SECTION
3.05. Indemnification: Contribution. (a) Indemnification by the
Company. The Company shall, and it hereby agrees to, indemnify and hold harmless, in
the case of any registration statement fled pursuant to Section 3.01 or 3.02 registering
Registrable Shares of a Holder, such Holder, such Holder’s directors and officers,
and each person who participates as a placement or sales agent or as an underwriter in any
offering or sale of the Registrable Shares, from and against any losses, claims, damages
or liabilities to which such Holder or such director or officer or such agent or
underwriter may become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any registration statement, or any preliminary or final
prospectus contained therein, or any amendment or supplement thereto, or any document
incorporated by it reference therein, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading and the Company shall, and it
hereby agrees to, reimburse each such Holder or any such director or officer or agent or
underwriter for any legal or other expenses reasonably incurred by than in connection with
investigating or defending any such action or claim as such expenses are incurred;
provided, however, that the Company shall not be liable to any such person in any such
case to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, or preliminary or final prospectus, or amendment or
supplement thereto, or document incorporated by reference therein, in reliance upon and in
conformity with written information furnished to the Company by such Holder or such
director or officer or any agent, underwriter or representative of such Holder expressly
for use therein, or by such Holder’s failure to furnish the Company, upon request;
with the information with respect to such Holder, such Holder’s directors and
officers, or any agent, underwriter or representative of such Holder, or such
Holder’s intended method of distribution, that is the subject of the untrue statement
or omission or if the Company shall sustain the burden of proving that such Holder, such
Holder’s directors and officers, or such agent or underwriter sold securities to the
person alleging such loss, claim, damage or liability without sanding or giving, at or
prior to the written confirmation of such We, a copy of the applicable prospectus
(excluding any documents incorporated by reference therein) or of the applicable
prospectus, as then amended or supplemented (excluding any documents incorporated by
reference therein) if the Company had previously furnished copies thereof to the such
Holder or such agent or underwriter, and such prospectus corrected such untrue statement
or alleged untrue statement or omission or alleged omission made in such Registration.
(b)
Indemnification by the Holder and Any Agent or Underwriters. Each Holder
requesting or joining in a Registration severally and not jointly shall
indemnify and hold harmless the Company, each of its directors and officers,
each person, if any, who controls the Company within the meaning of the
Securities Act, and each agent and any underwriter for the Company (within the
meaning of the Securities Act) against any losses, claims, damages or
liabilities, joint or several, to which the Company or any such director,
officer, controlling person, agent or underwriter may became subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon an untrue statement or alleged Untrue statement of any material fact
contained in such registration statement, or any preliminary or final
prospectus contained therein, or any amendment or supplement thereto, or any
document incorporated by reference therein, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
registration statement, preliminary or final prospectus, or amendments or
supplements thereto, or documents incorporated by reference therein, in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Holder expressly for use therein; and each such
Holder shall reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, agent or underwriter
in connection with investigating or defending any such action or claim as such
expenses are incurred.
9
(c)
Notice of Claims, Etc. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party pursuant to the indemnification provisions
of, or as contemplated by, this Section 3.05, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than pursuant to such provisions. In case any
such action or proceeding shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof the
indemnifying party shall be entitled to participate therein and to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party (which shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof the indemnifying party shall not be liable to such
indemnified party for any legal of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation If the
indemnifying party is not entitled to, or elects not to, assume the defense of
a claim, it will not be obligated to pay the fees and expenses of more than one
counsel (in addition to local counsel) for each indemnified party with respect
to such claim. The indemnifying party will not be subject to any liability for
any settlement made without its consent, which consent shall not be
unreasonably withheld or delayed. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of or consent to the entry of any judgment with respect to, any pending or
treated action or claim in respect of which indemnification or contribution may
be sought unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out
of such action or claim and (ii) does not include a statement as to or an
admission of fault; culpability or a failure to act, by or behalf of any
indemnified party.
(d)
Contribution. Each Holder requesting or joining in a Registration and the
Company agree that it, for any reason, the indemnification provisions
contemplated by Section 3.05 (a) or Section 3.05(b) hereof are unavailable to
or are insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) in such proportion as is appropriate to reflect the relative fault of,
and benefits derived by, the indemnifying party and the indemnified party, as
well as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnifying party or by such indemnified
party, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The parties
hereto agree that it would not be just and equitable if contributions pursuant
to this Section 3.05(d) were determined by pro rata allocation (even if the
Holder or any agents for, or underwriters of the Registrable Shares, or all of
them, were treated as one entity for such purposes); or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 3.05(d). The amount paid or payable by an indemnified party
as a result of the losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to above shall be doomed to include
(subject to the limitations set forth in Section 3.05(c) hereof) any legal. or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Notwithstanding the foregoing, an
indemnifying party shall not be required to contribute under this Section
3.05(d) except under such circumstances as such indemnifying party would have
been liable pursuant to Section 3.05(a) or (b) had such indemnification been
enforceable under applicable law.
10
(e)
Beneficiaries of Indemnification. The obligations of the Company under
this Section 3.05 shall be in addition to any liability that it may otherwise
have and shall extend, upon the same terms end conditions, to each officer,
director and partner of each Holder requesting or joining in a Registration and
each agent and underwriter of the Registrable Shares and each person, if any,
who controls such Holder or any such agent or underwriter within the meaning of
the Securities Act; and the obligations of such Holder and any agents or
underwriters contemplated by this Section 3.05 shall be in addition to any
liability that such Holder or its respective agent or underwriter may otherwise
have and shall extend, upon the same terms and conditions, to each officer and
director of the Company (including any person who, with his consent, is named
in any registration statement as about to become a director of the Company) and
to each person, if any, who controls the Company within the meaning of the
Securities Act.
SECTION
3.06. Underwriters. If any of the Registrable Shares are to be sold
pursuant to an underwritten offering, the investment banker or bankers and the managing
underwriter or underwriters thereof shall be selected by the Company except in the case of
a Demand Registration, in which case the managing underwriter or underwriters shall be
selected by the Holder requesting such Registration after consultation with the Company
and any other Holder who elects to participate in the registration (if known at the time
of such selection) and taking into account the Company’s and such other Holder’s
reasonable requests, provided that such managing underwriter or underwriters must be of
recognized international standing.
SECTION
3.07. Lockups. (a) Each Holder shall, in connection with any registration of
the Company’s securities pursuant to Section 3.01 or 3.02, upon the request of the
Company or the underwriters managing any underwritten offering of the Company’s
securities, agree in writing not to effect any sale, disposition or distribution of any
Registrable Shares (other than that included in the registration) without the prior
written consent of the Company or the representatives of such underwriters, as the case
may be, for such period of time not to exceed 180 days from the effective date of such
registration as the Company or the underwriters may specify.
(b)
The Company shall, if so required by the managing underwriters in connection
with an underwritten offering of Registrable Shares pursuant to Section 3.01 or
3.02, agree in writing not to effect any sale, disposition or distribution of
any Ordinary Shares or securities convertible into or exchangeable or
exercisable for Ordinary Shares (other than that included in the registration)
without the prior written consent of the representatives of such underwriters
for such period of time not to exceed 180 days from the effective date of such
registration as the underwriter may specify, except in connection with a stock
option plan, stock purchase plan, savings or similar plan, or an acquisition,
merger or exchange offer.
SECTION
3.08. Over-allotment Options. It is understood that in any
underwritten offering of Registrable Shares in addition to the shares (the
“initial shares”) the underwriters have committed to purchase, the
underwriting agreement may grant the underwriters an option to purchase a number of
additional shares (the “option shares”) equal to up to 15% of the initial
shares (or such other maximum amount as the National Association of Securities Dealers,
Inc.Financial Industry Regulatory Authority may then permit), solely to cover
over-allotments, if any. In the absence of agreement to the contrary, the number of
initial shares and option shares to be sold by the Company and the Holders participating
in such offering shall be allocated pro rata among such persons an the basis of the
relative number of Registrable Shares each person has requested to be included in such
registration.
11
SECTION
3.09. Preparation: Reasonable Investigation. In connection with the
preparation and fling of each registration statement registering Registrable Shares under
the Securities Act, the Company will give the Holders participating in such registration
and its underwriters, if any, and its counsel and accountants, the opportunity to
participate in the preparation of such registration statement, each prospectus included
therein are filed with the Commission, and each amendment thereof or supplement thereto,
and will give it such access to its books and records and such opportunities to discuss
the business of the Company with its of cars and the independent public accountants who
have issued a report on its financial statements as shall be necessary, in the opinion of
such Holders and such underwriters or their respective counsel to conduct a reasonable
investigation within the meaning of the Securities Act.
ARTICLE IV
MISCELLANEOUS
SECTION
4.01. Terms of Agreement: Termination. The term of this Agreement
shall commence on the date hereof and such term and this Agreement shall terminate with
respect to a Holder on the earlier of: (i) tenfive (5) years from the date of this
AgreementEffective Date; and (ii) when the Registrable Shares held by such Holder can be
sold in the United States public market pursuant to an exemption from the registration
requirements of the Securities Act and without regard to holding period, volume or
manner-of-sale limitations.
SECTION
4.02. Effective Date. This Agreement shall become effective subject to and only
after the fulfillment of each of the following conditions (the date on which this
Agreement shall become effective, the “Effective Date”):
(a)
A resolution at a general meeting of the shareholders of the Company to approve
and adopt this Agreement shall have been dully passed; and
(b)
The consummation of the transactions contemplated by the Share Purchase
Agreement shall have been occurred.
SECTION
4.03.Specific Performance and Other Equitable Rights. Each of the
parties hereto recognizes and acknowledges that a breach by a party or by any assignee
thereof of any covenants or other commitments contained in this Agreement will cause the
other party to sustain injury for which it would not have an adequate remedy at law for
money damages. Therefore, each of the parties hereto agrees that in the event of any such
breach, the aggrieved party shall be entitled to the remedy of specific performance of
such covenants or commitments and preliminary and permanent injunctive and other equitable
relief in addition to any other remedy to which it may be entitled, at law or in equity,
and the parties hereto hereby waive any requirement for the securing or posting of any
bond in connection with the obtaining of any such injunctive or other equitable relief.
SECTION
4.03.04. Notices. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given and made if in writing and if served by
personal delivery upon the party for whom it is intended or delivered by registered or
certified mail, return receipt requested, or if sent by telecopier, upon receipt of oral
confirmation that such transmission has been received, to the person at the address set
forth below, or such other address as may be designated in writing hereafter, in the same
manner, by such person:
12
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(a) |
If
to the Company, addressed as follows: |
| |
Partner Communications Company Ltd.
8 Amal Street
Afeq Industrial Park
Rosh-Ha'ayin 48103
Israel
Attention: Roly Klinger
Telecopier: 972-3-905-4193054-7814193 |
| |
Shearman & Sterling
199 Bishopsgate
Broadgate West
9 Appold Street
London EC2M 3TYEC2A 2AP England
Attention: Pamela M. Gibson Richard Price
George Karafotias
Telecopier.: 44-171-920-9000207 655 5500 |
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(b) |
If to Adventthe Shareholder, addressed as follows: |
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18th Floor, Two Harbourfont
22 Tak Fung Street
Hunghom, Kowloon
Hong:Kong
Scailex Corporation Ltd.
48 Ben Zion Galis St,
Segula Industrial Park,
Petach Tikva, Israel 49277
Attention: Director of FinanceCEO
Telecopier: 852-2-827-1371 03-930 0424 |
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(c) |
If
to Matbit, addressed as follows: |
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Avital Dromi & Co. Law Office
4 Taas Street
Ramat Gan 52512
Attention:
Telecopier:
|
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(d) |
If
to Tapuz, addressed as follows: |
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2 Dov Friedman Street
Ramat Gan [52512]
Israel
Attention:
Telecopier:
|
13
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(e) |
If
to Matav, addressed as follows: |
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42 Finkas Street
North Industrial Area
Netanya 42134
Israel
Attention:
Telecopier: |
or to such other address as the
relevant party may from time to time advise by notice in writing given pursuant to this
Section 4.03.04. The date of receipt of any such notice, request, consent, agreement or
approval shall be deemed to be the date of delivery thereof.
SECTION
4.04.05. Survival. The several indemnities, agreements,
representations, warranties and each other provision set forth in this Agreement or made
pursuant hereto shall remain in full force and effect regardless of any investigation (or
statement as to the results thereof) made by or on behalf of any party, any director or
officer of such party, or any controlling person of any of the foregoing, and shall
survive the transfer of any Registrable Shares by eachthe Shareholder, and the
indemnification and contribution provisions set forth in Section 3.05 hereof shall survive
termination of this Agreement.
SECTION
4.05.06. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or public policy,
all other terms and provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
SECTION
4.06.07. Transfer of Registration Rights. The registration rights of
eachthe Shareholder in this Agreement with respect to any Registrable Shares may be
transferred (i) to any person acquiring all of the Registrable Shares held by the Holder
or a part of the Registrable Shares held by a Holder comprising at least 4.99% of the
outstanding Ordinary Shares and the transferee acquires the right to nominate a
representative to the board of directors of the Company at the time the transferee
acquires such shares or (ii) by Tapuz to Eurocom, Hapoalim Electric and/or Tapuz Cellular
Systems Ltd. and Matbit to Matav and/or Elbit; provided, however, that the Company may
deny the transfer of such registration rights in any such case if (i) such transfer
relates to a sale or other transfer of all of the Registrable Shares to a person who is a
competitor of the Company or its subsidiaries in the industry or (ii) any conditions in
the last sentence of this Section 4.0607 are not met. Each such transfer is contingent on
suchthe Shareholder or the transferring person satisfying the following: (i) eachthe Shareholder or transferring person shall have given the Company written notice at or prior
to the time of such transfer stating the name and address of the transferee and
identifying the securities with respect to which the rights under this Agreement are being
transferred; (ii) such transferee shall have agreed in writing, in form and substance
reasonably satisfactory to the Company, to be bound by the provisions of this Agreement;
and (iii) immediately following such transfer the further disposition of such securities
by each transferee shall be restricted under the Securities Act.
15
SECTION
4.07.08. Successors and Assigns. Except as otherwise expressly
provided herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties hereto. Except as
expressly provided in this Agreement, nothing in this Agreement, express or implied, is
intended to confer upon any person other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under or by
reason of this Agreement.
SECTION
4.08.09. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION
4.09.10. Entire Agreement: Amendments. This Agreement and the other
writings referred to herein or delivered pursuant hereto which fore a part hereof contain
the entire understanding of the parties with respect is to its subject matter. This
Agreement supersedes all prior agreements and understanding among the parties with respect
to its subject matter. This Agreement may be amended and the observance of any term of
this Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) only by a written instrument duly executed by each of the
parties, which shall be binding on all of the parties
SECTION
4.10.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shat
constitute one and the same instrument.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
above written.
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PARTNER COMMUNICATIONS COMPANY LTD.
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By: |
_________________________________ |
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Name: |
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Title: |
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SCAILEX CORPORATION LTD.
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By: |
_________________________________ |
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Name: |
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Title: |
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MATBIT TELECOMMUNICATIONS SYSTEMS LTD.
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By: |
_________________________________ |
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Name: |
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Title: |
15
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TAPUZ CELLULAR SYSTEMS LIMITED PARTNERSHIP
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By: |
_________________________________ |
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Name: |
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Title: |
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MATAV INVESTMENTS LTD.
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By: |
_________________________________ |
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Name: |
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Title: |
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ADVENT INVESTMENTS PTE LTD.
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By: |
_________________________________ |
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Name: |
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Title: |
16
Annex “B”
_____________, 2009
Dear Ms./Mr. ________:
Letter of
Indemnification
| 1. |
Partner
Communications Company Ltd. (“Partner”) hereby undertakes to
indemnify you for any liability or expense that you incur or that is imposed on
you in consequence of an action or an inaction by you (including prior to the
date of this letter), in your capacity of an officer or director in Partner or
as an officer or director on behalf of Partner in a company controlled by
Partner or in which Partner has an interest (such companies being referred to
herein as “Subsidiaries”), as follows: |
| |
1.1. |
Financial
liability that you incur or is imposed on you in accordance with a
judgment, including a judgment given in a settlement or a judgment of an
arbitrator approved by the Court, provided that such liability pertain to
one or more of the events set out in Schedule I hereto, which, in
the opinion of the Board of Directors of Partner, are anticipated in light
of Partner’s activities at the time of granting this undertaking and
are at the sum or measurement of indemnification determined by the Board
of Directors to be reasonable given the circumstances set forth herein; |
| |
1.2. |
Reasonable
litigation expenses, including legal fees, that you may incur or for which
you will be ordered to pay by a Court in the context of proceedings filed
against you by or on behalf of Partner or by a third party, or in a
criminal proceeding in which you are acquitted or if you are convicted,
for an offense which does not require criminal intent; and |
| |
1.3. |
Reasonable
litigation expenses, including legal fees that you may incur due to an
investigation or proceeding conducted against you by an authority authorized
to conduct such investigation or proceeding and which has ended without
the filing of an indictment against you and either (i) no financial
liability was imposed on you in lieu of criminal proceedings, or (ii) financial
liability was imposed on you in lieu of criminal proceedings but the
alleged criminal offense does not require proof of criminal intent, within
the meaning of the relevant terms in or in the law referred to in the
Israeli Companies Law (as defined below). |
| 2. |
Partner
may not indemnify you for your liability for: (i) a breach of duty of loyalty
towards Partner unless you have acted in good faith and had reasonable grounds
to assume that the action would not harm Partner; (ii) a breach of duty of care
done intentionally or recklessly (“pzizut”) except for
negligence; (iii) an intentional act intended to unlawfully yield a personal
profit; and (iv) a fine or a penalty imposed upon you. |
| |
Upon
the occurrence of an event for which you may be entitled to be indemnified, subject to the
terms of this letter (including the limitations as to amount in Section 3.13) and any laws
applicable at such time, Partner shall provide you with the necessary payments to cover
all your expenses in respect of the legal proceedings in question, so that you will not
have to pay for or finance them yourself. |
| 3. |
Indemnification
pursuant to this letter will be subject to applicable law and to the
following terms and conditions: |
| |
3.1. |
That
you notify Partner within a reasonable time of your learning of any legal
proceedings instigated against you in connection with any event that may
give rise to indemnification and that you provide Partner, or anyone
specified by Partner, with any documents connected to the proceeding in
question. |
| |
3.2. |
That
Partner reserves the right to represent you in the proceedings or to
appoint legal counsel of its choice for this purpose (unless its choice of
legal counsel is unacceptable to you on reasonable grounds). Partner or
such legal counsel will take all necessary steps to bring the matter to a
close and will keep you informed of key steps in the process. The
appointed counsel will be bound by a fiduciary duty to you and to Partner.
If a conflict of interests should arise between the appointed counsel and
yourself, counsel will inform Partner and you will be entitled to appoint
a different counsel reasonably acceptable to Partner and the terms of this
indemnification agreement shall apply to the new appointment. If Partner
should decide to settle by arbitration or by mediation or by settlement,
it shall be allowed to do so, provided that you do not incur any
additional expense or liability due to such arbitration, mediation or
settlement or that you have otherwise agreed to such arbitration,
mediation or settlement. If Partner so requests, you will sign any
document that will empower it or any appointed counsel to represent you
and defend you in any proceeding as stated above. You will cooperate as
reasonably demanded of you with Partner and any appointed legal counsel.
