio Director instead of the
resigning or dismissed CEO with such appointment to be
ratified by the Shareholders at the next Annual Meeting.
50.5 Sections 235 and 236 of the Companies Law permitting a
corporate body or corporate entity are expressly excluded.
50.6 ALTERNATE DIRECTORS
50.6.1 Subject to the requirements of the Companies Law a
Director may appoint a qualifying Alternative
Director. An Alternate Director shall have all the
authority of the Director who appointed him or
her, provided, however, that he or she may not in
turn appoint an alternate or a representative for
himself of herself, and provided further that an
Alternate Director shall have no standing at any
meeting of the Board or any committee thereof
while the Director who appointed him or her is
present.
50.6.2 The office of an Alternate Director shall be
vacated under the circumstances, mutatis mutandis,
set forth in Article 53, and such office shall
ipso facto be vacated if the Director who
appointed such Alternate Director ceases to be a
Director.
51. NOMINATION OF DIRECTORS.
51.1 No person shall be nominated for the office of a Director at
an Annual Meeting, except: Directors whose term of office
has expired or is expiring at the Annual Meeting, or such
persons nominated for the office of Director by the Board,
or by the Shareholders as provided for in herein.
51.2 Any Shareholder entitled to receive notice of and vote at a
General Meeting desiring to propose a nominee for the office
of a Director to be elected at an Annual Meeting must
deliver notice to the secretary of the Company, at the
Registered Office, not later than ninety (90) days prior to
the date of the Annual Meeting at which meeting such
election is to occur. The notice shall set forth: (i) the
name and address of the nominating Shareholder; in
accordance with the Register; (ii) the identity and
background of the nominee; (iii) the class and number of
shares of the Company beneficially owned by such
Shareholder; (iv) a representation that such Shareholder is
a Shareholder of record and intends to appear by person or
by proxy at such General Meeting and an undertaking by the
nominee specified in the notice that he or she shall attend
the General Meeting; (v) a brief description of the nominees
qualifications to serve as a director; (vi) any material
interest that the Shareholder has in the election of such
nominee; (vii) the written consent of the nominee being
proposed for election as a director of the Company; (viii)
sufficient evidence as may be required by the Board or by
law that such nominee is properly qualified to act as a
Director of the Company in accordance with the Companies Law
and applicable rules and regulations of any exchange on
which the Company's are traded, listed or quoted, regulatory
authority or other similar body.
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52. Subject to the provisions of the Companies Law, the Directors in their
capacity as such, shall be entitled to receive remuneration and
reimbursement of expenses incurred by them in the course of carrying
out their duties as Directors.
53. Without derogating from the provisions of the Companies Law, the
office of a Director shall be vacated, ipso facto, upon the occurrence
of each of the following events:
53.1 upon the written resignation of the Director delivered to
the Registered Office;
53.2 if the Director is declared bankrupt or enters into an
arrangement with his or his creditors;
53.3 If the Director is declared by an appropriate court to be
incapacitated, incompetent or unfit to serve as a Director;
53.4. Upon the death of a Director;
53.5 if the Director is relieved of his or her office as provided
in Article 50.2 hereof;
53.6 if the Director is prevented or prohibited by the Applicable
Laws from serving as a Director;
53.7 the Board terminates the Director's office according to
Section 231 of the Companies Law or if Director is removed
for Cause in accordance 50.2;
53.8 if court order is given according to Section 233 of the
Companies Law.
54. Transactions entered into by the Company in which an Office Holder has
a personal interest, directly or indirectly, will be valid in respect
of the Company and the Office Holder only if approved in accordance
with the requirements of the Companies Law.
55. Subject to the provisions of the Companies Law, a Director who has a
personal interest in a matter which is brought for general discussion
before the Board may participate in said general discussion, provided
that the Director shall neither vote or take part or be present in
discussions concerning the approval of the activities or the
arrangements in question.
56. In the event of one or more vacancies on the Board, the continuing
Directors may continue to act as long as the Board consists of at
least a majority of the total number of Directors elected. However, in
the event that the remaining Directors are not a majority of the total
number of Directors elected, the remaining Director or Directors may
call for the convening of a General Meeting for the purpose of the
election of Directors.