Partner shall cover all related expenses so that you will not have to make
any payments or incur any expenses yourself. |
| |
3.3. |
That
whether or not Partner shall operate in accordance with section 3.2 above,
indemnification shall still cover all and every kind of expense incurred
by you that is included in section 1 of this letter so that you will not
have to pay or finance them yourself. You will not be indemnified for any
expenses arising from a settlement, mediation or arbitration unless
Partner has agreed to the settlement, mediation or arbitration. |
| |
3.4. |
That
upon your request for payment in connection with any event according to
this indemnification letter, Partner shall complete all the necessary
arrangements required by the law for payment and shall act to receive all
necessary authorizations, if demanded. If any authorization should be
required for payment, and the payment is not authorized for any reason,
this payment or part of it will be subject to the approval of the court
(if relevant) and Partner shall act in order to receive authorization. |
| |
3.5. |
That
in the event that you are paid for any sums in accordance with this letter
of indemnification in connection with a legal proceeding, and later it
becomes clear that you were not entitled to such payments, the sums will
be considered as a loan given to you by Partner subject to the lowest
interest rate for purposes of Section 3(9) of the Income Tax Ordinance (or
any other legislation replacing it) which does not cause a taxable
benefit. You shall be required to repay such amounts in accordance with
the payment arrangements fixed by Partner, and at such time as Partner
shall request in writing. |
B - 2
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3.6. |
That
you shall remain entitled to indemnification by Partner as provided in this
letter of indemnification even when you are no longer an officer or
director in Partner or in a Subsidiary on Partner’s behalf, as long
as the events that led to the payments, costs and expenses for which
indemnification is being sought are a result of an action or an inaction
taken by you as such officer or director. |
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3.7. |
The
terms contained in this letter will be construed in accordance with the
Companies Law, 1999 (the “Israeli Companies Law”), and in
the absence of any definition in the Companies Law, pursuant to the
Securities Law, 1968. Schedule I hereto constitutes an integral
part hereof. |
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3.8. |
The
obligations of Partner under this letter shall be interpreted broadly and in
a manner that shall facilitate its implementation, to the fullest extent
permitted by law, and for the purposes for which it was intended. In the
event of a conflict between any provision of this letter and any provision
of the law that cannot be superseded, changed or amended, said provision
of the law shall supersede the specific provision in this letter, but
shall not limit or diminish the validity of the remaining provisions of
this letter. |
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3.9. |
The
indemnification under this letter will enter into effect upon your signing a
copy of the same in the appropriate place, and the delivery of such signed
copy to Partner. It is hereby agreed that your agreement to accept this
letter constitutes your irrevocable agreement that any previous
undertaking of Partner for indemnification towards you, to the extent
granted, shall become void automatically upon your signing this letter.
Notwithstanding the above, if this letter shall be declared or found void
for any reason whatsoever, then any previous undertaking of Partner for
indemnification towards you, which this letter is intended to replace,
shall remain in full force and effect. |
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3.10. |
Partner
may, in its sole discretion and at any time, revoke its undertaking to
indemnify hereunder, or reduce the Maximum Indemnity Amount (as defined in
section 3.13 below) thereunder, or limit the events to which it applies,
either in regard to all the officers or to some of them, to the extent
such change or revocation relates solely, to events that occur after the
date of such change, provided that prior notice has been given to you of
its intention to do so, in writing, at least 60 days before the date on
which its decision will enter into effect. No such decision will have a
retroactive effect of any kind whatsoever and the letter of
indemnification prior to such change or revocation, as the case may be,
will continue to apply and be in full force and effect for all purposes in
relation to any event that occurred prior to such change or revocation,
even if the proceeding in respect thereof is filed against you after the
change or revocation of the letter of indemnity. In all other cases, this
letter may not be changed unless Partner and you have agreed in writing. |
B - 3
| |
3.11. |
This
undertaking to indemnify is not a contract for the benefit of any third
party, including any insurer, and is not assignable nor will any insurer
have the right to demand participation of Partner in any payment for which
an insurer is made liable under any insurance agreement that has been made
with it, with the exception of the deductible specified in such agreement.
For the avoidance of any doubt in the event of death this letter will
apply to you and your estate. |
| |
3.12. |
No
waiver, delay, forbearance to act or extension granted by Partner or by you
will be construed in any circumstances as a waiver of the rights hereunder
or by law, and will not prevent any such party from taking all legal and
other steps as will be required in order to enforce such rights. |
| |
3.13. |
The
aggregate indemnification amount payable by Partner to all directors,
officers and other indemnified persons pursuant to all letters of
indemnification issued or that may be issued to them by Partner in the
future (including, inter alia, to officers and directors nominated
on behalf of Partner in Subsidiaries), will not exceed the higher of (i)
25% of shareholders equity and (ii) 25% of market capitalization, each as
measured at the time of indemnification (the “Maximum Indemnity
Amount”). |
| |
3.14. |
The
Maximum Indemnity Amount shall not be affected in any way by the existence
of, or payment under, insurance policies. Payment of the indemnification
shall not affect your right to receive insurance payments, if you receive
the same (either personally or through Partner or on your behalf) and
Partner will not be required to indemnity you for any sums that were, in
fact, already paid to you or for you in respect of insurance or any other
indemnification obligations made to you by any third party. In the event
there is any payment made under this letter and such payment is covered by
an insurance policy, Partner shall be entitled to collect such amount of
payment from the insurance proceeds. |
| |
3.15. |
In
the event the indemnification amount Partner is required to pay to its
directors and other indemnified persons, as mentioned in section 1 above,
exceeds at any time the Maximum Indemnity Amount or the balance of the
Maximum Indemnity Amount in accordance with section 3.13 above after
deducting any indemnification amounts paid or payable by Partner to any of
its directors or other indemnified persons at such time, such Maximum
Indemnification Amount or such remaining balance will be allocated among
the directors and the other indemnified persons entitled to
indemnification, in the same ratio as with respect to any event the amount
for which each individual directors or other indemnified persons may be
indemnified is to the aggregate amount that all of the relevant directors
and other indemnified persons involved in the event may be indemnified. |
| |
3.16. |
The
foregoing does not derogate from Partner’s right to indemnify you
retroactively in accordance with that permitted by the Articles of
Association of Partner and applicable law. |
B - 4
You should be aware that, insofar as
indemnification for liabilities arising under the United States Securities Act of 1933
(the “Securities Act”) may be permitted to Partner’s directors and
officers, Partner has been advised that in the opinion of the U.S. Securities and Exchange
Commission (the “SEC”) such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event of a claim
for such indemnification, Partner will (in accordance with an undertaking given to the
SEC), unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
[INTENTIONALLY LEFT
BLANK]
B - 5
The law of the State of Israel shall
govern this Letter of Indemnification and all issues related thereto, without giving
effect to any conflicts of law principles. The courts in Tel Aviv, Israel shall have the
exclusive local and international jurisdiction, in connection with this Letter of
Indemnification, except if an indemnification claim is related to a legal proceeding,
already filed by a third party in a different court.
Respectfully,
——————————————
on behalf of
Partner Communications Company Ltd. |
|
|
I accept the terms and conditions of
the above. I am aware that my agreement to accept this letter constitutes my irrevocable
agreement that any previous undertakings of Partner for indemnification, to the extent
granted, should become void automatically upon my signing this letter. Notwithstanding the
above, if this indemnification letter shall be void for any reason whatsoever, then, any
previous undertaking of Partner for indemnification towards me shall remain in full force
and effect.
——————————————
Name: _______________
Date: ________________ |
|
|
B - 6
Schedule I
Subject to the provisions of the law,
the following are the events referred to in section 1.1 of the Letter of Indemnification:
| 1. |
Any
offering of Partner’s securities to private investors and/or to the public
and listing of such securities, and/or the offer by Partner to purchase
securities from the public and/or from private investors or other holders, and
any undertakings, representations, warranties and other obligations related to
any such offering and Partner’s status as a public company or as an issuer
of securities. |
| 2. |
All
matters relating to Partner’s status, obligations and/or actions as a
public company, and/or the fact that Partner’s securities were issued to
the public or to private investors and/or are or were traded on a stock
exchange (including, without limitation, Nasdaq stock market, the Tel Aviv
Stock Exchange and the London Stock Exchange), whether in Israel or abroad. |
| 3. |
The
erection, construction and operation of Partner’s mobile telephone
network, including the erection and operation of antennas and other equipment
and environmental issues, including undertakings, activities and communications
with authorities regarding the foregoing and including the work performed by
Partner’s subcontractors in connection therewith. |
| 4. |
The
purchase, distribution, marketing and sale of handsets, other terminal
equipment and any other of Partner’s products and/or any marketing plans
and/or publications. |
| 5. |
A
Transaction, Extraordinary Transaction, or an Activity within the meaning of
section 1 of the Israeli Companies Law, including negotiations for entering
into a transaction or an activity, the transfer, sale, acquisition or charge of
assets or liabilities (including securities) or the grant or acceptance of a
right in any one of them, receiving credit and the grant of collateral, as well
as any act directly or indirectly involving such a transaction or activity. |
| 6. |
Investments
which Partner and/or its subsidiaries and/or its affiliates make in other
entities whether before and/or after the investment is made, entering into the
transaction, the execution, development and monitoring thereof, including
actions taken or alleged omissions by you in the name of Partner and/or any
subsidiary thereof and/or any affiliates thereof as a director, officer,
employee and/or a board observer of the entity which is the subject of the
transaction and the like. |
| 7. |
The
merger, acquisition or other business combination or any such proposed
transaction of Partner, any subsidiary thereof and/or any affiliate thereof
with, of or into another entity and/or the sale or proposed sale of the
operations and/or business, or part thereof, of Partner, any of its
subsidiaries and/or any of its affiliates. |
| 8. |
Labor
relations and/or employment matters in Partner, its subsidiaries and/or its
affiliates and trade relations of Partner, its subsidiaries and/or its
affiliates, including with independent contractors, customers, suppliers and
service providers. |
B - 7
| 9. |
The
testing of products developed and/or marketed by Partner, its subsidiaries
and/or its affiliates and/or in connection with the distribution, sale, license
or use of such products. |
| 10. |
The
intellectual property of Partner, its subsidiaries and/or its affiliates, and
its protection, including the registration or assertion of rights to
intellectual property and the defense of claims relating to intellectual
property infringement. |
| 11. |
Actions
taken (or alleged omissions) pursuant to or in accordance with the policies and
procedures of Partner, its subsidiaries and/or its affiliates, whether such
policies and procedures are published or not. |
| 12. |
The
borrowing or other receipt of funds and any other financing transaction or
arrangement, or any such proposed transaction or arrangement, whether or not
requiring the imposition of any pledge or lien. |
| 13. |
Any
company Distribution (as defined in the Israeli Companies Law). |
| 14. |
Taking
part in or performing tenders. |
| 15. |
The
making of any statement, including a representation or opinion made by an
officer or director of Partner in such capacity whether in public or private,
including during meetings of the Board of Directors or any committee thereof. |
| 16. |
An
act in contradiction to the Articles of Association or Memorandum of Partner. |
| 17. |
Any
action or decision in relation to work safety and/or working conditions. |
| 18. |
Actions
taken pursuant to any of Partner’s licenses, or any breach thereof. |
| 19. |
Decisions
and/or actions pertaining to the environment and/or the safety of handsets,
including radiation or dangerous substances. |
| 20. |
Negotiation
for, signing and performance or non-performance of insurance policies. |
| 21. |
Events
associated with the drawing up and/or approval of financial statements. |
| 22. |
Business
plans, including pricing, marketing, distribution, directives to employees,
customers and suppliers and collaborations with other parties. |
| 23. |
Reporting
and/or filing of applications or reports to any governmental or
quasi-governmental authority, stock exchange or regulatory body whether in
Israel or abroad. |
| 24. |
Actions
and any legal process, whether in Israel or abroad, relating, directly or
indirectly, to any governmental or quasi-governmental authority, including with
respect to trade restrictions, restrictive arrangements, mergers and
monopolies. |
| 25. |
Investigations
conducted against you by any governmental or quasi-governmental authority. |
B - 8
| 26. |
Class
actions, including class actions in respect of the environment, consumer
protection or complaints, roaming, content services, the Communications Law,
Partner’s license, Partner’s contracts, and anti-trust, derivative
actions or any other legal proceedings against you and/or Partner and/or any of
its Subsidiaries in connection with your role and/or activities in Partner or
on its behalf. |
| 27. |
Any
other actions which can be anticipated for companies of the type of Partner,
and which the Board of Directors may deem appropriate. |
| 28. |
Partner’s
public offering of equity in 1999, public offering of debt securities in 2000,
public offering of debt securities in 2005 (including any subsequent offer and
sale of the debt securities of that class), redemption of debt securities in
2005 and shelf registration in 2009. |
| 29. |
Share
repurchase and distribution of dividends in 2005 and distribution of dividends
during the calendar years of 2006, 2007, 2008 and 2009. |
| 30. |
All
matters relating to the change of control transaction, entered into on August
12, 2009 between Advent Investments Pte Ltd. and Scailex Corporation Ltd. (“Scailex”),
under which Scailex agreed to acquire 78,940,104 Ordinary Shares of Partner. |
| 31. |
Transactions
or agreements entered into between the Company and any of its shareholders or
between shareholders of the Company. |
| 32. |
All
matters relating to breach of Partner contracts. |
| 33. |
Activities
Partner may pursue in new areas such as transmission services, access to high-
speed Internet services, fixed line and long-distance telephony services, cable
television and other communication services to subscribers. |
| 34. |
A
suspicion as to perpetration of an offence and/or breach of a statutory
obligation under any law because of an action taken by Partner and that,
according to any law, can also be attributed to you and/or because of an action
taken by you by virtue of your function as officer or director in Partner
and/or that was taken for the sake of Partner and/or on its behalf. |
| 35. |
Any
of the foregoing events, relating to your service as an officer or director in
any of Partner’s Subsidiaries on Partner’s behalf. |
B - 9
Annex “C”
Articles of Association
of
Partner Communications
Company Ltd.
Table of Contents
|
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|
|
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|
|
|
|
|
|
|
|
|
|
| Chapter One - General |
C-3 |
| 1. |
Definitions and Interpretation |
C-3 |
| 2. |
Public Company |
C-5 |
| 3. |
The Purpose of the Company |
C-5 |
| 4. |
The Objectives of the Company |
C-5 |
| 5. |
Limited Liability |
C-5 |
| Chapter Two - The Share Capital of the Company |
C-6 |
| 6. |
Share Capital |
C-6 |
| 7. |
The Issuance of Shares and Other Equity Securities |
C-6 |
| 8. |
Calls for Payment |
C-7 |
| 9. |
The Shareholder Registers of the Company and the Issuance of Share Certificates |
C-8 |
| 10. |
Transfer of Shares of the Company |
C-9 |
| 10A. |
Limitations on Transfer of Shares |
C-11 |
| 10B. |
Required Minimum Holdings |
C-13 |
| 11. |
Bearer Share Certificate |
C-13 |
| 12. |
Pledge of Shares |
C-13 |
| 13. |
Changes in the Share Capital |
C-14 |
| Chapter Three - General Meetings |
C-16 |
| 14. |
The Authority of the General Meeting |
C-16 |
| 15. |
Kinds of General Meetings |
C-17 |
| 16. |
The Holding of General Meetings |
C-18 |
| 17. |
The Agenda of General Meetings |
C-19 |
| 18. |
Discussions in General Meetings |
C-20 |
| 19. |
Voting of the Shareholders |
C-21 |
| 20. |
The Appointment of a Proxy |
C-24 |
| 21. |
Deed of Vote, Voting Via the Internet |
C-25 |
| Chapter Four - The Board of Directors |
C-25 |
| 22. |
The Authority of the Board of Directors |
C-25 |
| 23. |
The Appointment of Directors and the Termination of Their Office |
C-27 |
| 24. |
Actions of Directors |
C-31 |
C - 2
Chapter One –
General
| 1. |
Definitions
and Interpretation |
| |
1.1. |
The
following terms in these Articles of Association bear the meaning appearing
alongside them below: |
| |
Articles of
Association |
The Articles of Association of the Company, as set forth herein or as
amended, whether explicitly or pursuant to any Law. |
| |
Business Day |
Sunday
to Thursday, inclusive, with the exception of holidays and official days of rest in the
State of Israel. |
| |
Companies Law |
The Companies Law, 1999. |
| |
Companies Ordinance
|
The Companies Ordinance [New Version], 1983. |
| |
Companies Regulations |
Regulations issued pursuant to the Companies Ordinance or Companies Law. |
| |
Director |
A
Director of the Company in accordance with the definition in Section 1 of the Companies
Law, including an Alternate Director or an empowered representative. |
| |
Document |
A
printout and any other form of written or printed words, including documents transmitted
in writing, via facsimile, telegram, telex, e–mail, on a computer or through any
other electronic instrumentation, producing or allowing the production of a copy and/or
an output of a document. |
| |
Founding Shareholder |
A
“founding shareholder or its substitute” as defined in Section 21.8 of the
License. |
| |
Founding Israeli
Shareholder |
A Founding Shareholder who also qualifies as an “Israeli Entity” as
defined for purposes of Section 22A of the License. |
| |
Financial Statements |
The
balance sheet, profit and loss statement, statement of changes in the share capital and
cash flow statements, including the notes attached to them. |
| |
Law |
The
provisions of any law (“din”) as defined in the Interpretation Law, 1981. |
| |
License |
The
Company’s General License for the Provision of Mobile Radio Telephone Services using
the Cellular Method in Israel dated April 7, 1998, and the permit issued by the Ministry
of Communications dated April 7, 1998. |
C - 3
| |
Linkage |
Payments
with respect to changes in the Israeli consumer price index or the representative
exchange rate of NIS vis-a-vis the U.S. dollar, as published by the Bank of Israel, or
any other rate which replaces such rate. |
| |
Minimum Founding
Shareholders Holding |
The minimum shareholding in the Company required to be held by Founding
Shareholders pursuant to Section 22A.1 of the License. |
| |
Minimum Israeli
Holding |
The minimum shareholding in the Company required to be held by Founding
Israeli Shareholders pursuant to Section 22A.2 of the License. |
| |
Office |
The
registered office of the Company. |
| |
Ordinary Majority |
A
simple majority of the shareholders who are entitled to vote and who voted in a General
Meeting in person, by means of a proxy or by means of a deed of voting. |
| |
Periodic Statement |
According
to its definition in Chapter B of the Securities Regulations (Periodic and Immediate
Reports), 1970, or such Securities Regulations replacing them. |
| |
Qualified Israeli
Director |
A director who at all times (i) is a citizen of Israel and resident in
Israel, (ii) qualifies to serve as a director under applicable law, (iii) qualifies as a
Director with Clearance as defined in section 25A, and (iv) is appointed to the Board of
Directors of the Company pursuant to section 23.2.6 of these Articles. |
| |
Record Date |
The
date on which a shareholder must be registered as a Shareholder in order to receive the
right to participate in and vote at an upcoming general meeting of Shareholders. |
| |
Securities |
Shares,
bonds, capital notes or securities negotiable into shares and certificates, conferring a
right in such securities, or other securities issued by the Company. |
| |
Securities Law
|
The Securities Law, 1968. |
| |
Securities Regulations
|
Regulations issued pursuant to the Securities Law. |
| |
Shares |
shares
in the share capital of the Company. |
| |
Shareholder |
Anyone
registered as a shareholder in the Shareholder Register of the Company. |
C - 4
| |
Special Majority |
A
majority of at least three quarters of the votes of shareholders who are entitled to vote
and who voted in a general meeting, in person, by means of a proxy or by means of a deed
of voting. |
| |
1.2. |
The
provisions of Sections 3 through 10 of the Interpretation Law, 1981, shall also
apply to the interpretation of these Articles of Association, mutatis mutandis,
unless the context otherwise requires. |
| |
1.3. |
Except
as otherwise provided in this Article, each word and expression in these
Articles of Association shall have the meaning given to it in accordance with
the Companies Law, and to the extent that no meaning is attached to it in the
Companies Law, the meaning given to it in the Companies Regulations, and if
they lack reference thereto, as stated, the meaning given to it in the
Securities Law or Securities Regulations, and in the absence of any meaning, as
stated, the meaning given to it in another Law, unless it contradicts the
relevant provision or its contents. |
| |
The
Company is a public company. |
| 3. |
The
Purpose of the Company |
| |
The
purpose of the Company is to operate in accordance with business considerations to
generate profits; provided, however, the Board of Directors is entitled to donate
reasonable amounts to worthy causes, even if such a donation is not within the framework
of business considerations, as stated. |
| 4. |
The
Objectives of the Company |
| |
The
Company shall engage in any legal business. |
| |
The
liability of the Shareholders of the Company is limited, each one up to the full amount
he undertook to pay for the Shares allotted to him, at the time of the allotment. |
C - 5
Chapter Two – The
Share Capital of the Company
| |
6.1. |
The
authorized share capital of the Company is NIS 2,350,000, divided into
235,000,000 ordinary shares at a par value of NIS 0.01 each (hereinafter: the
“Ordinary Shares”). |
| |
6.2. |
Each
Ordinary Share shall confer upon its holder the right to receive notices of,
and to attend and vote in, general meetings, and to one vote for each Ordinary
Share held by him. |
| |
6.3. |
Each
class of Shares shall also confer equal rights to each holder in the class with
respect to the amounts of equity which were paid or credited as paid with
respect to their par value, in all matters pertaining to dividends, the
distribution of bonus shares and any other distribution, return of capital and
participation in the distribution of the balance of the assets of the Company
upon liquidation. |
| |
6.4. |
The
provisions of these Articles of Association with respect to Shares, shall also
apply to other Securities issued by the Company, mutatis mutandis. |
| 7. |
The
Issuance of Shares and Other Securities |
| |
7.1. |
The
Board of Directors of the Company may issue Shares and other equity Securities
of the Company, up to the limit of the registered share capital of the Company.