57. Subject to the limitation on the number of Directors as specified in
Article 49, the Board may, at any time and from time to time, appoint
any other person as a Director, whether to fill a vacancy or to add to
their number. Any Director so appointed shall hold office until the
next Annual Meeting at which the term of the class or term to which
the Director has been elected expires, and may be re-elected.
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58. In case of any increase in the number of Directors, the additional
Director or Directors, and in case of any vacancy in the Board due to
a death, resignation, removal, disqualification or any other cause,
the successors appointed according to Article 57 to fill the vacancies
shall be elected by a majority of the Directors then in office.
CONVENING THE BOARD
59. CONVENING BOARD MEETINGS.
59.1 The Chairman may convene a meeting of the Board at any time,
and shall convene a meeting of the Board at any time or in
such circumstances as may be required by the Companies Law.
59.2 The Board shall hold a meeting on a specified subject upon
the demand of two Directors, or if the Board consists of no
more than five Directors - one Director;
59.3 If a meeting of the Board is not convened within 14 days
after the date of a demand pursuant to Sub-article 59.2 or
after the date of a notice or report of the General Manager
according to Section 122(d) of the Companies Law, or after
notice of the Auditor under Section 169 of the Companies
Law, then each of the aforementioned persons may convene a
meeting of the Board, to discuss the subject specified in
the demand, notice or report, as the case may be.
MEETINGS OF THE BOARD AND THEIR CONDUCT
60. The agenda of a meeting of the Board shall be determined and fixed by
the Chairman, and it shall include:
60.1 Subjects determined by the Chairman;
60.2 Matters upon which the meeting is required to be convened in
accordance with the Companies Law;
60.3 Any matter requested by a Director or by the General
Manager to be included in the agenda within a reasonable
time (taking into account the nature of the matter) prior to
the date of the meeting;
61. NOTICES OF BOARD MEETINGS.
61.1 Notice of a meeting of the Board shall be delivered to all
its members at a reasonable time before the meeting, but not
later than five (5) Business Days prior to the time set for
any such meeting, unless all members of the Board or their
Alternate Directors (as defined herein) or their
representatives, agree on a shorter time period. Such notice
shall
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be delivered personally, by mail, or transmitted via
facsimile, electronic mail or through another means of
communication, to the address, facsimile number, the
electronic mail address or to an address where messages can
be delivered through other means of communication, as the
case may be, as the Director informed the Company in advance
from time to time.
61.2 A notice with respect to a meeting of the Board shall
include the venue, date and time, the issues on its agenda
and any other material information that the Chairman
requests to be included in the notice with respect such
meeting.
62.1 Any director may participate in a meeting of the Board by means of
telephone or similar communication equipment whereby all of the
directors participating in such meeting can hear each other and the
directors participating in such manner shall deemed to be present in
person at such meeting and shall be entitled to vote and be counted in
a quorum accordingly. Such meeting shall be deemed to take place at
the location specified in the notice of the meeting.
62.2 A resolution in writing signed by all Directors then in office and
lawfully entitled to vote thereon (as conclusively determined by the
Chairman) or to which all such Directors have given their consent (by
letter, telegram, telex, facsimile, electronic mail or otherwise), or
their oral consent by telephone (provided that a written summary
thereof has been approved and signed by the Chairman), shall be deemed
to have been unanimously adopted by a meeting of the Board duly
convened and held.
GENERAL MANAGER
63. The Board will appoint one or more persons as General Manager,
carrying the title or titles of President, Chief Executive Officer
(CEO) or Chief Operating Officer (COO). The Board may from time to
time remove or discharge such person(s) from office (subject to the
provisions of any agreement between any such person(s) and the
Company) and appoint another or others in his, her or their place or
places.
64. The Board may from time to time appoint one or more Vice Presidents
for certain functions, to carry out duties delegated to such person(s)
by the President, CEO or COO.