In the event that the share capital of the Company includes several classes of
Shares and other equity Securities, no shares and other equity Securities shall
be issued above the limit of the registered share capital for its class. |
| |
7.2. |
The
Board of Directors of the Company may issue redeemable Securities, having such
rights and subject to such conditions as will be determined by the Board of
Directors. |
| |
7.3. |
Subject
to the provisions of these Articles of Association, the Board of Directors may
allot Shares and other Securities according to such stipulations and
conditions, at par value or by way of a premium, as it deems fit. |
| |
7.4. |
The
Board of Directors may decide on the issuance of a series of bonds or other
debt securities within the framework of its authority or to take a loan on
behalf of the Company and within the limits of the same authority. |
| |
7.5. |
The
Shareholders of the Company at any given time shall not have any preemption
right or priority or any other right whatsoever with respect to the acquisition
of Securities of the Company. The Board of Directors, in its sole discretion,
may decide to offer Securities of the Company first to existing Shareholders or
to any one or more of them. |
| |
7.6. |
The
Company is entitled to pay a commission (including underwriting fees) to any
person, in consideration for underwriting services, or the marketing or
distribution of Securities of the Company, whether reserved or unreserved, as
determined by the Board of Directors. Payments, as stated in this Article, may
be paid in cash or in Securities of the Company, or partly in one manner and
partly in another manner. |
C - 6
| |
8.1. |
In
the event that according to the terms of a Share allotment, there is no fixed
date for the payment of any part of the price that is to be paid for the
Shares, the Board of Directors may issue from time to time calls of payment to
the Shareholders with respect to the moneys which were not yet paid by them in
relation to the Shares (hereinafter: “Calls of Payment” or “a
Call of Payment”, as the case may be). |
| |
8.2. |
A
Call of Payment shall set a date, which will not be earlier than thirty days
from the date of the notice, by which the amount indicated in the Call of
Payment must be paid, together with interest, Linkage and expenses incurred in
consequence of the non–payment, according to the rates and amounts set by
the Board of Directors. The notice shall further specify that in the event of a
failure to pay within the date fixed, the Shares in respect of which payment or
the rate is required may be forfeited. In the event that a Shareholder fails to
meet any of its obligations, under a Call of Payment, the Share in respect of
which said notice was issued pursuant to the resolution of the Board of
Directors may be forfeited at any time thereafter. The forfeiture of Shares
shall include the forfeiture of all the dividends on same Shares which were not
paid prior to the forfeiture, even if such dividends were declared. |
| |
8.3. |
Any
amount, which according to the terms of a Share allotment, must be paid at the
time of issuance or at a fixed date, whether at the par value of the Share or
at a premium, shall be deemed for the purposes of these Articles of Association
to be combined in a duly issued Call of Payment. In the event of non-payment of
any such amount, all the provisions of these Articles of Association shall
apply with respect to such an amount, as if a proper Call of Payment has been
made and an appropriate notice thereof was given. |
| |
8.4. |
The
Board of Directors, acting reasonably and in good faith, may differentiate
among Shareholders with respect to amounts of Calls of Payment and/or their
payment time. |
| |
8.5. |
The
joint holders of Shares shall be liable, jointly and severally, for the payment
of Calls of Payment in respect of such Shares. |
| |
8.6. |
Any
payment for Shares shall be credited, pro rata, according to the par value of
and according to the premium on such Shares. |
| |
8.7. |
A
Call of Payment may be cancelled or deferred to another date, as may be decided
by the Board of Directors. The Board of Directors may waive any interest,
Linkage and expenses or any part of them. |
C - 7
| |
8.8. |
The
Board of Directors may receive from a Shareholder any payments for his Shares,
in addition to the amount of any Call of Payment, and the Board of Directors
may pay to the same Shareholder interest on amounts which were paid in advance,
as stated above, or on same part of them, in excess of the amount of the Call
of Payment, or to make any other arrangement with him which may compensate him
for the advancement of the payment. |
| |
8.9. |
A
Shareholder shall not be entitled to a dividend or to his other rights as a
Shareholder, unless he has fully paid the amounts specified in the Calls of
Payment issued to him, together with interest, Linkage and expenses, if any,
unless otherwise determined by the Board of Directors. |
| |
8.10. |
The
Board of Directors is entitled to sell, re-allot or transfer in any other
manner any Share which was forfeited, in the manner it decides, with or without
any amount paid on the Share or deemed as paid on it. |
| |
8.11. |
The
Board of Directors is entitled at all times prior to the sale, reallotment or
transfer of the forfeited Share to cancel the forfeiture on the conditions it
may decide. |
| |
8.12. |
A
person whose Shares have been forfeited shall, notwithstanding the forfeiture,
remain liable to pay to the Company all moneys which, up until the date of
forfeiture, were due and payable by him to the Company in respect of the
Shares, including interest, Linkage and expenses up until the actual payment
date in the same manner as if the Shares were not forfeited, and shall be
compelled to fulfill all the requirements and claims which the Company was
entitled to enforce with respect to the Shares up until the forfeiture date,
without any decrease or discount for the value of the Shares at the time of
forfeiture. His liability shall cease only if and when the Company receives the
full payment set at the time of allotment of the Shares. |
| |
8.13. |
The
Board of Directors may collect any Calls of Payment which were not paid on the
forfeited Shares or any part of them, as it deems fit, but it is not obligated
to do so. |
| |
8.14. |
The
forfeiture of a Share shall cause, as of the time of forfeiture, the
cancellation of all rights in the Company and of any claim or demand against
the Company with respect to that Share, and of other rights and obligations of
the Shareholder in respect of the Company, save as otherwise provided by Law. |
| 9. |
The
Shareholder Registers of the Company and the Issuance of Share Certificates |
| |
9.1. |
The
Company shall maintain a Shareholder Register and a Register of Significant
Shareholders, together with a notation of any Exceptional Holdings in
accordance with the provisions set forth in Article 10A below, to be
administered by the corporate secretary of the Company, subject to the
oversight of the Board of Directors. |
C - 8
| |
9.2. |
A
Shareholder is entitled to receive from the Company, free of charge, within two
months after an allotment or the registration of a transfer (unless the
conditions of the allotment fix a different period) one or several certificates
with respect to all the Shares of a certain class registered in his favor,
which certificate must specify the number of the Shares, the class of the
Shares and the amount paid for them and also any other detail deemed important
by the Board of Directors. In the event a Share is held jointly, the Company
shall not be obligated to issue more than one certificate for all the joint
holders, and the delivery of such a certificate to any of the joint holders
shall be viewed as if it was delivered to all of them. |
| |
9.3. |
Each
and every Share certificate shall be stamped with the seal or the stamp of the
Company or bear the Company’s printed name, and shall also bear the
signature of one Director and of the corporate secretary of the Company, or of
two Directors or of any other person appointed by the Board of Directors for
this purpose. |
| |
9.4. |
The
Company is entitled to issue a new Share certificate in place of an issued
Share certificate which was lost or spoiled or corrupted, following evidence
thereto and guarantees and indemnities, as may be required by the Company and
the payment of an amount determined by the Board of Directors. |
| |
9.5. |
Where
two people or more are registered as joint holders of Shares, each of them is
entitled to acknowledge the receipt of a dividend or other payments in
connection with such jointly held Shares, and such acknowledgement of any one
of them shall be good discharge of the Company’s obligation to pay such
dividend or other payments. |
| |
10.1. |
The
Shares are transferable. The transfer of Shares shall not be registered unless
the Company receives a deed of transfer (hereinafter: “Deed of Transfer”)
or other proper Document or instrument of transfer. A Deed of Transfer shall be
drawn up in the following manner or in any substantially similar manner or in
any other manner approved by the Board of Directors. |
| |
I,
_________________, (hereinafter: “The Transferor”) of ____________, do hereby
transfer to ___________ (hereinafter: “The Transferee”) of __________, for
valuable consideration paid to me, _________ Share(s) having a par value of NIS 0.01
each, numbered ________ to ________ (inclusive), of Partner Communications Company Ltd.
(hereinafter: the “Company”) to hold unto the Transferee, his executors,
administrators and assigns, subject to the same terms and conditions on which I held the
same at the time of the execution hereof; and I, the said Transferee, do hereby agree to
take the said Share(s) subject to the aforesaid terms and conditions. |
| |
In
witness whereof we have hereunto set our hands this _____ day of _________, _____. |
C - 9
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|
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|
|
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The Transferor |
The Transferee |
| |
Name: _______________ |
Name: _______________ |
| |
Signature: ____________ |
Signature: ____________ |
| |
|
| |
Witness to the Signature of: |
| |
The Transferor |
The Transferee |
| |
Name: _______________ |
Name: _______________ |
| |
Signature: ____________ |
Signature: ____________ |
| |
10.2. |
The
transfer of Shares which are not fully paid, or Shares on which the Company has
a lien or pledge, shall have no validity unless approved by the Board of
Directors, which may, in its absolute discretion and without giving any
reasoning thereto, decline the registration of such a transfer. The Board of
Directors may deny a transfer of Shares as aforesaid and may also impose a
condition of the transfer of Shares as aforesaid an undertaking by the
transferee to meet the obligations of the transferor with respect to the Shares
or the obligations for which the Company has a lien or pledge on the Shares,
signed by the transferee together with the signature of a witness,
authenticating the signature of the transferee. |
| |
10.3. |
The
transfer of a fraction of a Share shall lack validity. |
| |
10.4. |
A
transferor of Shares shall continue to be regarded as the holder of the
transferred Shares, until the name of the transferee of the Shares is
registered in the Shareholder Register of the Company. |
| |
10.5. |
A
Deed of Transfer shall be filed with the Company’s office for
registration, together with the Share Certificates for the Shares which are to
be transferred (if such are issued) and also any other evidence which the
Company may require with respect to the proprietary right of the transferor or
with respect to his right to transfer the Shares. Deeds of Transfer which are
registered shall remain with the Company. The Company is not obligated to
retain the Deeds of Transfer and the Share Certificates, which may be
cancelled, after the completion of a seven-year period from the registration of
the transfer. |
| |
10.6. |
A
joint Shareholder may transfer his right in a Share. In the event the
transferring Shareholder does not hold the relevant Share Certificate, the
transferor shall not be obligated to attach the Share Certificate to the Deed
of Transfer, so long as the Deed of Transfer shall indicate that the transferor
does not hold the Share Certificate, that the right he has in the Shares
therein is being transferred, and that the transferred Share is held jointly
with others, together with their details. |
| |
10.7. |
The
Company may require payment of a fee for the registration of the transfer, at
an amount or a rate determined by the Board of Directors from time to time. |
| |
10.8. |
The
Board of Directors may close the Shareholder Register for a period of up to
thirty days in each year. |
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| |
10.9. |
Subject
to Article 10.10, upon the death of a Shareholder, the Company shall recognize
the custodians or administrators of the estate or executors of the will, and in
the absence of such, the lawful heirs of the Shareholder, as the only holders
of the right for the Shares of the deceased Shareholder, after receipt of
evidence to the entitlement thereto, as determined by the Board of Directors. |
| |
10.10. |
In
the event that a deceased Shareholder held Shares jointly with others, the
Company shall acknowledge each survivor as a joint Shareholder with respect to
said Shares, unless all the joint holders in the Share notify the Company in
writing, prior to the death of any of them, of their will that the provisions
of this Article shall not apply to them. The foregoing shall not release the
estate of a joint Shareholder of any obligation in relation to a Share which is
held jointly. |
| |
10.11. |
A
person acquiring a right in Shares in consequence of being a custodian,
administrator of the estate, the heir of a Shareholder, a receiver, liquidator
or a trustee in a bankruptcy of a Shareholder or according to another provision
of the Law, is entitled, after providing evidence to his right, to the
satisfaction of the Board of Directors, to be registered as the Shareholder or
to transfer such Shares to another person, subject to the provisions of these
Articles of Association with respect to transfers. |
| |
10.12. |
A
person becoming entitled to a Share because of the death of a Shareholder shall
be entitled to receive, and to give receipts for, dividends or other payments
paid or distributions made, with respect to the Share, but shall not be
entitled to receive notices with respect to General Meetings of the Company or
to participate or vote therein with respect to that Share, or to exercise any
other right of a Shareholder, until he has been registered in the Shareholder
Register as the holder of that Share. |
| |
10.13. |
Notwithstanding
anything to the contrary in Articles 10.5 and 10.7, the transfer of Shares as a
result of a realization of a share pledge entered into by a Shareholder of the
Company in connection with the Company’s $650 million credit facility
dated August 13, 1998, as amended from time to time, will not require
additional evidence with respect to the proprietary right of the transferor or
with respect to his right to transfer the shares other than a properly
completed deed of transfer and valid Share Certificate (if issued), nor will
the Company require a fee for the registration of said transfer. |
| 10A. |
Limitations
on Transfer of Shares |
| |
10A.1. |
Exceptional
Holdings shall be registered in the Register of Members (Shareholder Register)
together with a notation that such holdings have been classified as “Exceptional
Holdings”, immediately upon the Company’s learning of such matter.
Notice of such registration shall be sent by the Company to the registered
holder of the Exceptional Holding and to the Minister of Communications. |
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| |
10A.2. |
Exceptional
Holdings, registered in the manner set forth in Article 10A.1, shall not
entitle the holder to any rights in respect to his holdings, and such holdings
shall be considered “Dormant Shares” within the meaning of Section
308 of the Companies Law, except, however, that the holder of such shares shall
be entitled to receive dividends and other distributions to shareholders
(including the right to participate in a rights offering calculated on the
basis of Means of Control of the Company (as defined in the License), provided,
however, that such additional holdings shall be considered Exceptional
Holdings). Therefore, any action taken or claim made on the basis of a right
deriving from an Exceptional Holdings shall have no effect, except for the
receipt of dividends or other distribution as stated above. |
| |
Without
derogating from the above: |
| |
10A2.1 |
A
Shareholder participating in a vote of the General Meeting will certify to the Company
prior to the vote or, if the vote is by Deed of Vote, on the Deed of Vote, as to whether
or not his holdings in the Company or his vote require consent pursuant to Sections 21
and 23 to the License; in the event the shareholder does not provide notification as
aforesaid, he shall not vote and his vote shall not be counted. |
| |
10A.2.2 |
No
Director shall be appointed, elected or removed on the basis of Exceptional Holdings. In
the event a Director is appointed, elected or removed from his position as a Director as
set forth above, such appointment, election or removal shall have no effect. |
| |
10A.2.3 |
Exceptional
Holdings shall have no voting rights at a General Meeting of the Company. |
| |
For
the purposes of this Article 10A, “Exceptional Holdings” means the
holdings of Traded Means of Control held without the consent of the Minister of
Communications pursuant to Section 21 to the License or as a result of a breach of the
provisions of Section 23 to the License, and all holdings of a holder of Traded Means of
Control who acted contrary to the provisions of Section 24 to the License; and as long as
the consent of the Minister of Communications is required but has not been obtained
pursuant to Section 21 to the License, or the circumstances exist which constitute a
violation of the provisions of Sections 23 or 24 to the License. |
| |
For
the purposes of this Article 10A, “Traded Means of Control” means Means
of Control (as defined in the License) including Global or American Depositary Shares
(GDRs or ADRs) or similar certificates, registered for trade on a securities exchange in
Israel or abroad or which have been offered to the public in connection with a
prospectus, and are held by the public in Israel or abroad. |
| |
10A.3. |
The
provisions of Article 10A shall not apply to those who were Shareholders of
the Company on the eve of the first registration of the Company’s
Shares for trade. |
C - 12
| 10B. |
Required
Minimum Holdings |
| |
10B.1. |
Our
License requires that Founding Shareholders hold Shares constituting at least
the Minimum Founding Shareholders Holding and that Founding Israeli
Shareholders hold Shares constituting at least the Minimum Israeli Holding. |
| |
10B.2. |
Shares
held by Founding Shareholders, to the extent such Shares constitute all or a
portion of the Minimum Founding Shareholders Holding, shall be registered
directly in the name of the Founding Shareholder in the shareholder register of
the Company, with a note indicating that such Shares are “Minimum Founding
Shareholders Shares.” Minimum Founding Shareholders Shares that are held
by Founding Israeli Shareholders, to the extent such Shares constitute all or a
portion of the Minimum Israeli Holding, shall also be recorded in the
shareholder register with a note indicating that such Shares are “Minimum
Israeli Holding Shares. |
| |
10B.3. |
No
transfer by a Founding Shareholder of Minimum Founding Shareholder Shares or by
a Founding Israeli Shareholder of Minimum Israeli Holding Shares shall be
recorded in the Company’s shareholder register, or have any effect, unless
the Company’s Secretary shall have received written confirmation from the
Ministry of Communications that the transfer complies with section 21.8 of the
License. The Company Secretary may, in his or her discretion, refer any
question in connection with the recording of Minimum Founding Shareholders
Shares or Minimum Israeli Holding Shares, or their transfer, to the Company’s
audit committee whose decision shall be binding on the Company. As a condition
to any transfer of Minimum Founding Shareholders Shares or Minimum Israeli
Holding Shares, the transferee shall be required to deliver to the Company’s
Secretary (a) a share transfer deed that includes an undertaking by the
transferee to comply with all requirements of section 22A of the License and
(b) all information requested with respect to the transferee’s
qualification as a Founding Shareholder and/or a Founding Israeli Shareholder. |
| 11. |
Bearer
Share Certificate |
| |
The
Company shall not issue bearer Share Certificates which grant the bearer rights in the
Shares specified therein. |
| |
12.1. |
The
Company shall have a first degree pledge on, and a right to create a lien on,
all Shares which are not fully paid and registered in the name of any
Shareholder, and the proceeds of their sale, with respect to moneys (which
payment time is due or not) whose payment was already called or are to be paid
up within a fixed time. Furthermore, the Company shall have a first degree
pledge right on all the Shares (other than Shares which were fully paid)
registered in the name of any Shareholder to secure the payment of moneys which
are due from him or from his property, whether with respect to his own debts or
debts jointly with others. The said pledge shall also apply to dividends,
declared from time to time, with respect to these Shares. |
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| |
12.2. |
For
purposes of the realization of any such pledge and or lien, the Board of
Directors is entitled to sell the Shares which are the subject of the pledge or
lien, or any part of them, as it deems fit. No sale, as aforesaid, shall be
carried out, until the date fixed for the payment has passed and a notice in
writing was transferred to same Shareholder with respect to the intention of
the Company to sell them, on condition that the amounts were not paid within
fourteen days after the notice. |
| |
12.3. |
The
proceeds of any such sale, after deduction for the payment of the sale
expenses, shall serve for the covering of the debts or obligations of said
Shareholder, and the balance (if any) shall be paid to him. |
| |
12.4. |
In
the event that a sale of Shares was carried out pursuant to the realization of
a pledge or a lien, pursuant to the presumptive authority conferred above, the
Board of Directors is entitled to register such Shares in the Shareholder
Register in favor of the buyer, and the buyer shall not be under the obligation
to examine the fitness of such actions or the manner in which the purchase
price paid for such Shares was used. After the said Shares are registered in
the Shareholder Register in favor of the buyer, no person shall have the right
to object to the validity of the sale. |
| 13. |
Changes
in the Share Capital |
| |
The
General Meeting is entitled to take any of the following actions at all times, so long as
the resolution of the General Meeting is adopted by a Special Majority. |
| |
13.1. |
Increasing
the Share Capital |
| |
To
increase the share capital of the Company, regardless of whether all the Shares
registered at such a time were issued or not. The increased share capital shall be
divided into Shares having ordinary rights or preference rights or deferred rights or
other special rights (subject to the special rights of an existing class of Shares) or
subject to conditions and restrictions with respect to entitlement to dividend, return of
capital, voting or other conditions, as may be instructed by the General Meeting in a
resolution with respect to the increase of the share capital, and in the absence of a
special provision, according to the terms determined by the Board of Directors. |
| |
To
divide the share capital of the Company into various classes of Shares, and to set and
change the rights attaching to each class of Shares, according to the conditions
specified below: |
| |
13.2.1. |
So
long as it was not otherwise set in the Share allotment conditions, the
rights of any class may be changed pursuant to a resolution of the General
Meeting of the Shareholders of each class of Shares, separately, or upon
the written consent of all the Shareholders of all classes. |
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| |
13.2.2. |
The
rights conferred on the holders of Shares of a certain class shall not be
deemed to have been changed as a result of the creation or allotment of
other Shares having identical rights, unless it was otherwise stipulated
in the allotment conditions of said Shares. |
| |
13.3. |
Amalgamation
and Redivision of the Share Capital |
| |
To
amalgamate and redivide the share capital of the Company, entirely or partially, into
Shares having a higher or lesser par value than that stated in these Articles of
Association. In the event that in consequence of such amalgamation, there are
Shareholders left with fractions of Shares, the Board of Directors if approved by the
Shareholders at a General Meeting in adopting the resolution for amalgamation of the
capital, may agree as follows: |
| |
13.3.1. |
To
sell the total of all the fractional shares and to appoint a trustee for this
purpose, in whose name Share Certificates representing the fractions shall
be issued, who will sell them, with the proceeds received after the
deduction of commissions and expenses to be distributed to those entitled.