65. To the extent permitted by the Companies Law, the Board may from time
to time confer upon and delegate to a President, CEO, COO or other
officer, such authorities and duties of the Board as they may deem
fit, and they may delegate such authorities and duties for such period
and for such purposes and subject to such conditions and restrictions
which they consider in the best interests of the Company, and they may
delegate such authorities and duties without waiving the authorities
of the Board with respect thereto and it may from time to time revoke,
cancel and alter such authorities and duties in whole or in part.
66. Subject to any additional requirements of Companies Law the
remuneration and compensation of a President, CEO, COO or other Office
Holder, whether in the form of salary, share options or otherwise,
shall be approved by the Board, subject to any further approvals as
may be required by the Companies Law.
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DIRECTOR'S ACTS AND AUTHORITIES
67. Without derogating from the provisions of Article 47 above, the
supervision of 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 67 shall be subject to the provisions of the Companies
Law, 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.
68. Subject to the Companies Law, the Board may postpone meetings and
otherwise regulate itself as it shall deem fit. The quorum for the
dispatch of business by the Board shall be determined by the Directors
and, if not so determined, shall be the majority of the Directors then
holding office.
69. 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 persons(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.
70. CHAIRMAN
70.1 APPOINTMENT
70.1.1 The Board shall choose one of its members to serve as the
Chairman. Unless otherwise provided in the appointing
resolution, the Chairman shall be appointed every calendar
year at the first meeting of the Board held after the
General Meeting in which Directors are elected.
70.1.2 In the event that the Chairman ceases to serve as a
Director, the Board, in its first meeting held thereafter,
shall appoint one of its members to serve as a new Chairman
who will serve in such position for the term set in the
appointment resolution, and if no period is set, until the
appointment of a new Chairman, as provided herein.
70.1.3 In the event that the Chairman is absent from a meeting of
the Board within fifteen (15) minutes of the time fixed for
the meeting, or if the Chairman is unwilling to preside at
the meeting, the Board shall appoint one of the Directors
present to preside at the meeting.
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71. ROLES OF THE CHAIRMAN.
71.1 The Chairman shall preside over meetings of the Board and
shall sign the minutes of the meetings.
71.2 In the event of deadlock vote, the Chairman shall not have
an additional or casting vote.
71.3 The Chairman is entitled, at all times, at his or her
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.
71.4 The Chairman shall not serve as the General Manager of the
Company, unless the General Manager is appointed as Chairman
in accordance with the provisions and subject to the
limitations as set forth in the Companies Law.
71.5 The Chairman shall not serve as a member of the Audit
Committee.
72. Any meeting of the Board at which a quorum is present shall have the
authority to exercise all or part of the authorities, powers of
attorney and discretion invested at such time in the Directors or
regularly exercised by them.
73. Subject to the Companies Law, the Board may delegate its authorities
in whole or in part to committees as it shall deem fit, and it may
from time to time revoke such delegation. Any committee so created
must, in exercising the authorities granted to it, adhere to all the
instructions of the Board given from time to time and/or to the
requirements of the Companies Law.
74. Reserved.
75. MINUTES.
75.1 The Board shall cause proper minutes to be kept of the following:
(a) the names of all the Directors present or participating at
any meeting of the Board and at any meeting of a committee
of the Board;
(b) all proceedings and resolutions of General Meetings of the
Company, Board meetings and committees of the Board
meetings.
Any Minutes as aforesaid, if purporting to be signed by the Chairman
of such meeting or by the Chairman of the next succeeding meeting,
shall be accepted as prima facie evidence of the matters therein
recorded.
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INTERNAL AUDITOR
76. INTERNAL AUDITOR.
76.1 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, the General Manager and the chairman of the Audit
Committee, all to the extent required by Law.
76.2 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.
SHAREHOLDERS REGISTERS
77.1 Subject to, and in accordance with, the provisions of the Companies
Law, the Company shall cause a Register to be kept at any place in
Israel and may cause a copy of the Register to be kept outside Israel
as the Board may deem fit. Subject to all applicable legal
requirements the Board may from time to time adopt such rules and
procedures as it may deem fit in connection with the keeping of such
Registers. In addition to the Register, the Company shall also keep a
Register of Substantial Shareholders to the extent as may be required
by the Companies Law.
77.2 Subject to the Applicable Laws, the Company shall be entitled to
destroy: (i) all instruments or transfer of shares and all other
documents on the faith of which entries are made in the Register at
any time after the expiration of seven (7) years from the date of
registration of the same; (ii) all dividends mandates and
notifications of change of name or address at any time after the
expiration of two years from the date of recording; (iii) all share
certificates which have been cancelled at any time after the
expiration of one (1) year from the date of cancellation thereof. If
the Company destroys the document in good faith and without notice of
any claim (regardless of the parties) to which the document might be
relevant it shall be conclusively be presumed in favor of the Company
that every instrument, document or certificate so destroyed was a
valid and effective instrument, document or certificate duly and
properly registered in accordance with the recorded details of the
books or records of the Company. Nothing in this Article shall
construed as imposing upon the Company any liability in respect to the
destruction of any instrument, document or certificate at an earlier
date than that provided above or if the requirements of good faith
and/or notice are not met.
SECRETARY
78. The Board may from time to time appoint a secretary to the Company as
it deems fit, and may appoint a temporary assistant secretary who
shall act as an assistant secretary for the term of the appointment.
The compensation of the secretary shall be as may be determined by the
Board from time to time.
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RIGHTS OF SIGNATURE
79. SIGNATURE RIGHTS, SEAL.
(a) Authorization to sign on behalf of the Company and thereby
bind it shall be made and granted from time to time by the
Board. The Company shall be bound by the signature of the
aforesaid appointees if appearing together with its stamp or
printed name.
(b) The Company may maintain one or more official stamps or
seals the use of which shall be authorized by the Board. The
official stamps or seals of the Company shall only be used
by such persons duly authorized by the Board to utilize such
stamps or seals from time to time.
DIVIDENDS
80. Subject to any preferential, deferred, qualified or other rights,
privileges or conditions attached to any Special Preferred Shares with
regard to dividends, the profits of the Company available for dividend
and resolved to be distributed shall be applied in payment of
dividends upon the shares of the Company in proportion to the amount
paid up or credited as paid up per the nominal value thereon
respectively. Unless not otherwise specified in the conditions of
issuance of the shares, all dividends with respect to shares which
were not fully paid up within a certain period, for which dividends
were paid, shall be paid proportionally to the amounts paid or
credited as paid on the nominal value of the shares during any portion
of the abovementioned period. The Board may deduct from any dividend
or any distribution payable to any shareholder all amounts due at the
time of such distribution or dividend due from such shareholder to the
Company on the account of calls or otherwise in relation to the shares
of the Company.
81. The Board may declare a dividend or other form of permissible
distribution to be paid to the shareholders according to their rights
and interests in the profits, and may subject to the provisions of the
Companies Law, fix the record date for eligibility and the time for
payment.
82. The Directors may from time to time pay to the shareholders on account
of the next forthcoming dividend such interim dividends as, in their
judgment, the position of the Company justifies.
83. A transfer of shares shall not pass the right to any dividend declared
thereon after such transfer and before the registration of the
transfer.
84. Notice of the declaration of any dividend, whether interim or
otherwise, shall be given to the holders of registered shares in the
manner hereinafter provided.
85. Unless otherwise directed by the Board or required by the Applicable
Laws, any dividend may be paid by check, bank transfer or warrant,
sent through the post to the registered address of the shareholder or
person entitled or, in the case of joint registered holders, to that
one of them first named in the Register in respect of the joint
holding. Every such check shall be made payable
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to the order of the person to whom it is sent. The receipt by the
person whose name, at the date of the declaration of the dividend,
appears in the Register as the owner of any share or, in the case of
joint holders, of any one of such joint holders, shall be a good
discharge to the Company of all payments made in respect of such
share. All dividends unclaimed for one year after having been declared
may be invested or otherwise used by the Directors for the benefit of
the Company until claimed. No unpaid dividend or interest shall bear
interest as against the Company. Any dividend or distributions
remaining unclaimed for a period of more than seven years after being
declared shall be forfeited and revert to the Company.