The Board of Directors shall be entitled to decide that Shareholders who
are entitled to proceeds which are below an amount determined by it, shall
not receive the proceeds of the sale of the fractional shares, and their
share in the proceeds shall be distributed among the Shareholders who are
entitled to proceeds, in an amount greater than the amount that was
determined, relative to the proceeds to which they are entitled; |
| |
13.3.2. |
To
allot to any Shareholder, who is left with a fractional Share following the
amalgamation, Shares of the class of Shares prior to the amalgamation,
which are fully paid, in such a number, the amalgamation of which together
with the fractional Share shall complete a whole Share, and an allotment
as stated shall be viewed as valid shortly before the amalgamation; |
| |
13.3.3. |
To
determine that Shareholders shall not be entitled to receive a Share in
exchange for a fractional Share resulting from the amalgamation of a half
or smaller fraction of the number of Shares, whose amalgamation creates a
single Share, and they shall be entitled to receive a whole Share in
exchange for a fractional Share, resulting from the amalgamation of more
than a half of the number of Shares, whose amalgamation creates a whole
Share. |
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| |
In
the event that an action pursuant to Articles 13.3.2 or 13.3.3 above requires the
allotment of additional Shares, their payment shall be effected in a manner similar to
that applicable the payment of Bonus Shares. An amalgamation and redivision, as
aforesaid, shall not be regarded as a change in the rights attaching to the Shares which
are the subject of the amalgamation and redivision. |
| |
13.4. |
Cancellation
of Unissued Share Capital |
| |
To
cancel registered share capital which has not yet been allotted, so long as the Company
is not under an obligation to allot these Shares. |
| |
13.5. |
The
Division of the Share Capital |
| |
To
divide the share capital of the Company, entirely or partially, into Shares having a
lower par value than those stated in these Articles of Association, by way of dividing
the Shares of the Company at such a time, entirely or partially. |
| |
13.6. |
The
provisions specified in this Article 13 shall also apply to other equity
Securities of the Company, mutatis mutandis. |
Chapter Three –
General Meetings
| 14. |
The
Authority of the General Meeting |
| |
14.1. |
Subjects
within the authority of the General Meeting |
| |
The
following matters shall require the approval of the General Meeting: |
| |
14.1.1. |
Changes
in the Articles of Association, if adopted by a Special Majority. |
| |
14.1.2. |
The
exercise of the authority of the Board of Directors, if resolved by a
Special Majority that the Board of Directors is incapable of exercising
its authority, and that the exercise of any of its authority is essential
to the orderly management of the Company. |
| |
14.1.3. |
The
appointment or reappointment of the Company’s auditor, the termination
or non-renewal of his service, and to the extent required by Law and not
delegated to the Board of Directors, the determination of his fee. |
| |
14.1.4. |
The
appointment of Directors, including external Directors. |
| |
14.1.5. |
To
the extent required by the provisions of Section 255 of the Companies Law,
the approval of actions and transactions with interested parties and also
the approval of an action or a transaction of an officer which might
constitute a breach of the duty of loyalty. |
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| |
14.1.6. |
Changes
in the share capital of the Company, if adopted by a Special Majority as
set forth in Article 13 above. |
| |
14.1.7. |
A
merger of the Company, as defined in the Companies Law. |
| |
14.1.8. |
Changes
in the objectives of the Company as set forth in Article 4 above, if
adopted by a Special Majority. |
| |
14.1.9. |
Changes
in the name of the Company, if adopted by a Special Majority. |
| |
14.1.10. |
Liquidation,
if adopted by a Special Majority. |
| |
14.1.11. |
Settlements
or Arrangements pursuant to Section 233 of the Companies Ordinance. |
| |
14.1.12. |
Any
other matters which applicable Law requires to be dealt with at General
Meetings of the Company. |
| |
14.2. |
The
authority of the General Meeting to transfer authorities between corporate
organs. |
| |
The
General Meeting, by a Special Majority, may assume the authority which is given to
another corporate organ, and may transfer the authority which is given to the General
Manager to the Board of Directors. |
| |
The
taking or transferring of authorities, as aforesaid, shall be with regard to a specific
issue or for a specific period of time, all as stated in the resolution of the General
Meeting. |
| 15. |
Kinds
of General Meetings |
| |
A
General Meeting shall be convened at least once a year, within fifteen months of the last
general meeting. The meeting shall be held at the registered offices of the Company,
unless otherwise determined by the Board of Directors. These General Meetings shall be
referred to as “Annual Meetings”. |
| |
15.1.1. |
An
Annual Meeting shall be convened to approvediscuss the following: |
| |
(One) |
The
Financial Statements and the Report of the Board of Directors, as of
December 31st of the calendar year preceding the year of the annual
meeting. |
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| |
(Two) |
The
Report of the Board of Directors with respect to the fee paid to the
Company’s auditor. |
| |
15.1.2. |
The
Annual Meeting shall be convened to adopt resolutions on the following
matters: |
| |
(One) |
The
appointment of Directors and the termination of their office in accordance
with Article 23 below. |
| |
(Two) |
The
appointment of an auditor or the renewal of his office, subject to the
provisions of Article 29 below. |
| |
15.1.3. |
The
Annual Meeting may discuss, and decide upon, any matter on the agenda of
such meeting. |
| |
15.2. |
Extraordinary
Meetings |
| |
General
Meetings of the Shareholders of the Company which are not convened in accordance with the
provisions of Article 15.1 above, shall be referred to as “Extraordinary Meetings”.
An Extraordinary Meeting shall discuss, and decide upon, any matter (other than those
referred to in all matters which are not discussed and decided in the Annual Meeting,
andArticle 15.1.1 or 15.1.2), for which the Extraordinary Meeting was convened. |
| |
The
provisions of these Articles of Association with respect to General Meetings shall apply,
mutatis mutandis, to meetings of a class of Shareholders of the Company. |
| 16. |
The
Holding of General Meetings |
| |
16.1. |
The
Convening of the Annual Meeting |
| |
The
Board of Directors shall convene Annual Meetings in accordance with the provisions of
Article 15.1 above. |
| |
16.2. |
The
Convening of an Extraordinary Meeting |
| |
The
Board of Directors may convene an Extraordinary Meeting, as it decides, provided,
however, that it shall be obligated to convene an Extraordinary Meeting upon the demand
of one of the following: |
| |
16.2.1. |
Any
two Directors or a quarter of the Directors, whichever is lower; or |
| |
16.2.2. |
any
one or more Shareholders, holding alone or together at least 4.99% of the
issued share capital of the Company. |
C - 18
| |
16.3. |
Date
of Convening an Extraordinary Meeting Upon Demand |
| |
The
Board of Directors, which is required to convene a general meeting in accordance with
Article 16.2 above shall announce the convening of the General Meeting within twenty-one
(21) days from the receipt of a demand in that respect, and the date fixed for the
meeting shall not be more than thirty-five (35) days from the publication date of the
announcement of the General Meeting. |
| |
In
the event that the Board of Directors shall not have convened an Extraordinary Meeting,
as required in this Article, those demanding its convening or half of the Shareholders
which demand it subject to Article 16.2.2, are entitled to convene the meeting
themselves, so long as it is convened within three months from the date on which the
demand was filed, and it shall be convened, inasmuch as possible, in the same manner by
which meetings are convened by the Board of Directors. In the event that a General
Meeting is convened as aforesaid, the Company shall bear the reasonable costs and
expenses incurred by those demanding it. |
| |
16.4. |
Notice
of Convening a General Meeting |
| |
Notice
of a General Meeting shall be sent to each registered Shareholder of the Company as of
the Record Date set by the Board of Directors for that meeting, within five (5) days
after that Record Date, unless a different notice time is required by Law and cannot be
altered or waived in the Company’s Articles of Association. |
| |
A
General Meeting may be convened following a shorter notice period, if the written consent
of all the Shareholders who are entitled at such time to receive notices has been
obtained. A waiver by a Shareholder can also be made in writing after the fact and even
after the convening of the General Meeting. |
| |
16.5. |
Contents
of the Notice |
| |
Subject
to the provisions of any Law, a notice with respect to a general meeting shall specify
the agenda of the meeting, the location, the proposed resolutions and also the
arrangements for voting by means of a deed of voting or a deed of authorization, and the
requirements of Article 10A.2.1. |
| |
Any
notice to be sent to the Shareholders shall also include a draft of the proposed
resolutions or a concise description of their particulars. |
| 17. |
The
Agenda of General Meetings |
| |
17.1. |
The
agenda of the General Meeting shall be determined by the Board of Directors and
shall also include issues for which an Extraordinary Meeting is being convened
in accordance with Article 15.2 above, or demanded in accordance with Article
17.2 below. |
C - 19
| |
17.2. |
One
or more Shareholders holding alone or in the aggregate, 4.99% or more of the
share capital of the Company may request that the Board of Directors include an
issue on the agenda of a general meeting to be convened in the future. The
Board of Directors shall incorporate such issue on the agenda of such a future
general meeting, provided that the Board of Directors determines, in its
discretion, such issue is suitable to be discussed in the General Meeting of
the Company. |
| |
17.3. |
The
General Meeting shall only adopt resolutions on issues which are on its agenda. |
| |
17.4. |
So
long as it is not otherwise prescribed by Law, the General Meeting is entitled
to accept or reject a proposed resolution which is on the agenda of the General
Meeting, the draft or concise description of the particulars of which were
published by the Company, including slight alterations, however, it is not
entitled to take a resolution, which is materially different than the proposed
resolution. |
| 18. |
Discussions
in General Meetings |
| |
No
discussion shall be held in the General Meeting unless a lawful quorum is present.
Subject to the requirements of the applicable Law in force at the time these Articles of
Association come into force, the rules of the Nasdaq National Market, the London Stock
Exchange and any other exchange on which the Company’s securities are or may become
quoted or listed, and the provisions of these Articles, any two Shareholders, present by
themselves or by means of a proxy, or who have delivered to the Company a Deed of Voting
indicating their manner of voting, and who hold or represent at least one-third of the
voting rights in the Company shall constitute a lawful quorum. A Shareholder or his
proxy, who may also serve as a proxy for other Shareholders, shall be regarded as two
Shareholders or more, in accordance with the number of Shareholders he is representing. |
| |
18.2. |
Deferral
of the General Meeting in the Absence of Lawful Quorum |
| |
In
the event that a legal quorum is not present after the lapsing of 30 minutes from the
time specified in the convening notice for the commencement of the meeting, the meeting
may be adjourned to the same day of the following week (or the first business day
thereafter) at the same time and venue, or to another time and venue, as determined by
the Board of Directors in a notice to the Shareholders, and the adjourned meeting shall
discuss the same issues for which the original meeting was convened. If at the adjourned
meeting, a legal quorum is not present at the time specified for the commencement of the
meeting, then and in such event one or more Shareholders holding or representing in the
aggregate at least 10% of the voting rights in the Company shall be deemed to form a
proper quorum, subject to the provisions of Section 79 of the Companies Law. |
C - 20
| |
18.3. |
The
Chairman of the General Meeting |
| |
The
chairman of the Board of Directors (if appointed) shall preside at each General Meeting.
In the absence of the chairman, or if he fails to appear at the meeting within 15 minutes
after the time fixed for the meeting, the Shareholders present at the meeting shall
choose any one of the Directors of the Company as the chairman, and if there is no
Director present at the meeting, one of the Shareholders shall be chosen to preside over
the meeting. The chairman shall not have an additional vote or casting vote. |
| |
Upon
adoption of a resolution at a General Meeting at which a lawful quorum is present, the
chairman may and upon demand of the General Meeting shall adjourn the General Meeting
from time to time and from venue to venue, as the meeting may decide (for the purpose of
this Article: an “Adjourned Meeting”). In the event that a meeting is adjourned
for fourteen days or more, a notice of the Adjourned Meeting shall be given in the same
manner as the notice of the original meeting. With the exception of the aforesaid, a
Shareholder shall not be entitled to receive notice of an Adjourned Meeting or of the
issues which are to be discussed in the Adjourned Meeting. The Adjourned Meeting shall
only discuss issues that could have been discussed at the General Meeting which was
adjourned. The provisions of Articles 17.1, 17.2 and 17.3 of the Articles of Association
shall apply to an Adjourned Meeting. |
| 19. |
Voting
of the Shareholders |
| |
In
any General Meeting, a proposed resolution shall be adopted if it receives an Ordinary
Majority, or any other majority of votes set by Law or in accordance with these Articles
of Association. For the avoidance of doubt, any proposed resolution requiring a Special
Majority under the Companies Ordinance shall continue to require the same Special
Majority even after the effective date of the Companies Law. |
| |
In
the event of a tie vote, the resolution shall be deemed rejected. |
| |
19.2.1. |
The
checking of the majority shall be carried out by means of a count of votes,
at which each Shareholder shall be entitled to vote in each case in
accordance with rights fixed for such Shares, subject to Articles 10A
above and Article 44 below. A Shareholder shall be entitled to a single
vote for each share he holds which is fully paid or that Calls of Payment
in respect of which was fully paid. |
C - 21
| |
19.2.2. |
The
announcement of the chairman that a resolution in the General Meeting was
adopted or rejected, whether unanimously or with a specific majority,
shall be regarded as prima facie evidence thereof. |
| |
19.3. |
Written
Resolutions |
| |
Subject
to the provisions of applicable Law, a written resolution signed by all of the
Shareholders of the Company holding Shares which entitle their holders to participate in
General Meetings of the Company and vote therein, or of the same class of Shares to which
the resolution refers, as the case may be, shall be regarded as a valid resolution for
all purposes, and as a resolution adopted at a General Meeting of the Company or at a
class meeting of the relevant class of Shares, as the case may be, which was properly
summoned and convened, for the purpose of adopting such a resolution. |
| |
Such
a resolution could be stated in several copies of the same document, each of them signed
by one Shareholder or by several Shareholders. |
| |
19.4. |
Record
Date For Participation and Voting |
| |
The
Record Date shall be set by the Board of Directors, or by a person or persons authorized
by the Board of Directors, in accordance with applicable Law. |
| |
19.5. |
A
Right to Participate and Vote |
| |
A
Shareholder shall not be entitled to participate and vote in any General Meeting or to be
counted among those present, so long as (i) he owes the Company a payment which was
called for the Shares held by him, unless the allotment conditions of the Shares provide
otherwise, and/or (ii) his holdings are registered in the Shareholder Register together
with a notation that such holdings have been classified as Exceptional Holdings, as
defined in Article 10A or Affected Shares, as defined in Article 44. |
| |
19.6. |
Personal
Interest in Resolutions |
| |
A
Shareholder seeking to vote with respect to a resolution which requires that the majority
for its adoption include at least a third of the votes of all those not having a personal
interest (as defined in the Companies Law) in the resolution shall notify the registered
office of the Company at least two business days prior to the date of the General
Meeting, whether he has a personal interest in the resolution or not, as a condition for
his right to vote and be counted with respect to such resolution. |
| |
A
Shareholder voting on a resolution, as aforesaid, by means of a Deed of Vote, may include
his notice with regard to his personal interest on the Deed of Vote. |
C - 22
| |
19.7. |
The
Disqualification of Deeds of Vote |
| |
Subject
to the provisions of applicable Law, the corporate secretary of the Company may, in his
discretion, disqualify Deeds of Vote and Deeds of Authorization and so notify the
Shareholder who submitted a Deed of Vote or Deeds of Authorization in the following cases: |
| |
19.7.1. |
If
there is a reasonable suspicion that they are forged; |
| |
19.7.2. |
If
there is a reasonable suspicion that they are falsified, or given with
respect to Shares for which one or more Deeds of Vote or deeds of
authorization have been given and not withdrawn; or |
| |
19.7.3. |
If
there is no note on the Deed of Vote or Deed of Authorization as to whether
or not his holding in the Company or his vote require the consent of the
Minister of Communications pursuant to Sections 21 and 23 to the License. |
| |
19.7.4. |
With
respect to Deeds of Vote: |
| |
(One) |
If
more than one choice is marked for the same resolution; or |
| |
(Two) |
With
respect to resolutions which require that the majority for their adoption
includes a third of the votes of those not having a personal interest in
the approval of the resolution, where it was not marked whether the
relevant Shareholder has a personal interest or not, as aforesaid. |
| |
Any
Shareholder shall be entitled to appeal on any such disqualification to the Board of
Directors at least one business day prior to the relevant General Meeting. |
| |
19.8. |
The
Voting of a Person without Legal Capacity |
| |
A
person without legal capacity is entitled to vote only by means of a trustee or a legal
custodian. |
| |
19.9. |
The
Voting of Joint Holders of a Share |
| |
Where
two or more Shareholders are registered joint holders of a Share, only the first named
joint holder shall vote, without taking into account the other registered joint holders
of the Share. For this purpose, the first named joint holder shall be the person whose
name is registered first in the Shareholder Register. |
| |
19.10. |
Minutes
of the General Meeting |
| |
The
chairman of the General Meeting shall cause that the minutes of each General Meeting
shall be properly maintained and shall include the following: |
C - 23
| |
19.10.1. |
The
name of each Shareholder present in person, by Deed of Vote or by proxy and
the number of Shares held or represented by him; |
| |
19.10.2. |
The
principal issues of the discussion, all the resolutions which were adopted
or rejected at the General Meeting, and if adopted – according to
what majority. |
| 20. |
The
Appointment of a Proxy |
| |
20.1. |
Voting
by Means of a Proxy |
| |
A
Shareholder registered in the Shareholder Register is entitled to appoint by deed of
authorization a proxy to participate and vote in his stead, whether at a certain General
Meeting or generally at General Meetings of the Company, whether personally or by means
of a Deed of Vote, so long as the deed of authorization with respect to the appointment
of the proxy was delivered to the Company at least two Business Days prior to the date of
the General Meeting. |
| |
In
the event that the deed of authorization is not limited to a certain General Meeting,
then the deed of authorization, which was deposited prior to a certain General Meeting,
shall also be good for other General Meetings thereafter. This Article 20 shall also
apply to a Shareholder which is a corporation, appointing a person to participate and
vote in a General Meeting in its stead. A proxy is not required to be a Shareholder of
the Company. |
| |
20.2. |
The
Draft of the Deed of Authorization |
| |
The
deed of authorization shall be signed by the Shareholder and shall be in or substantially
in the form specified below or any such other form acceptable to the Board of Directors
of the Company. The corporate secretary, in his discretion, may accept a deed of
authorization differing from that set forth below provided the changes are immaterial. |
| |
The
corporate secretary shall only accept either an original deed of authorization, or a copy
of the deed of authorization which is certified by a lawyer having an Israeli license or
a notary. |
Deed of Authorization
| To: |
Partner
Communications Company Ltd. |
| Attn.: |
Corporate
Secretary |
Re:
[Annual/Extraordinary] General Meeting of the Company
to be Held On
__________________
C - 24
I,
the undersigned _________________, Identification No. / Registration No. _____________, of
________________, being the registered holder of ________ (*) Shares [Ordinary Shares
having a par value of NIS 0.01, each], hereby authorize ___________, Identification No.