86. The Board may determine to the extend permitted by the Companies Law
that, a dividend may be paid, wholly or partly, by the distribution of
specific assets of the Company or by distribution of paid-up shares,
debentures or debenture stock or any other securities of the Company
or of any other companies or in any one or more of such ways in the
manner and to the extent permitted by the Companies Law.
PROHIBITED DISTRIBUTION
87.
(a) In the event that the Company makes a prohibited
distribution as defined in the Companies Law, then the
shareholder must return to the Company such distribution,
unless the shareholder did not know and did not need to know
that the distribution was a prohibited distribution.
(b) It is assumed that a shareholder in the Company, who at the
time of the distribution is not a Director, General Manager
or controlling shareholder of the Company, did not know and
did not need to know that the distribution carried out was a
prohibited distribution.
88. In the event that the Company carried out a prohibited distribution,
then Director at the time of the distribution shall be deemed to have
committed breach of his or her fiduciary duty to the Company, unless
the Director can prove one of the following:
(1) that the Director opposed the prohibited distribution and
took all reasonable steps to prevent it;
(2) that the Director exercised reasonable reliance on
information under which - had it not been misleading - the
distribution would have permitted;
(3) that under the circumstances the Director did not know and
did not need to know of the distribution.
89. ACQUISITION OF SHARES/CAPITALIZATION OF PROFITS.
89.1 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
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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 acquires any of its
shares, any such share shall become a dormant share, and shall not
confer any rights, so long as it is held by the Company.
89.2 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 provisions of the Companies
Law. In the event a subsidiary or such controlled company so acquires
any of the Company's shares, any such shares shall not confer any
voting rights, so long as they are held by such subsidiary or by such
controlled company.
89.3 CAPITALIZATION OF PROFITS. Subject to the Applicable Laws, the Company
may from time to time resolve that any sum, investment or property
("Retained Funds") not required as a source for payment of fixed
preferential dividends and (a) standing credited at that time to any
fund or to any reserve liability account of the Company, including
also premiums received from issuance of shares, debentures, or (b)
being net profits not distributed and remaining in the Company, shall
be capitalized, and that such investment sum or property be released
for distribution and be distributed as capital among the shareholders
according to the proportion to which they would be entitled if such
amount were distributed as dividends, in the manner so directed by
such resolution. The Board shall use such Retained Funds, according to
such resolution, for the full payment of such shares of the Company's
capital not issued to the shareholders and to issue such shares and to
distribute them as fully paid up shares among those shareholders
according to their pro rata shareholdings or to be used for the full
payment of shares to be issued upon the exercise of warrants
(cashless) basis. The Board may also use such Retained Funds in any
other manner permitted by such a resolution. If any difficulty shall
arise with respect to such a distribution the Board may allocate the
distribution as it deems desirable and shall be permitted to determine
the value of the Retained Funds for the purpose of such distribution
of all fully paid up shares, to pay money to any such shareholder
according to the value determined in this manner in order to
coordinate and adjust the shareholders' rights. The Board shall also
be permitted to determine that fractional amounts of less than NIS 1
shall not be taken into account in order to adjust the rights of all
parties, to give all such shares, cash or property to trustees to hold
in escrow for such persons entitled to part of such distribution in
accordance with and against such security as the Board shall so
determine from time to time.
ACCOUNTS
90. The Board shall cause accurate books of account to be kept in
accordance with the provisions of the Companies Law. Such books of
account shall be kept at the Registered Office, or at such other place
or places as the Board may think fit, 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.
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91. At least once in every fiscal year the accounts of the Company shall
be audited and the correctness of the profit and loss account and
balance sheet certified by one or more duly qualified auditors.
92. The appointment, authorities, rights and duties of the Auditor(s) of
the Company shall be regulated by the Applicable Laws.