___________ (**) and/or ___________, Identification No. ___________ and/or ___________,
Identification No. ___________ to participate and vote in my stead and on my behalf at the
referenced meeting and in any adjournment of the referenced meeting of the Company / at
any General Meeting of the Company, until I shall otherwise notify you .
| (*) |
A
Shareholder is entitled to give several deeds of authorization, each of which
refers to a different quantity of Shares of the Company held by him,
so long as he shall not give deeds of authorization with respect to
an aggregate number of Shares exceeding the total number he holds. |
| (**) |
In
the event that the proxy does not hold an Israeli Identification number,
indicate a passport number, if any, and the name of the country which
issued the passport. |
| |
20.3. |
A
vote in accordance with a deed of authorization shall be lawful even if prior
to it, the appointer died or became incapacitated or bankrupt, or if it is a
corporation – was liquidated, or if he cancelled the deed of authorization
or transferred the Share in respect of which it was given, unless a notice in
writing was received at the Office of the Company prior to the meeting with
respect to the occurrence of such an event. |
| 21. |
Deed
of Vote, Voting Via the Internet |
| |
21.1. |
A
Shareholder may vote in a General Meeting by means of a Deed of Vote (ktav
hatba’ah) on any issue for which voting by Deed of Vote is required to
be offered under applicable Law and on any other issue for which the Board of
Directors has approved voting by Deed of Vote, either generally or
specifically. The form of the Deed of Vote shall be set by the corporate
secretary or any one so authorized by the Board of Directors. |
| |
21.2. |
The
Board of Directors may authorize Shareholder voting in a General Meeting via
the Internet, subject to any applicable Law. |
Chapter Four –
The Board of Directors
| 22. |
The
Authority of the Board of Directors |
| |
22.1. |
The
authority of the Board of Directors is as specified both in the Law and in
the provisions of these Articles of Association. |
| |
22.2. |
Signature
Authority and Powers of Attorney |
C - 25
| |
22.2.1. |
The
Board of Directors shall determine the person(s) with authority to sign for
and on behalf of the Company with respect to various issues. The signature
of such person(s), appointed from time to time by the Board of Directors,
whether generally or for a specific issue, whether alone or together with
others, or together with the seal or the stamp of the Company or its
printed name, shall bind the Company, subject to the terms and conditions
set by the Board of Directors. |
| |
22.2.2. |
The
Board of Directors may set separate signature authorities with respect to
different issues and different amounts. |
| |
22.2.3. |
The
Board of Directors may, from time to time, authorize any person to be the
representative of the Company with respect to those objectives and subject
to those conditions and for that time period, as the Board of Directors
deems fit. The Board of Directors may also grant any representative the
authority to delegate any or all of the authorities, powers and discretion
given to the Board of Directors. |
C - 26
| |
22.3. |
The
Registered Office of the Company |
| |
The
Board of Directors shall fix the location of the Office of the Company. |
| 23. |
The
Appointment of Directors and the Termination of Their Office |
| |
23.1. |
The
Number of Directors |
| |
The
number of Directors in the Company shall not be less than seven (7) or more than
seventeen (17). |
| |
23.2. |
The
Identity of a Director |
| |
23.2.1. |
A
member of the Board of Directors may hold another position with the Company. |
| |
23.2.2. |
A
corporation may serve as a Director in the Company, subject to the provisions
of Article 23.6 below. |
| |
23.2.3. |
For
as long as any individual or an entity which is an Interested Party in the
Company is also an Interested Party in Cellcom (Israel) Ltd. (hereinafter
“Cellcom”), such Interested Party or an Office Holder of an
Interested Party in Cellcom or an Office Holder of any entity controlled
by an Interested Party in Cellcom (other than Elron Electronic Industries
Ltd (“Elron”) or an entity controlled by Elron) will not serve
as an Office Holder of the Company, and no Interested Party in Cellcom or
any entity controlled by such Interested Party, may appoint more than two
Directors to the Board of Directors of the Company. For the purposes of
this Article, the terms “control”, “Interested Party” and
“Office Holder” shall bear the same meaning as in, and shall be
interpreted in accordance with, the License. |
| |
23.2.4. |
The
Board of Directors shall include independent and/or external Directors
required to comply with the applicable requirements of any Law, the Nasdaq
Stock Market, the London Stock Exchange and any other investment exchange
on which the securities of the Company are or may become quoted or listed.
The requirements of the Companies Law applicable to an external Director (Dahatz)
shall prevail over the provisions of these Articles of Association to the
extent these Articles of Associations are inconsistent with the Companies
Law, and shall apply to the extent these Articles of Associations are
silent. |
C - 27
| |
23.2.5. |
At
least 10% of the members of the Board of Directors of the Company shall be
comprised of Qualified Israeli Directors. Notwithstanding the above, if
the board is comprised of up to 14 members, one Qualified Israeli Director
shall be sufficient, and if the board is comprised of between 15 and 24
members, two Qualified Israeli Directors shall be sufficient. |
| |
23.2.6. |
Notwithstanding
any other provision of these Articles, a Qualified Israeli Director shall
be appointed as a member of the Board of Directors, and may be removed
from such office, only upon written notice to the Company Secretary of his
or her appointment or removal by the Founding Israeli Shareholders holding
Minimum Israeli Holding Shares. For purposes of this section, a notice
signed by at least two of the Founding Israeli Shareholders who are the
record holders of at least 50% of Minimum Israeli Holding Shares shall be
deemed to be sufficient notice on behalf of all holders of Minimum Israeli
Holding Shares. |
| |
23.3. |
The
Election of Directors and their Terms of Office |
| |
23.3.1. |
The
Directors shall be elected at each Annual Meeting and shall serve in office
until the close of the next Annual Meeting, unless their office becomes
vacant earlier in accordance with the provisions of these Articles of
Association. Each Director of the Company shall be elected by an Ordinary
Majority at the Annual Meeting; provided, however, that external Directors
shall be elected in accordance with applicable law and/or any relevant
stock exchange rule applicable to the Company. The elected Directors shall
commence their terms from the close of the Annual Meeting at which they
are elected, unless a later date is stated in the resolution with respect
to their appointment. Election of Directors shall be not conducted by
separate vote on each candidate, unless so determined by the Board of
Directors. |
| |
23.3.2. |
In
each Annual Meeting, the Directors that were elected in the previous Annual
Meeting, and thereafter, in any Extraordinary Meeting shall be deemed to
have resigned from their office. A resigning Director may be reelected. |
| |
23.3.3. |
Notwithstanding
the other provisions of these Articles of Association and without
derogating from Article 23.4, an Extraordinary Meeting of the Company may
elect any person as a Director, to fill an office which became vacant, or to
serve as an additional member to the then existing Board of Directors, or
to serve as an external Director (Dahatz) or an independent
Director and also in any event in which the number of the members of the
Board of Directors is less than the minimum set in the Articles of
Association provided that the maximum number of Directors permitted under
Article 23.1 is not exceeded. Any Director elected in such manner
(excluding an external Director (Dahatz) shall serve in office
until the coming Annual Meeting, unless his office becomes vacant earlier
in accordance with the provisions of these Articles of Association and may
be reelected. |
C - 28
| |
23.3.4. |
An
elected external Director (Dahatz) shall commence his term from the
close of the General Meeting at which he is elected, unless a later date
of, and shall serve for the period is stated in, the resolution of the
General Meeting at which he was elected, with respect to his appointment,
and shall serve for the period in accordance with the provisions of the
Companies Law, notwithstanding Article 23.3 above, unless his office
becomes vacant earlier in accordance with the provisions of the Companies
Law. A General Meeting may reelect an external Director (Dahatz)
for additional term(s) as permitted by the Companies Law. |
| |
23.4. |
The
election of Directors by the Board of Directors |
| |
The
Board of Directors shall have the right, at all times, upon approval of at least 75%a
simple majority of the Directors of the Company, to elect any person as a Director, to
fill an office which became vacant, or to serve as an additional member to the then
existing Board of Directors provided that the maximum number of Directors permitted under
Article 23.1 is not exceeded. Any Director elected in such manner shall serve in office
until the coming Annual Meeting and may be reelected. |
| |
Any
Director may, from time to time, appoint for himself an alternate Director (hereinafter:
the “Alternate Director”), dismiss such Alternate Director and also appoint
another Alternate Director instead of any Alternate Director, whose office becomes
vacant, due to whatever cause, whether for a certain meeting or generally. Anyone who is
not qualified to be appointed as a Director and also anyone serving as a Director or as
an existing Alternate Director shall not serve as an Alternate Director. |
| |
23.6. |
Representatives
of a Director that is a Corporation |
| |
A
Director that is a corporation shall appoint an individual, qualified to be appointed as
a Director in the Company, in order to serve on its behalf, either generally or for a
certain meeting, or for a certain period of time and the said corporation may also
dismiss that individual and appoint another in his stead (hereinafter: “Representatives
of a Director”). |
C - 29
| |
23.7. |
Manner
of Appointment or Dismissal of an Alternate Director or a Representative of a
Director that is a Corporation |
| |
Any
appointment or dismissal of Representatives of Directors, when such Directors are
corporations, or of Alternate Directors, shall be made by means of a notice in writing to
the corporate secretary, signed by the appointing or dismissing body and shall become
valid upon the date indicated in the appointment or dismissal notice or upon the date of
its delivery to the corporate secretary, whichever is the later. |
| |
23.8. |
Miscellaneous
Provisions with Respect to Alternate Directors and Representatives of
Directors that are Corporations. |
| |
23.8.1. |
Any
person, whether he is a Director or not, may serve as the representative of
a Director, and any one person may serve as the representative of several
Directors. |
| |
23.8.2. |
The
Representative of a Director – in addition to his own vote, if he is
serving as a Director – shall have a number of votes corresponding to
the number of Directors represented by him. |
| |
23.8.3. |
An
Alternate Director and the Representative of a Director shall have all the
authority of the Director for whom he is serving as an Alternate Director
or as a representative, with the exception of the authority to vote in
meetings at which the Director is present in person. |
| |
23.8.4. |
The
office of an Alternate Director or a representative of a Director shall
automatically become vacant, if the office of the Director for whom he is
serving as an Alternate Director or as a representative becomes vacant. |
| |
23.9. |
Termination
of the Term of a Director |
| |
The
term of a Director shall be terminated in any of the following cases: |
| |
23.9.1. |
If
he resigns from his office by way of a signed letter, filed with the
corporate secretary at the Company’s Office; |
| |
23.9.2. |
If
he is declared bankrupt or if he reaches a settlement with his creditors
within the framework of bankruptcy procedures; |
| |
23.9.3. |
If
he is declared by an appropriate court to be incapacitated; |
| |
23.9.4. |
Upon
his death and, in the event of a corporation, if a resolution has been
adopted for its voluntary liquidation or a liquidation order has been
issued to it; |
C - 30
| |
23.9.5. |
If
he is removed from his office by way of a resolution, adopted by the General
Meeting of the Company, even prior to the completion of his term of
office; |
| |
23.9.6. |
If
he is convicted of a crime, as stated in Section 232 of the Companies Law; |
| |
23.9.7. |
If
his term is terminated by the Board of Directors in accordance with the
provisions of Section 231 of the Companies Law; or |
| |
23.9.8 |
If
his term is terminated by the Board of Directors in case the Board of Directors concludes
that the office of such dDirector is in violation to the provisions of the License or any
other telecommunications license granted to the Company or to any of its subsidaries or
to any other entity it controls.” |
| |
23.10. |
The
Implications on the Board of Directors of the Termination of the Term of a
Director. |
| |
In
the event that an office of a Director becomes vacant, the remaining Directors are
entitled to continue operating, so long as their number has not decreased below the
minimum number of Directors set forth in Article 23.1. |
| |
In
the event that the number of Directors decreased below that minimum number, the remaining
Directors shall be entitled to act solely for the convening of a General Meeting of the
Company for the purpose of electing additional Directors to the Board of Directors. |
| |
23.11. |
Compensation of
Members of the Board of Directors |
| |
Members
of the Board of Directors who do not hold other positions in the Company and who are not
external Directors shall not receive any compensation from the Company, unless such
compensation is approved by the General Meeting and according to the amount determined by
the General Meeting, subject to the provisions of the Law. |
| |
The
compensation of the Directors may be fixed, as an all-inclusive payment or as payment for
participation in meetings or in any combination thereof. |
| |
The
Company may reimburse expenses incurred by a Director in connection with the performance
of his office, to the extent provided in a resolution of the Board of Directors. |
| |
24.1. |
Convening
Meetings of the Board of Directors |
C - 31
| |
24.1.1. |
The
chairman of the Board of Directors may convene a meeting of the Board of
Directors at any time. |
| |
24.1.2. |
The
chairman of the Board of Directors shall convene a meeting of the Board of
Directors at least four times a year, in a manner allowing the Company to
fulfil the provisions of the Law with respect to the publication of
Financial Statements and reporting to the public. |
| |
24.1.3. |
The
chairman of the Board of Directors shall convene a meeting of the Board of
Directors on a specific issue if requested by at least two Directors or
one Director, if he is an external Director, within no more than 14 days
from the date of the request. |
| |
24.1.4. |
The
chairman of the Board of Directors shall act forthwith for the convening of
a meeting of the Board of Directors, within 14 days from the time that a
Director in the Company has informed him of a matter related to the
Company in which there is an apparent violation of the Law or a breach of
proper management of the business, or from the time that the auditor of
the Company has reported to him that he had become aware of material flaws
in the accounting oversight of the Company. |
| |
24.1.5. |
In
the event that a notice or a report of the General Manager requires an action
of the Board of Directors, the chairman of the Board of Directors shall
forthwith convene a meeting of the Board of Directors, which should be
held within 14 days from the date of the notice or the report. |
| |
24.2. |
Convening
of a Meeting of the Board of Directors |
| |
24.2.1. |
Any
notice with respect to a meeting of the Board of Directors may be given in
writing, so long as the notice is given at least 14 days prior to the date
fixed for the meeting, unless all the members of the Board of Directors or
their Alternate Directors or their representatives agree on a shorter time
period. A notice, as stated, shall be delivered in writing or transmitted
via facsimile or E-mail or through another means of communication, to the
address or facsimile number or to the E-mail address or to an address
where messages can be delivered through other means of communication, as
the case may be, as the Director informed the corporate secretary, upon
his appointment, or by means of a written notice to the corporate
secretary thereafter. |
C - 32
| |
A
notice, which was delivered or transmitted, as provided in this Article, shall be deemed
to be personally delivered to the Director on its delivery date. |
| |
24.2.2. |
In
the event that a Director appointed an Alternate Director or a
representative, the notice shall be delivered to the Alternate Director or
the representative, unless the Director instructed that the notice should
be delivered to him as well. |
| |
24.2.3. |
The
notice shall include the venue, date and time of the meeting of the Board of
Directors, arrangements with respect to the manner of management of the
meeting (in cases where telecommunications are used), the details of the
issues on its agenda and any other material that the chairman of the Board
of Directors requests be attached to the summoning notice with respect to
the meeting. |
| |
24.3. |
The
Agenda of Meetings of Board of Directors |
| |
The
agenda of meetings of the Board of Directors shall be determined by the chairman of the
Board of Directors and shall include the following issues: |
| |
24.3.1. |
Issues
determined by the chairman of the Board of Directors. |
| |
24.3.2. |
Issues
for which the meeting is convened in accordance with Article 24.1 above. |
| |
24.3.3. |
Any
issue requested by a Director or by the General Manager within a reasonable
time prior to the date of the meeting of the Board of Directors (taking
into account the nature of the issue). |
| |
The
quorum for meetings of the Board of Directors shall be a majority of the Directors, which
must include one external Director. |
| |
24.5. |
Conducting
a Meeting Through Means of Communication |
| |
The
Board of Directors may conduct a meeting of the Board of Directors through the use of any
means of communications, provided all of the participating Directors can hear each other
simultaneously. |
| |
24.6. |
Voting
in the Board of Directors |
| |
Subject
to Article 23.4 and Article 44, Issues presented at meetings of the Board of Directors
shall be decided upon by a majority of the votes of the Directors present (or
participating, in the case of a vote through a permitted means of communications) and
voting, subject to the provisions of Article 23.8 above, with respect to Alternate
Directors and representatives of Directors that are corporations. |
C - 33
| |
Each
Director shall have a single vote. |
| |
24.7. |
Written
Resolutions |
| |
A
written resolution signed by all the Directors shall be deemed as a resolution lawfully
adopted at a meeting of the Board of Directors. Such a resolution may be made in several
copies of the same Document, each of them signed by one Director or by several Directors.
Such a resolution may be adopted by signature of only a portion of the Directors, if all
of the Directors who have not signed the resolution were not entitled to participate in
the discussion and to vote on such resolution in accordance with any Law whatsoever, so
long as they confirm in writing that they are aware of the intention to adopt such a
resolution. |
| |
24.8. |
Resolutions
Approved by Means of Communications |
| |
A
resolution approved by use of a means of communications by the Directors shall be deemed
to be a resolution lawfully adopted at a meeting of the Board of Directors, and the
provisions of Article 24.6 above shall apply to the said resolution. |
| |
24.9. |
The
Validity of Actions of the Directors |
| |
All
actions taken in good faith in a meeting of the Board of Directors or by a committee of
the Board of Directors or by any person acting as a Director shall be valid, even if it
subsequently transpires that there was a flaw in the appointment of such a Director or
person acting as such, or if any of them were disqualified, as if any such person was
lawfully appointed and was qualified to serve as a Director. |
| |
24.10. |
Minutes
of Meetings of the Board of Directors |
| |
The
chairman of the Board of Directors shall cause that the minutes of meetings of the Board
of Directors shall be properly maintained and shall include the following: |
| |
24.10.1. |
Names
of those present and participating at each meeting. |
| |
24.10.2. |
All
the resolutions and particulars of the discussion of said meetings. |
| |
Any
such minutes signed by the chairman of the Board of Directors presiding over that meeting
or by the chairman of the Board of Directors at the following meeting, shall be viewed as
prima facie evidence of the issues recorded in the minutes. |
C - 34
| 25. |
Committees
of the Board of Directors |
| |
25.1. |
Subject
to the provisions of the Companies Law, the Board of Directors may delegate its
authorities or any part of them to committees, as they deem fit, and they may
from time to time cancel the delegation of such an authority. Any such
committee, while utilizing an authority as stated, is obligated to fulfil all
of the instructions given to it from time to time by the Board of Directors. |
| |
25.2. |
Subject
to the provisions of the Companies Law, each committee of the Board of
Directors shall consist of at least two Directors, and it may include members
who are not Directors, with the exception of the audit committee which shall
consist of at least three (3) Directors, and all of the external Directors of
the Company shall be members of it. |
| |
25.3. |
The
provisions with respect to meetings of the Board of Directors shall apply to
the meetings and discussions of each committee of the Board of Directors, with
the appropriate changes, provided that no other terms are set by the Board of
Directors in this matter, and provided that the lawful quorum for the meetings
of the committee, as stated, shall be at least a majority of the members of the
committee, unless otherwise required by Law. |
| 25A. |
Committee
for Security Matters |
| |
25A.1. |
Notwithstanding
any other provision in these Articles, the Board of Directors shall
appoint from among its members who have security clearance and security
compatibility to be determined by the General Security Service (“Directors
with Clearance”) a committee to be designated the “Committee for
Security Matters”. The members of the Committee for Security Matters
shall include at least four (4) Directors with Clearance including at
least one external director. Subject to section 25A.2 below, security
matters shall be considered only in the context of the Committee for
Security Matters. Any decision of, or action by the Committee for Security
Matters shall have the same effect as if it had been made or taken by the
Board of Directors. The Board of Directors shall consider a security
matter only if required pursuant to section 25A.2 below, and subject to
the terms of that section. For purposes of this section 25A, “security
matters” shall be defined in the same manner as defined in the Bezeq
Order (Determination of Essential Service Provided by Bezeq-The Israeli
Telecommunications Company Ltd.), 1997, as of March 9, 2005. |
| |
25A.2. |
Security
matters which the audit committee or board of directors shall be required
to consider in accordance with the mandatory rules of the Companies Law or
other Law applicable to the Company, shall be considered to the extent
necessary only by Directors with Clearance. Other Directors shall not be
entitled to participate in meetings of the audit committee or board of
directors dealing with security matters, or to receive information or
documents related to these matters. A quorum for these meetings shall
include only Directors with Clearance. |
| |
25A.3. |
Any
director or officer of the Company who would otherwise be required to
receive information or participate in meetings by virtue of his or her
position or these Articles or any Law, but who is prevented from doing so
by the provisions of this Article 25A, will be released from any liability
for any claim of breach of duty of care to the Company which results from
her or his inability to receive information or participate in meetings,
and the Company shall indemnify any such director or officer and hold her
or him harmless to the maximum extent permitted by law for any injury or
damage she or he incurs as a result of the inability to receive such
information or participate in such meetings. |
C - 35
| |
25A.4. |
The
shareholders at a general meeting shall not be entitled to assume, delegate,
transfer or exercise any of the authorities granted to any other corporate
body in the Company with respect to security matters. |
| |
25A.5. |
(1)
The Minister of Communications shall be entitled to appoint an observer (the
“Security Observer”) to all meetings of the board of directors
and its committees. The Security Observer shall have the security
clearance and security compatibility to be determined by the General
Security Service. |
| |
(2)
The
Security Observer shall be an employee of the State of Israel qualified to
serve as a director pursuant to Chapter C of the Government Companies Law,
1975. |
|
(3)
In
addition to any other obligations under Law, the Security Observer shall be
bound to preserve the confidentiality of [information relating to] the Company,
except as required to fulfill his responsibilities as an observer. The Security
Observer will not act as an observer or in any other position at a competitor
of the Company, and will avoid a conflict between his position as an observer
and the interests of the Company. The Security Observer shall undertake not to
serve as an observer or officer or director, and not serve in any other
capacity or be employed, directly or indirectly, by any entity competing with
the Company or in a position of conflict of interest with the Company during
the period of his service as the Security Observer and for two years after
termination of such period. |
| |
(4)
Notices
of meetings of the board of directors and its committees, including of the
Committee for Security Matters, shall be delivered to the Security Observer,
and he shall be entitled to participate in each such meeting. |
| |
(5)
The
Security Observer shall have the same right to obtain information from the
Company as that of a Director. If the Company believes that specific
information requested is commercially sensitive and not required by the
Security Observer for fulfillment of his duties, the Company may delay delivery
of the information upon notice to the Security Observer. If the Security
Observer still believes the information is needed for his duties, the matter
shall be brought for decision to the head of the General Security Service. |
| |
(6)
If
the Security Observer believes that the Company has made a decision, or is
about to make a decision, in a security matter, which conflicts with a
provision of the License or section 13 of the Communications Law
(Telecommunications and Broadcasting), 1982 or section 11 of the General
Security Service Law, 2002, he shall promptly notify the Company in writing.
Said notice shall be delivered to the chairman of the board of directors and
chairman of the Committee for Security Matters and shall provide an appropriate
defined period of time, in light of the circumstances, in which the Company
shall be required to correct the violation or change the decision, to the
extent possible.” |
C - 36
| 25B. |
Approval
of Certain Related Party Transactions |
| |
A
transaction of the type described in Section 270(1) of the Companies Law i.e. a
transaction with directors or officers or a transaction in which an officer or a director
has a personal interest, provided that such transactions are in the Company’s
ordinary course of business, are on market terms and are not likely to substantially
influence the profitability of the Company, its assets or its liabilities, may be
approved by the Audit Committee, without the need for Board of Director’s approval,
or by the Board of Directors, subject to any applicable Law and any relevant stock
exchange rule applicable to the Company. |
| 26. |
Chairman
of the Board of Directors |
| |
26.1.1. |
The
Board of Directors shall choose one of its members to serve as the chairman
of the Board of Directors, and shall set in the appointing resolution the
term for his service. |
| |
26.1.2. |
Unless
otherwise provided in the appointing resolution, the chairman of the Board
of Directors shall be chosen each and every calendar year at the first
meeting of the Board of Directors held after the General Meeting in which
Directors were appointed to the Company. |
| |
26.1.3. |
In
the event that the chairman of the Board of Directors ceases to serve as a
Director in the Company, the Board of Directors in its first meeting held
thereafter shall choose one of its members to serve as a new chairman who
will serve in his position for the term set in the appointing resolution,
and if no period is set, until the appointment of a chairman, as provided
in this Article. |
| |
26.1.4. |
In
the event that the chairman of the Board of Directors is absent from a
meeting, the Board of Directors shall choose one of the Directors present
to preside at the meeting. |
| |
26.2.1. |
The
chairman of the Board of Directors shall preside over meetings of the Board
of Directors. |
| |
26.2.2. |
In
the event of a deadlock vote, the chairman of the Board of Directors shall
not have an additional or casting vote. |
C - 37
| |
26.2.3. |
The
chairman of the Board of Directors is entitled, at all times, at his
initiative or pursuant to a resolution of the Board of Directors, to
require reports from the General Manager in matters pertaining to the
business affairs of the Company. |
| |
26.3. |
Reservations
with Regard to Actions of the Chairman of the Board of Directors |
| |
26.3.1. |
The
chairman of the Board of Directors shall not serve as the General Manager of
the Company, unless he is appointed in accordance with the provisions of
Article 27.2 below. |
| |
26.3.2. |
The
chairman of the Board of Directors shall not serve as a member of the Audit
Committee. |
Chapter Five –
Officers who are not Directors, and the Auditor
| |
27.1. |
The
Appointment and Dismissal of the General Manager |
| |
27.1.1. |
The
Board of Directors shall appoint a General Manager for a fixed period of
time or for an indefinite period of time. The Board of Directors may
appoint more than one General Manager. |
| |
27.1.2. |
The
compensation and employment conditions of the General Manager shall be
determined by the Board of Directors in any manner it deems fit. Where the
compensation of the General Manager is regarded by the Board of Directors
in accordance with the Company Law as an “exceptional transaction” and
also in cases of the granting of a release, insurance, liability for
indemnification or indemnification given by a permit, said compensation
requires the prior approval of the audit committee. |
| |
27.1.3. |
The
Board of Directors may from time to time remove the General Manager from his
office or dismiss the General Manager and appoint another or others in his
stead. |
| |
27.2. |
The
Chairman of the Board of Directors as the General Manager |
| |
27.2.1. |
The
General Meeting of the Company is entitled to authorize the chairman of the
Board of Directors to fulfil the position of the General Manager and to
exercise his authority, so long as the majority of the votes in the
General Meeting adopting such a resolution include at least two thirds of
the votes of Shareholders present and entitled to vote at the meeting who
are not controlling Shareholders of the Company as defined in the
Companies Law or representatives of any of them. “Abstain” votes
shall not be taken into account in the counting of the votes of the
Shareholders. |
C - 38
| |
27.2.2. |
The
validity of a resolution provided in Article 27.2.1 above is restricted to a
maximum period of three years from the date of the adoption of the
resolution by the General Meeting. In the event that no period was set in
the resolution, the period shall be deemed to be for three years. Prior to
the completion of the three year period, as aforesaid, and even after the
end of this period, the General Meeting is entitled to extend the validity
of such resolution. |
| |
27.2.3. |
A
resolution, as stated, may relate to the authority of the chairman of the
Board of Directors, generally, or to a specific person who is serving as
the chairman of the Board of Directors. |
| |
27.3. |
The
Authority of the General Manager and Subordination to the Board of Directors |
| |
27.3.1. |
The
General Manager is responsible for the day-to-day management of the affairs
of the Company within the framework of the policy set by the Board of
Directors and subject to its instructions. |
| |
The
General Manager shall have all administrative and operational authority which were not
conferred by Law or pursuant to these Articles of Association to any other corporate
organ of the Company, and he shall be under the supervision of the Board of Directors and
subject to its instructions. |
| |
The
General Manager shall appoint and dismiss officers of the Company, with the exception of
Directors, and he shall also determine the terms of their employment, unless otherwise
resolved by the Board of Directors and provided, however, that the appointment and
dismissal of senior managers of the Company shall require consultation with and approval
by the Board of Directors. |
| |
27.3.2. |
The
Board of Directors may instruct the General Manager on how to act with
respect to a certain issue. If the General Manager fails to fulfil the
instruction, the Board of Directors may exercise the required authority in
order to act in the place of the General Manager. |
C - 39
| |
The
Board of Directors may assume the authority granted to the General Manager, either with
respect to a certain issue or for a certain period of time. |
| |
27.3.3. |
In
the event that the General Manager is unable to exercise his authority, the
Board of Directors may exercise such authority in his stead, or authorize
another to exercise such authority. |
| |
27.4. |
Reporting
Duties of the General Manager |
| |
The
General Manager is obligated to notify the chairman of the Board of Directors of any
exceptional matter which is material to the Company, or of any material deviation by the
Company from the policy set by the Board of Directors. In the event that the Company
shall be without a chairman of the Board of Directors for whatever reason the General
Manager shall notify all the members of the Board of Directors, as aforesaid. The General
Manager shall deliver to the Board of Directors reports on issues, at such time and in
such scope, as is determined by the Board of Directors. |
| |
27.5. |
Delegating
Authority of the General Manager |
| |
The
General Manager, upon approval of the Board of Directors, may delegate to his
subordinates any of his authority. However, such delegation of authority shall not
release the General Manager from his liability. |
| 28. |
The
Corporate Secretary, Internal Controller and Other Officers of the Company |
| |
28.1. |
The
corporate secretary |
| |
28.1.1. |
The
Board of Directors is entitled to appoint a corporate secretary on terms it
deems fit, joint secretaries, sub–secretaries and to determine the
areas of their functions and authorities. |
| |
28.1.2. |
In
the event that no corporate secretary has been appointed, the General Manager
or anyone authorized by him shall fulfil the functions assigned to the
corporate secretary, in accordance with any Law, to these Articles of
Association and the resolutions of the Board of Directors. |
| |
28.1.3. |
The
corporate secretary shall be responsible for all documents which are kept at
the Office, as stated in Section 124 of the Companies Law, and he shall
manage all the registries maintained by the Company in accordance with the
Law or Companies Law. |
C - 40
| |
28.2. |
Internal
Controller |
| |
28.2.1. |
The
internal controller of the Company shall report to the chairman of the Board
of Directors. |
| |
28.2.2. |
The
internal controller shall file with the Board of Directors a proposal for an
annual or other periodic work plan, which shall be approved by the Board
of Directors, subject to any changes it deems fit. |
| |
28.3. |
Other
Officers of the Company |
| |
The
Board of Directors may decide that in addition to the General Manager and the corporate
secretary, other officers may be appointed, whether generally or for a specific issue. In
such event, the Board of Directors shall appoint the officer, define his position and
authority, and set his compensation and terms of employment. |
| |
The
Board of Directors is entitled to authorize the General Manager to fulfil any or all of
its authorities, as stated. |
| |
29.1. |
The
Shareholders at the Annual Meeting shall appoint an auditor for a period until
the close of the following Annual Meeting. The Annual Meeting may appoint an
auditor for a period not to extend beyond the close of the third Annual Meeting
following the Annual Meeting in which he was appointed. In the event that the
auditor was appointed for said period, the Annual Meeting shall not address the
appointment of the auditor during said period, unless a resolution is adopted
with respect to the termination of his service. |
| |
29.2. |
The
General Meeting is entitled at all times to terminate the service of the
auditor or to decide not to renew it. |
| |
29.3. |
The
Board of Directors shall determine the compensation of the auditor of the
Company and it shall report in that respect to the Annual Meeting of the
Company. |
| |
29.4. |
The
Board of Directors shall set the compensation of the auditor for additional
services which are not regarded as oversight activities, and it shall report in
this respect at the Annual Meeting of the Company. |
Chapter Six – The
Share Capital of the Company and its Distribution
| 30. |
Permitted
Distributions |
| |
In
this Chapter, the following terms shall be construed, in accordance with their definition
in Sections 301 and 302 of the Companies Law: “distribution”, “acquisition”,
“profits”, “profit test”, “adjusted financial statements” and
“balances”. |
C - 41
| |
30.2. |
Distribution
of Profits |
| |
The
Company shall not make any distribution except from its profits, provided that the
Company shall not make any distribution if there is a reasonable fear that such
distribution shall preclude the Company from having the ability to meet its present and
anticipated liabilities, as they become due. Notwithstanding the aforesaid, the Company,
with the approval of the Court, is entitled to make a distribution which fails to meet
the profit test. |
| |
30.3. |
Allotment
for a Consideration Below the Par Value |
| |
In
the event the Board of Directors decides to allot Shares having a par value, for
consideration which is less than their par value, including Bonus Shares, the Company
shall convert into share capital from its profits, premium on its Shares, or any other
source, included in its shareholders equity, as stated in its most recent Financial
Statements, an amount equal to the difference between the par value and the consideration. |
| |
Even
if the aforesaid is not done, with the approval of the Court, the Company shall be
entitled to make an allotment of Shares, for consideration which is less than their par
value. |
| 31. |
Dividends
and Bonus Shares |
| |
31.1. |
Right
to Dividends or Bonus Shares |
| |
31.1.1. |
A
Shareholder of the Company shall have the right to receive dividends or Bonus
Shares, if the Company so decides in accordance with Article 31.2 below,
consistent with the rights attaching to such Shares. |
| |
31.1.2. |
Dividends
or Bonus Shares shall be distributed or allotted to those who are
registered in the Shareholder Register on the date of the resolution
approving the distribution or allotment or upon a latter date, if another
date is determined for this purpose in same resolution (hereinafter: the
“Determining Date”). |
| |
31.1.3. |
In
the event that the share capital of the Company consists of Shares having
various par values, dividends or Bonus Shares shall be distributed in
proportion to the par value of each Share. |
C - 42
| |
31.1.4. |
Subject
to special rights conferred upon Shares in accordance with the conditions
of their allotment, profits of the Company which the Company decides to
distribute as a dividend or as Bonus Shares shall be paid in proportion to
the amount which was paid or credited on the account of the par value of
the Shares, held by the Shareholder. |
| |
31.1.5. |
In
the event that it was not otherwise determined in the conditions applicable
to the allotment of the Shares or in a resolution of the General Meeting,
all the dividends or Bonus Shares with respect to Shares, which were not
fully paid within the period in which the dividends or Bonus Shares are
paid, shall be paid in proportion to the amounts which were actually paid
or credited as paid on the par value of the Shares during any part of said
period (pro rata temporis). |
| |
31.2. |
Resolution
of the Company with Respect to a Dividend or Bonus Shares |
| |
31.2.1. |
The
Authority to Distribute Dividends or Bonus Shares |
| |
The
resolution of the Company on the distribution of a dividend or Bonus Shares to be
distributed to the Shareholders according to their respective rights and benefits, and on
their time of payment, shall be made by the Board of Directors. |
| |
The
Board of Directors may, in its discretion, allocate to special funds any amount
whatsoever from the profits of the Company or from the revaluation of its assets or its
relative share in the revaluation of assets of “branch companies,” and also to
determine the designation of these funds. |
| |
31.3. |
The
Payment of Dividends |
| |
31.3.1. |
Manner
of Payment |
| |
Unless
otherwise provided in the resolution with respect to the distribution of the dividend,
the Company may pay any dividend with the withholding of any tax required by Law, by way
of a cheque to the order of the beneficiary alone, which should be sent by means of
registered mail to the registered address of the Shareholder entitled thereto, or by way
of a bank transfer. Any cheque, as stated, shall be drawn up to the order of the person
to whom it is intended. |
| |
In
the event of registered joint holders, the cheque shall be passed to the same Shareholder
whose name is registered first in the Shareholder Register with respect to the joint
holding. |
C - 43
| |
The
sending of a cheque to a person whose name is registered in the Shareholder Register as
the holder of the Share upon the Determining Date or, in the case of joint holders, to