NOTICES
93. A notice or any other document may be delivered by the Company to a
shareholder either personally or by sending it by prepaid mail in
Israel (by air mail if sent to a place outside Israel, other than the
U.S. or Canada, or by first class mail if sent within the U.S. or
Canada) addressed to such shareholder at the shareholder's address as
reflected in the Register or such other address as the shareholder may
have designated in writing for the receipt of notices and other
documents. Any written notice or other document shall be deemed to
have been delivered forty-eight (48) hours after it has been mailed
(four (4) days if sent to a place or mailed at a place outside of
Israel from Israel, or forty-eight (48) hours if sent within the U.S.
or Canada), or when actually received by the addressee if sooner than
forty-eight (48) hours or four (4) days, as the case may be; provided
however, that such notice or other document mentioned above may be
sent by facsimile or by electronic means and followed by mail as
aforesaid, and such notice shall be deemed to have been given the
first day after such facsimile or electronic message has been sent or
when actually received by such shareholder, whichever is earlier. If a
notice is in fact, received by the addressee, the notice shall be
deemed to be duly delivered to the shareholder when received,
notwithstanding that the notice or document was defectively addressed
or failed in some respect to comply with the provisions of this
Article.
(b) All notices to be given to the shareholders shall, with respect to any
shares to which persons are jointly entitled, be given to whichever of
such persons is named first in the Register, and any notice so given
shall be sufficient notice to the holders of such shares.
(c) Any shareholder whose address not included in the Register, and who
shall not have designated in writing an address for the receipt of
notices, shall not be entitled to receive any notice from the Company.
(d) Any notice or other document delivered to any shareholder in
accordance with these Articles shall be deemed to be duly served or
sent in respect of any shares held by the shareholder (either alone or
jointly with others) in the event of the death or bankruptcy of the
shareholder until such time as a successor, administrator or heir is
registered in the Register in place of the aforesaid shareholder.
(e) Where a given number of days' notice, or notice extending over any
period, is required to be given, the day the notice is sent shall be
counted in such number of days or other period.
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INSURANCE, INDEMNIFICATION AND RELEASE OF OFFICE HOLDERS
94. INSURANCE OF OFFICE HOLDERS.
94.1 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 or her as a
result of an act done by him or her in his or her capacity as an
Office Holder of the Company, in any of the following:
94.1.1. a breach of his or her duty of care to the Company or to another
person;
94.1.2. a breach of his or her 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;
94.1.3. a financial liability imposed on him or her in favor of another
person.
95. INDEMNIFICATION OF OFFICE HOLDERS.
95.1 The Company may, to the extent permitted by the Companies Law,
indemnify an Office Holder of the Company for liability or expense he
or she incurs as a result of an act done by him or her in his or her
capacity as an Office Holder of the Company, as follows:
95.1.1. a financial liability imposed on him or her in favor of
another person by a court judgment, including a settlement
judgment or an arbitrator's award approved by a court;
95.1.2. reasonable litigation expenses, including attorneys' fees,
expenses by an Office Holder or charged to him or her by a
court, in a proceeding filed against him or her by the
Company or on its behalf or by another person, or in a
criminal charge from which he or she was acquitted, or in a
criminal charge of which he or she was convicted of a crime
which does not require a finding of criminal intent.
95.2. The Company may indemnify an Officer Holder of the Company pursuant to
this Article 95 retrospectively, or may also undertake in advance to
indemnify an Office Holder of the Company, provided the undertaking is
limited to events of a kind which the Board believes can be
anticipated at the time of such undertaking, and in an amount that the
Board determined is reasonable under the circumstances.
96. 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 or her
liability, in whole or in part, for damages resulting from the breach
of his or her duty of care of the Company.
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97. GENERAL.
The provisions of Articles 94, 95 and 96 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 is permitted under the Law.
WINDING-UP
98. In the event that the Company is wound up, whether voluntarily or
otherwise, the liquidators may, subject to the provision of any of the
Applicable Laws, divide among the shareholders in specie any part of
the assets of the Company and may, with like sanction, vest any part
of the assets of the Company in trustees upon such trusts, for the
benefit of the shareholders, as the liquidators with like sanction
shall think fit.
99. The Company purpose is to operate according to business considerations
with the general goal of producing profits and among the
considerations may also be taken into account the interests of its
creditors, its employees and the public interest. The Company may also
contribute a reasonable amount to worthy causes even if the
contribution does not meet the framework of the aforesaid business
considerations.
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