any of the joint holders, shall serve as evidence with respect to all the payments made
in connection with same Shares. |
| |
The
Company may decide that a cheque under a certain amount shall not be sent and the amount
of the dividend which was supposed to be paid shall be deemed to be an unclaimed dividend. |
| |
31.3.2. |
An
Unclaimed Dividend |
| |
The
Board of Directors is entitled to invest the amount of any unclaimed dividend for one
year after it was declared or to utilize it in any other manner to the benefit of the
Company until it is claimed. The Company shall not be obligated to pay interest or
Linkage on an unclaimed dividend. |
| |
31.3.3. |
Specific
Dividend |
| |
In
the event the Company declares a dividend, as provided in Article 31.2.1 above, it may
decide that same dividend shall be paid, entirely or partially, by way of the
distribution of certain assets, including fully paid Shares or bonds of any other company
or in any combination of these assets. |
| |
31.4. |
Manner
of Capitalization of Profits and the Distribution of Bonus Shares |
| |
31.4.1. |
Subject
to the provisions of Article 30 above in the event of a capitalization of
profits and distribution of Bonus Shares, the undistributed profits of the
Company, or premium on Shares, or funds derived from the revaluation of
the assets of the Company, or funds derived on the basis of equity from
the profits of “branch companies,” or from the revaluation of
assets of “branch companies” and capital redemption funds shall
be capitalized and distributed among the Shareholders entitled thereto, as
per the provisions of Article 31.1 above, to be held by the shareholders
as capital, and that this capital, entirely or partially, shall be used on
behalf of same Shareholders as full payment, whether according to the par
value of the Shares or together with premium decided upon, for Shares to
be distributed accordingly, and that this distribution or payment shall be
received by same Shareholders as full consideration for their portion of
the benefit in the capitalized amount, as determined by the Board of
Directors. |
C - 44
| |
The
provisions of this chapter six shall also apply to the distribution of bonds. |
| |
31.4.2. |
The
Company, in the resolution with respect to the distribution of Bonus Shares, is
entitled in accordance with the recommendation of the Board of Directors, to
decide that the Company shall transfer to a special fund, designated for the
future distribution of Bonus Shares, an amount the capitalization of which
shall be sufficient in order to allot to anyone having at such time a right to
acquire Shares of the Company (including a right which can be exercised only
upon a later date), Bonus Shares at the par value which would have been due to
him had he exercised the right to acquire the Shares shortly before the
Determining Date, at the price of the right in effect at such time. In the
event that after the Determining Date, the holder of said right shall exercise
his right to acquire the Shares or any part of them, the Board of Directors
shall allot to him fully paid Bonus Shares at such par value and of such class,
which would have been due to him had he exercised shortly before the
Determining Date the right to acquire those Shares he actually acquired, by way
of an appropriate capitalization made by the Board of Directors out of the
special fund, as aforesaid. For the purpose of the determination of the par
value of the Bonus Shares which are to be distributed, any amount transferred
to the special fund, with respect to a previous distribution of previous Bonus
Shares shall be viewed as if it had already been capitalized and that Shares
entitling the holders to the right to acquire Shares of the Company were
already allotted as Bonus Shares. |
| |
31.4.3. |
Upon
the distribution of Bonus Shares, each Shareholder of the Company shall receive
Shares of a uniform class or of the class which confers on its holder the right
to receive the Bonus Shares, as determined by the Board of Directors. |
| |
31.4.4. |
For
purposes of carrying out any resolution pursuant to the provisions of Article
30, the Board of Directors may settle, as it deems fit, any difficulty arising
with regard to the distribution of Bonus Shares, and, in particular, to issue
certificates for fractions of Shares and sell such fractions of Shares, in
order to pay their consideration to those entitled thereto, and also to set the
value for the distribution of certain assets and to decide that cash payments
shall be paid to the Shareholders on the basis of the value determined in such
a way, or that fractions whose value is less than NIS 0.01 shall not be taken
into account, pursuant to the adjustment of the rights of all parties. The
Board of Directors may pay cash or convey these certain assets to trustees in
trust in favor of those people who are entitled to a dividend or to a
capitalized fund, as the Board of Directors shall deem beneficial. |
C - 45
| 32. |
Acquisition
of Shares |
| |
32.1. |
The
Company is entitled to acquire or to finance an acquisition, directly or
indirectly, of Shares of the Company or securities convertible into Shares of
the Company or which could be exercised into Shares of the Company, including
incurring an obligation to take any of these actions, subject to the
fulfillment of the conditions of a permissible distribution, as stated in
Article 30 above. |
| |
32.2. |
In
the event that the Company acquired any of its Shares, such a Share shall
become a dormant Share, and shall not confer any rights, so long as it is in
the holding of the Company. |
| |
32.3. |
A
subsidiary or another corporation in the control of the Company is entitled to
acquire Shares of the Company or securities convertible into Shares of the
Company or which can be exercised into Shares of the Company, including an
obligation to take any of these actions, to the same extent the Company may
make a distribution, so long as the board of directors of the subsidiary or the
managers of the acquiring corporation have determined that had the acquisition
of the Shares been carried out by the Company it would have been regarded as a
permissible distribution, as specified in Article 30 above. Notwithstanding the
foregoing, an acquisition by a subsidiary or by another corporation in the
control of the Company, which is not fully-owned by the Company, will be
considered a distribution of an amount equal to the product of the amount
acquired multiplied by the percentage of the rights in the capital of the
subsidiary or in the capital of said corporation which is held by the Company. |
| |
32.4. |
In
the event that a Share of the Company is acquired by a subsidiary or by a
corporation in the control of the Company, the Share shall not confer any
voting rights, for so long as said Share is held by the subsidiary or by said
controlled corporation. |
Chapter Seven –
Insurance, Indemnification and Release of Officers
| 33. |
Insurance
of Officers |
| |
33.1. |
The
Company may insure the liability of an officer in the Company, to the fullest
extent permitted by Law. |
C - 46
| |
33.2. |
Without
derogating from the aforesaid, the Company may enter into an insurance contract
and/or arrange and pay all premiums in respect of an insurance contract, for
the insurance of the liability of an officer in the Company, resulting directly
or indirectly from an action or inaction by him (or together with other
officers of the Company) in his capacity as an officer in the Company, for any
of the following: |
| |
33.2.1. |
The
breach of the duty of care toward the Company or toward any other person; |
| |
33.2.2. |
The
breach of the duty of loyalty toward the Company provided the officer has acted
in good faith and had reasonable grounds to assume that the action would not
harm the Company; and |
| |
33.2.3. |
A
financial liability imposed on him in favor of another person. |
| |
33.2.4. |
Any
other matter in respect of which it is permitted or will be permitted under Law
to insure the liability of an officer in the Company. |
| 34. |
Indemnification
of Officers |
| |
34.1. |
The
Company may indemnify an officer in the Company.to the fullest extent permitted
by Law. Without derogating from the aforesaid, the Company may indemnify an
officer in the Company as specified in Articles 34.2 through 34.4 below. |
| |
34.2. |
Indemnification
in Advance |
| |
The
Company may indemnify an officer in the Company for liability or expense he incurs or
that is imposed on him in consequence with an action or inaction by him (or together with
other officers of the Company) in his capacity as an officer in the Company, as follows: |
| |
34.2.1. |
Any
financial liability he incurs or is imposed on him in favor of another
person in accordance with a judgment, including a judgment given in a
settlement or a judgment of an arbitrator, approved by the Court. |
| |
34.2.2. |
Reasonable
litigation expenses, including legal fees, incurred by the officer or
which he was ordered to pay by the Court, in the context of proceedings
filed against him by the Company or on its behalf or by a third party, or
in a criminal proceeding in which he was acquitted, or in a criminal
proceeding in which he was convicted of an offense which does not require
criminal intent. |
| |
34.2.3. |
Reasonable
litigation expenses, including legal fees, incurred by the officer due to
such investigation or proceeding conducted against him by an authority
authorized to conduct an investigation or proceeding, and which was ended
without filing an indictment against him and without the imposition of a
financial liability as a substitute for a criminal proceeding, or that was
ended without filing an indictment against him but for which he was
subject to a financial liability as a substitute for a criminal proceeding
relating to an offense which does not require criminal intent, within the
meaning of the relevant terms in the Law. |
C - 47
| |
34.2.4. |
Any
other liability or expense in respect of which it is permitted or will be
permitted under Law to indemnify an officer in the Company. |
| |
34.3. |
Indemnification
in Advance |
| |
The
Company may undertake in advance to indemnify an officer of the Company in respect of the
following matters:. |
| |
34.3.1. |
Matters
as detailed in Article 34.2.1 provided however, that the undertaking to
indemnify is restricted to events which in the opinion of the Board of
Directors are anticipated in light of the Company’s activities at the
time of granting the obligation to indemnify, and is limited to a sum or
measurement determined by the Board of Directors to be reasonable in the
circumstances. The undertaking to indemnify shall specify the events that,
in the opinion of the Board of Directors are expected in light of the
Company’s actual activity at the time of grant of the indemnification
and the sum or measurement which the Board of Directors determined to be
reasonable in the circumstances. |
| |
34.3.2. |
Matters
as detailed in Article 34.2.2 and 34.2.3. |
| |
34.3.3. |
Any
other matter permited by Law. |
| |
34.4. |
Indemnification
after the Fact |
| |
The
Company may indemnify an officer in the Company for all kinds of events, retrospectively,
subject to any applicable Law |
| |
35.1. |
The
Company shall not release an officer from his liability for a breach of the
duty of care toward the Company, other than in accordance with the provisions
of this Article. |
C - 48
| |
35.2. |
The
Company may release an officer in the Company, in advance, from his liability,
entirely or partially, for damage in consequence of the breach of the duty of
care toward the Company. |
| |
35.3. |
Notwithstanding
the foregoing, the Company may not release an officer from his liability,
resulting from any of the following events: |
| |
35.3.1. |
The
breach of the duty of loyalty toward the Company. |
| |
35.3.2. |
The
breach of the duty of care made intentionally or recklessly (“pezizut”); |
| |
35.3.3. |
An
intentional act intended to unlawfully yield a personal profit; |
| |
35.3.4. |
A
criminal fine or a penalty imposed on him. |
Chapter Eight –
Liquidation and Reorganization of the Company
| |
36.1. |
In
the event that the Company is liquidated, whether voluntarily or otherwise, the
liquidator, upon the approval of an Extraordinary Meeting, may make a
distribution in kind to the Shareholders of all or part of the property of the
Company, and he may with a similar approval of the General Meeting, deposit any
part of the property of the Company with trustees in favor of the Shareholders,
as the liquidator with the aforementioned approval, deems fit. |
| |
36.2. |
The
Shares of the Company shall confer equal rights among them with respect to
capital amounts which were paid or which were credited as paid on the par value
of the Shares, in all matters pertaining to the refund of the capital and to
the participation in the distribution of the balance of the assets of the
Company in liquidation. |
| |
37.1. |
Upon
the sale of the property of the Company, the Board of Directors or the
liquidators (in case of a liquidation), if they are so authorized by a
resolution of the General Meeting of the Company adopted with a Special
Majority, may receive fully or partially paid up Shares, bonds or securities of
another company, either Israeli or foreign, whether incorporated or which is
about to incorporated for the purpose of acquiring property of the Company, or
any part thereof, and the Directors (if the profits of the Company allow for
it) or the liquidators (in case of a liquidation) may distribute among the
Shareholders the Shares or the securities mentioned above or any other property
of the Company without selling them or depositing them with trustees on behalf
of the Shareholders. |
C - 49
| |
37.2. |
The
General Meeting may, pursuant to a resolution adopted by a Special Majority,
decide on the valuation of the securities or of the aforementioned property at
a price and in the same manner as it deems appropriate and all the Shareholders
shall be obligated to accept any valuation or distribution, authorized in
accordance with the foregoing and to waive their rights in this matter, unless
the Company is about to liquidate or is in a liquidation process, of same
lawful rights (if any) which according to the provisions of the Law should not
be altered or denied. |
Chapter Nine –
Miscellaneous
| |
38.1. |
A
notice or other document may be sent by the Company to any Shareholder
appearing in the Shareholder Register of the Company either personally or by
way of sending by registered mail, at the registered address of the Shareholder
in the Shareholder Register, or at such address as the Shareholder shall have
provided in writing to the Company as the address for the delivery of notices. |
| |
38.2. |
All
the notices to be given to Shareholders, shall, in respect of Shares held
jointly, be given to the person whose name is mentioned first in the
Shareholder Register, and any notice given in such a manner shall be viewed as
a sufficient notice to all the joint Shareholders. |
| |
38.3. |
Any
Shareholder registered in the Shareholder Register, with an address, whether in
Israel or overseas, is entitled to receive, at such address, any notice he is
entitled to receive in accordance with the Articles of Association or according
to the provisions of the Law. Unless otherwise stated above, no person who is
not registered in the Shareholder Register shall be entitled to receive any
notices from the Company. |
| |
38.4. |
Any
notice or other document which is sent to a Shareholder in accordance with
these Articles of Association shall be considered lawfully sent with respect to
all the Shares held by him (whether with respect to Shares held by him alone or
held by him jointly with others) even if same Shareholder had died by that time
or had become bankrupt or had received an order for its liquidation or if a
trustee or a liquidator or a receiver was appointed with respect to his Shares
(whether the Company was aware of it or not) until another person is registered
in the Shareholder Register in his stead, as the holder thereof. The sending of
a notice or other document, as aforesaid, shall be viewed as a sufficient
sending to any person having a right in these Shares. |
| |
38.5. |
Any
notice or other document which was sent by the Company via registered mail, to
an address in Israel, shall be considered sent within 72 hours from its posting
at the post office. In order to prove sufficient sending, it is enough to show
that the letter containing the notice or the document was addressed to the
correct address and was posted at the post office. |
C - 50
| |
38.6. |
Any
accidental omission with respect to the giving of a notice of a General Meeting
to any Shareholder or the non-receipt of a notice with respect to a meeting or
any other notice on the part of whatever Shareholder shall not cause the
cancellation of a resolution taken at that meeting, or the cancellation of
processes based on such notice. |
| |
38.7. |
Any
Shareholder and any member of the Board of Directors may waive his right to
receive notices or waive his right to receive notices during a specific time
period and he may consent that a General Meeting of the Company or a meeting of
the Board of Directors, as the case may be, shall be convened and held
notwithstanding the fact that he did not receive a notice with respect to it,
or notwithstanding the fact that the notice was not received by him within the
required time, in each case subject to the provisions of any Law prohibiting
any such waiver or consent. |
Chapter 10 –
Intentionally Deleted
| 39. |
Intentionally
Deleted |
| 40. |
Intentionally
Deleted |
| 41. |
Intentionally
Deleted |
| 42. |
Intentionally
Deleted |
Chapter 11 –
Compliance with the License /
Limitations on
Ownership and Control
| |
The
Shareholders and the Company shall at all times comply with the terms of the License and
of any other telecommunications license held by the Company. Nothing herein shall be
construed as requiring or permitting the performance of any acts which are inconsistent
with the terms of the License and of any other telecommunications license held by the
Company. If any article of these Articles shall be found to be inconsistent with the
terms of the License and of any other telecommunications license held by the Company, the
provisions of such Article shall be null and void, but the validity, legality or
enforceability of provisions of the other Articles shall not be affected thereby. |
| 44. |
Limitations
on Ownership and Control |
| |
44.1. |
This
Article is to ensure that so long as and to the extent that any Operating Right
is conditional on or subject to any conditions or restrictions relating to
ownership or control over the Company imposed by the Ministry, the Company is
so owned and controlled. This Article shall not affect or influence in any way
the interpretation or application of Article 10A. |
C - 51
| |
“Affected
Share” means any Share determined to be dealt with as such pursuant to Article
44.4; |
| |
“Affected
Share Notice” means a notice in writing served in accordance with Article 44.5; |
| |
“Depositary” means
a custodian or other person appointed under contractual arrangements with the Company (or
a nominee for such custodian or other person) whereby such custodian or other person
holds or is interested in Shares and which issues securities evidencing the right to
receive such Shares; |
| |
“Depositary
Receipts” means receipts or similar documents of title issued by or on behalf of
a Depositary; |
| |
“Depositary
Shares” means the Shares held by a Depositary or in which a Depositary is
interested in its capacity as a Depositary; |
| |
“Intervening
Act” means the refusal, withholding, suspension or revocation of any Operating
Right applied for, granted to or enjoyed by the Company, or the imposition of any
conditions or limitations upon any such Operating Right which materially inhibit the
exercise thereof, in either case by any state, authority or person (including the
Ministry) by reason of the activities of persons holding Shares in and/or controlling the
Company; |
| |
“Ministry” means
the Ministry of Communications and/or Minister of Communications; |
| |
“Operating
Right” means all or any part of any authority, permission, licence or privilege
applied for, granted to or enjoyed by the Company, including the Licence, for the
establishment, subsistence, maintenance and operation of a mobile radio telephone system
using the cellular method and the provision of mobile radio telephone services to the
public in Israel; |
| |
“Permitted
Maximum” means the maximum aggregate permitted number of Relevant Shares
specified by the Board of Directors in accordance with the terms of the Licence, any
other requirements of the Ministry and any relevant requirements of Law; |
| |
(a) |
any
person who, without the approval of the Ministry, acquires, directly or
indirectly, any Means of Control (as defined in the Licence) in breach of
Section 21 of the Licence other than a person who falls within Article
10A; or |
C - 52
| |
(b) |
any
Interested Party (as defined in the Licence) who, or who has an Officer
Holder (as defined in the Licence) who, is in breach of Sections 23 or 24
of the Licence other than a person who falls within Article 10A; |
| |
“Relevant
Share” means any Share (other than a Share removed from the Relevant Shares
Register (defined in Article 44.3.2) pursuant to Article 44.3.5), in which a Relevant
Person has an interest or which is declared to be a Relevant Share pursuant to Article
44.3.4; |
| |
44.3.1. |
The
Board of Directors shall not register a person as a holder of a Share unless
the person has given to the Board of Directors a declaration (in a form
prescribed by the Board of Directors) signed by him or on his behalf,
stating his name, nationality, that he is not a Relevant Person falling
within paragraphs (c) or (d) of the definition of that term and other
information required by the Board of Directors. |
| |
44.3.2. |
The
Board of Directors shall maintain a register (the “Relevant Shares
Register”), in which shall be entered particulars of any Share which
has been: |
| |
(a) |
acknowledged
by the holder (or by a joint holder) to be a Relevant Share; |
| |
(b) |
declared
to be a Relevant Share pursuant to Article 44.3.4; or |
| |
(c) |
determined
to be an Affected Share pursuant to Article 44.4.2.; |
| |
and
which has not ceased to be a Relevant Share. The particulars in the Relevant Shares
Register in respect of any Share shall include the identity of the holder or joint
holders and information requested by and supplied to the Board of Directors. |
| |
44.3.3. |
Each
registered holder of a Share which has not been acknowledged to be a Relevant
Share who becomes aware that such Share is or has become a Relevant Share shall
forthwith notify the Company accordingly. |
| |
44.3.4. |
The
Board of Directors may notify in writing the registered holder of a Share which
is not in the Relevant Shares Register and appears to be a Relevant Share,
requiring him to show that the Share is not a Relevant Share. Any person to
whom such notice has been issued may within 21 clear days after the issue of
the notice (or such longer period as the Board of Directors may decide)
represent to the Board of Directors why such Share should not be treated as a
Relevant Share but if, after considering such representations and other
relevant information, the Board of Directors is not so satisfied, it shall
declare such Share to be a Relevant Share and treat it as such. |
C - 53
| |
44.3.5. |
The
Board of Directors shall remove a Relevant Share from the Relevant Shares
Register if the holder of the Relevant Share gives to the Board of Directors a
declaration (in a form prescribed by the Board of Directors), together with
such other evidence as the Board of Directors may require, which satisfies it
that such Share is no longer, or should not be treated, as a Relevant Share. |
| |
44.4.1. |
Article
44.4.2 shall apply for so long as the Company holds or enjoys any Operating
Right where the Board of Directors determines that it is necessary to take
steps to protect any Operating Right because an Intervening Act is
contemplated, threatened or intended, may take place or has taken place; |
| |
44.4.2. |
Where
a determination has been made under Article 44.4.1, the Board of Directors
shall take such of the following steps as they consider necessary or desirable
to overcome, prevent or avoid an Intervening Act: |
| |
44.4.2.1. |
the
Board of Directors may remove any Director from office, by a resolution passed
by a majority of 75 per cent or more of the other Directors present and voting
at the relevant meeting; |
| |
44.4.2.2. |
the
Board of Directors may seek to identify those Relevant Shares which gave rise
to the determination under Article 44.4.1 and by a resolution passed by a
majority of 75 per cent or more of the Directors present and voting at the
relevant meeting deal with such Shares as Affected Shares; and |
| |
44.4.2.3. |
when
the aggregate number of Relevant Shares in the Relevant Shares Register exceeds
the Permitted Maximum, the Board of Directors may deal with the Relevant Shares
which it decides, by a resolution passed by a majority of 75 per cent or more
of the Directors present and voting at the relevant meeting, are in excess of
the Permitted Maximum as Affected Shares. |
C - 54
| |
44.5. |
The
Board of Directors shall give an Affected Share Notice to the registered holder
of any Affected Share and state that Article 44.6 is to be applied forthwith in
respect of such Affected Share. The registered holder of the Affected Share may
within 21clear days after the issue of the notice (or such longer period as the
Board of Directors may decide) represent to the Board of Directors why such
Share should not be treated as an Affected Share and if, after considering such
representations and other relevant information, the Board of Directors
considers that the Share should not be treated as an Affected Share it shall
forthwith withdraw the Affected Share Notice and Article 44.6 shall no longer
apply to the Share. |
| |
44.6. |
An
Affected Share in respect of which an Affected Share Notice has been served
shall be treated as a dormant share (as defined in section 308 of the Companies
Law) except that the registered holder of the Affected Share shall continue to
have the right to receive dividends and other distributions of the Company and
participate in bonus or rights issues of the Company in respect of such Share. |
| |
44.7. |
In
deciding which Shares are to be treated as Affected Shares, the Board of
Directors shall have regard to the Relevant Shares which in its opinion have
directly or indirectly caused the determination under Article 44.4 and the
chronological order in which Relevant Shares have been entered in the Relevant
Shares Register (and accordingly treat as Affected Shares those Relevant Shares
entered in the Relevant Shares Register most recently) except where such
criterion would in their opinion be inequitable, in which event the Board of
Directors shall apply such other criterion or criteria as they may consider
appropriate. |
| |
44.8. |
Subject
to the other provisions of this Article 44, the Board of Directors shall be
entitled to assume without enquiry that: |
| |
44.8.1. |
all
Shares not in the Relevant Shares Register and not falling within clause 44.8.2
are neither Relevant Shares nor Shares which would be or be capable of being
treated as Affected Shares; and |
| |
44.8.2. |
all
or some specified number of the Shares are Relevant Shares falling within
paragraphs (a)-(b) in the definition of that term if they (or interests in
them) are held by a Depositary, trustee, registration or nominee company or
other agent unless and for so long as, in respect of any such Shares, it is
established to their satisfaction that such Shares are not Relevant Shares. |
| |
44.9. |
Any
resolution or determination of, or any decision or the exercise of any
discretion or power by, the Board of Directors or any one of the Directors
under this Article 44 shall be final and conclusive. |
| |
44.10.1. |
On
withdrawal of the determination under Article 44.4.1, the Board of Directors
shall cease to act pursuant to such determination and inform every person on
whom an Affected Share Notice has been served that Article 44.6 no longer
applies in respect of such Share. The withdrawal of such a determination shall
not affect the validity of any action taken by the Board of Directors under
this Article whilst that determination remained in effect and such actions
shall not be open to challenge on any ground whatsoever. |
C - 55
| |
44.10.2. |
The
Board of Directors shall, so long as it acts reasonably and in good faith, be
under no liability to the Company or to any other person for failing to treat
any Share as an Affected Share or any person as a Relevant Person in accordance
with this Article and it shall not be liable to the Company or any other person
if, having acted reasonably and in good faith it determines erroneously that
any Share is an Affected Share, or any person is a Relevant Person or on the
basis of such determination or any other determination or resolution, they
perform or exercise their duties, powers, rights or discretions under this
Article in relation to such Share. |
| |
44.11. |
A
person who has an interest in Shares by virtue of having an interest in
Depositary Receipts shall be deemed to have an interest in the number of Shares
represented by such Depositary Receipts and not (in the absence of any other
reason why he should be so treated) in the remainder of the Depositary Shares
held by the relevant Depositary. |
C - 56
Annex “D”
Translation of
Sections 21-24 of the License
Transfer of Means of Control
| 21.1 |
A
holding of ten percent (10%) or more of any of the Means of Control in the Licensee will
not be transferred, either directly or indirectly, either all at once or in parts, unless
given the Minister’s prior written consent. |
| 21.2 |
Any
of the said Means of Control, or a part of them, in the Licensee, may not be transferred
in any way, if as a result of the transfer, control in the Licensee will be transferred
from one person to another, unless given the Minister’s prior written consent. |
| 21.3 |
No
control shall be acquired, either direct or indirect, in the Licensee, and no person,
whether on his/her own or together with his/her relative or with those acting with
him/her on a regular basis, shall acquire in it ten percent (10%) or more of any of the
Means of Control in the Licensee, whether all at once or in parts, unless given the
Minister’s prior written consent. |
| 21.4 |
Subject
to what is stated above in this Paragraph, no Means of Control shall be transferred,
either directly or indirectly, in a way that will cause the share of an MRT Operator in
the Licensee to be reduced from twenty-five (25%) of the voting rights in the general
meeting and of the right to appoint a Director or General Manager, unless five (5) years
have elapsed from the date of License award; if five (5) years have elapsed from the date
of License award, an MRT Operator’s share may decrease from twenty-five percent
(25%) to the extent of selling the entire Means of Control held by it to another, all
subject to the approval of the Minister both for the reduction in the MRT Operator’s
share of the Means of Control in the Licensee, and with regard to the buyer; for the
matter of this Paragraph, “MRT Operator” has the same meaning as set out in
Paragraph 14.1B. |
| 21.5 |
1Despite
the provisions of sub-clauses 21.1 and 21.3 above, should there occur a transfer or
purchase of a percentage of Tradable Means of Control in the Licensee requiring consent
under clauses 21.1 and 21.3 (other than a transfer of purchase that results in a transfer
of control), without the Minister’s consent having been sought, the Licensee shall
report this to the Minister in writing, and shall make an application to the Minister to
approve the said transfer or purchase of the Means of Control in the Licensee, within 21
days of the date on which the Licensee became aware of such. |
| |
In
this Clause 21, “Tradable Means of Control” – Means of Control,
including Global or American Depository Shares (GDR’s or ADR’s), or similar
certificates, registered for trading on the securities exchange in Israel or overseas,
and offered to the public by prospectus, or held by the public in Israel or overseas. |
1 Amendment No. 3
| 21.6 |
Neither
the entry into an underwriting agreement relating to the issue or sale of securities to
the public, the registration for trading on the securities exchange in Israel or
overseas, nor the deposit or registration of securities with a registration company or
with a depository agent or a custodian for the purpose of registration of GDRs or ADRs or
similar certificates relating to the issue or sale of securities to the public shall in
and of themselves be considered as a transfer of Means of Control in the Licensee2. |
| 21.7 |
(a) |
Irregular Holdings shall be noted in the Licensee’s members register (the list of
shareholders) stating the fact that they are irregular, immediately upon the Licensee’s
becoming aware of this, and a notice of the registration shall be given by the Licensee
to the holder of such Irregular Holding and to the Minister. |
| |
(b) |
Irregular
Holdings, noted as aforesaid in clause 21.7(a), shall not provide the
holder with any rights, and shall be “dormant shares” as defined
in Section 308 of the Companies Law 5759-1999, expect in the case of the
receipt of a dividend or any other distribution to shareholders
(especially the right to participate in an allotment of rights calculated
on the basis of holdings of Means of Control in the Licensee, although
holdings accumulated as aforesaid shall also be considered as Irregular
Holdings), and therefore no action or claim of the activation of a right
by virtue of the Irregular Holdings shall have any force, except in the
case of the receipt of a dividend or any other distribution as aforesaid. |
| |
Without
derogating form the generality of the above: |
| |
(1) |
A
shareholder who takes part in a vote during a meeting of shareholders shall
advise the Licensee prior to the vote, or in the case of documentary voting on
the voting document, whether his holdings in the Licensee or his voting require
consent under clauses 21 and 23 of the License or not; where a shareholder does
not so advise, he may not vote and his vote shall not count. |
| |
(2) |
No
director of the Licensee shall be appointed, elected or transferred from office
by virtue of an Irregular Holding; should a director be appointed, elected or
transferred from office as aforesaid, the said appointment, election or
transfer, as the case may be, shall be of no effect. |
| |
(3) |
Irregular
Holdings shall not provide voting rights in the general meeting; |
2 Amendment No. 4
D - 2
| |
For
the purposes of this clause: |
| |
“Irregular
Holdings” – the holding of Tradable Means of Control without the Minister’s
consent as required under clause 23, and all holdings of a person holding Tradable Means
of Control acting contrary to the provisions of clause 24; for so long as the Minister’s
consent under clause 21 has been sought but not yet granted, or whilst there is a
situation of breach of the provisions of clauses 23 or 24. |
| |
(c) |
The
provisions of clause 21.7 shall be included in the Articles of Association
of the Licensee, including the provisions of clause 21.9, mutatis
mutandis. |
| 21.8 |
For
so long as the Articles of Association of the Licensee provide as set out in clause 21.7,
and the Licensee acts in accordance with the provisions of clauses 21.5 and 21.7, and for
so long as none of the holdings of Founding Shareholders or their Substitutes3 reduces
to less than 26% 456 of all Means of Control in
the Licensee immediately prior to the listing of the shares for trade, and for so long as
the Articles of Association of the Licensee provide that a majority of the voting power
in the general meeting of the Licensee may appoint all members of the Board of Directors
of the Licensee, other than external directors required by any law and/or the relevant
Exchange Rules, the Irregular Holdings shall not, in and of themselves, give rise to a
cause for the cancellation of the Licensee. |
| |
‘For
the purpose of this article: “Founding Shareholders or their Substitutes”-
Matbit Telecommunications Systems Ltd., Advent Investment Pte Limited, Matav Investments
Ltd and Tapuz Cellular Systems limited Partnership as well as any other entity that one
of them has transferred the Means of Control in the Licensee to, with the Minister’s
consent, before 4.7.2004 (each of the above entities shall be termed “Founding
Shareholder”), as well as any other entity that a Founding Shareholder will transfer
Means of Control in the Licensee to after 4.7.2004, provided that the Minister gave his
written consent that the transferree be considered for this matter as the Founding
Shareholder’s substitute from the date to be determined by the Minister, including
anyone that is an Israel Entity as defined in Article 22A.2, that purchased Means of
Control from the Licensee and received the Minister’s approval to be considered a
founding shareholder or their substitute from the date set by the Minister7.
Such consent under this article does not exempt the Licensee from the obligation to
receive the Minister’s consent for every transfer of the Means of Control in the
Licensee that requires the Minister’s consent in accordance with any other article
in the License.8 |
3 Amendment No. 25
4 Amendment No. 9
5 Amendment No. 28
6 Amendment No. 31
7 Amendment No. 31
8 Amendment
No. 25
D - 3
| 21.9 |
The
provisions of clauses 21.5 through 21.8 shall not apply to the founding
shareholders or their substitutes.9 |
| 22. |
Placing
a Charge on Means of Control |
| |
Any
shareholder in the company that holds the License, or a shareholder in an Interested
Party in the same company, is not allowed to encumber his/her shares, in a way that the
realization of the charge would cause a change in the ownership in ten percent (10%) or
more of any of the Means of Control in the Licensee, unless the charge agreement includes
a constraint, according to which the charge cannot be realized without prior consent, in
writing, by the Minister. |
| 22A. |
Israeli
Requirement and Holdings of Founding Shareholders or their Substitutes10 |
| 22A.1. |
The total
cumulative holdings of the “Founding Shareholders or their Substitutes”, as
defined in Article 21.8, (including anyone that is an “Israeli Entity” as
defined in Article 22.2A below, that purchased Means of Control from the Licensee and
received the Minister’s approval to be considered a founding shareholder or their
substitute from the date set by the Minister), and are bound by an agreement for the
fulfillment of the provisions of Article 22A of the License (in this Article they will
all be considered “Founding Shareholders or their Substitutes”) shall not be
reduced to less than 26% of each of the Means of Control in the Licensee. |
| 22A.2 |
The
total cumulative holdings of “Israeli Entities”, one or more, that are
considered as one of the Founding Shareholders or their Substitutes, from the total
holdings of Founding Shareholders or their Substitutes as set forth in Article 22A.1
above, shall not be reduced at all times to less than 5% of the total issued share
capital and from each of the Means of Control in the Licensee. For this matter, the
issued share capital of the Licensee shall be calculated by deducting the number of “Dormant
Shares” held by the Licensee. |
| |
“Israeli
Entity”- for an individual-an Israeli citizen or resident of Israel, For a
corporation- a corporation that was incorporated in Israel and an individual that is a
citizen and a resident of Israel, controls the corporation either directly or indirectly,
as long as the indirect control shall be only through a corporation that was incorporated
in Israel, one or more. However, for the matter of indirect holdings, the Prime Minister
and the Minister of Communications may approve holdings through a corporation that has
not been incorporated in Israel, as long as the corporation does not directly hold shares
in the Licensee, and only if they are convinced that this will not derogate from the
provisions of this article. For this matter, “Israeli citizen”- as defined in
the Nationality Law, 5712-1952; “resident”-as defined in the Inhabitants
Registry Law, 5725-1965. |
| |
For
this matter, “Dormant Shares”- as defined in Article 308 of the
Companies Law, 5759-1999. |
9 Amendment
No. 31
10 Amendment
No. 31- Amendment No. 31 will come into effect upon completion of all
of the obligations set forth in article 22A and no later than 30 June
2005, in accordance with the Ministry of Communications document
62/05-4031 dated 13 March 2005
D - 4
| 22A.3 |
At
least one tenth (10%) of the members of the Board of Directors of the Licensee shall be
appointed by the Israeli Entities as set forth in Article 22A.2. Notwithstanding the
above-mentioned, for this matter- if the Board of Directors of the Licensee shall consist
of up to 14 members – at least one director shall be appointed by the Israeli
entities as set forth in Article 22.2A above, if the Board of Directors of the Licensee
shall consist of between 15 and 24 members-at least 2 directors shall be appointed by the
Israeli entities as set forth in Article 22.2A above and so on and so forth. |
| 22A.4 |
The
Licensee’s Board of Directors shall appoint from among its members that have
security clearance and security compatibility to be determined by the General Security
Service (hereinafter: ” Directors with Clearance”) a committee to be designated
“the Committee for Security Matters”, or CSM. |
| |
The
CSM shall consist of at least 4 Directors with Clearance including at least one External
Director. Security matters shall be discussed, subject to Article 22A.5, solely by the
CSM. A resolution that was adopted or an action that was taken by the CSM, shall have the
same effect as a resolution that was adopted or an action that was taken by the Board of
Directors and shall be discussed by the Board of Directors only if necessary in
accordance with Article 22A.5 and subject to Article 22A.5. |
| |
In
this article-“security matters”-as defined in the Bezeq Order (Determination of
Essential Service Provided by “Bezeq”, the Israeli Telecommunications Company
Ltd), 5757-1997, as of March 9, 2005. |
| 22A.5 |
Security
matters that the Board of Directors or the Audit Committee of the Licensee shall be
required to consider in accordance with the mandatory provisions of the Companies Law,
5759-1999, or in accordance with the mandatory provisions of any other law that applies
to the Licensee shall be discussed, if they need to be discussed by the Board of
Directors or the Audit Committee, only in the presence of Directors with Clearance.
Directors that do not have security clearance shall not be allowed to participate in this
Board of Directors or Audit Committee meeting and shall not be entitled to receive
information or to review documents that relate to this matter. The legal quorum for such
meetings shall include only Directors with Clearance. |
| |
The
Licensee may set out in its Articles of Association that an Office Holder, who in the
capacity of his position or based on the provisions of the law or the Articles of
Association, should have received information or participate in security matter meetings
and this was denied him due to Article 22A.5, will be released from any liability for any
claim of breach of duty of care towards the Licensee, if the breach of duty of care was a
result of his or her inability to participate in the meetings or receive information. |
D - 5
| 22A.6 |
The
shareholders at a general meeting shall not be entitled to assume, delegate, transfer or
exercise any of the authorities granted to another organ in the company, regarding
security matters |
| 22A.7 |
(a)
The Minister shall appoint an observer for the Board of Directors and committee meetings,
that has security clearance and security compatibility that will be determined by the
General Security Services. |
| |
(b)
The observer shall be a government employee, qualified to serve as
a director, in accordance with Chapter C of the Government Companies
Law, 5735-1975. |
| |
(c)
In addition, and without derogating from any duty imposed on him by
any law, the observer shall be bound by confidentiality towards the
Licensee, except as the matter may be required to fulfill his
responsibilities as an observer. The observer shall not act as an
observer or in any other capacity for any entity that deals with the
provision of telecommunication services and directly competes with
the Licensee, and shall refrain from any conflict of interest between
his position as an observer and between the Licensee, excluding
conflicts of interest that result from his being a government
employee that is fulfilling his responsibilities as an observer with
the Licensee. The observer shall undertake towards the Licensee not
to serve as an observer or an office holder, and not to fulfill a
position or be employed, directly or indirectly by any entity that
directly competes with the Licensee or has a conflict of interest
with the Licensee, excluding a conflict of interest that results from
his being a government employee that is fulfilling his
responsibilities as an observer with the Licensee throughout the
duration of his position as an observer with the Licensee and for
eighteen months after he completes this term. |
| |
In
any case of a dispute regarding a conflict of interest of the observer, the matter shall
be decided by the State Attorney General or a person on his behalf. |
| |
(d)
Notices to Board of Director and committee meetings, including the
CSM, shall be sent to the observer and he shall be entitled to
participate as an observer in each such meeting. |
| |
(e)
The observer’s entitlement to receive information from the
Licensee, shall be the same as a director. If the Licensee believes
that certain information that is sensitive business information is
not required by the observer in order to fulfill his duties, the
Licensee may delay delivery of such information to the observer and
shall inform him accordingly. If the observer believes that he should
receive such information, the matter shall be decided by the head of the
General Security Services. |
D - 6
| |
(f)
If the observer believes that the Licensee adopted or is about to
adopt a resolution regarding security matters, contrary to the
provisions of the License, contrary to Article 13 of the Law or
contrary to the provisions of Article 11 of the General Security
Services Law, 5762-2002, he shall immediately notify the Licensee in
writing. Such a notice shall be sent to the chairman of the Board of
Directors and to the chairman of the CSM and adequate time shall be
given, under the circumstances of the case, to remedy the breach or
to change the resolution, if possible. |
| 22A.8 |
The
provisions of Article 22A of the License shall be adopted in the Articles of Association
of the Licensee. |
Section C:
Cross-Ownership and Conflict of Interests
| 23. |
Prohibition
of Cross-Ownership |
| 23.1 |
The
Licensee, an Office Holder or an Interested Party in the Licensee, as well as an Office
Holder in an Interested Party in the Licensee, shall not hold, either directly or
indirectly, five percent (5%) or more of any Means of Control in a Competing MRT
Operator, and shall not serve as an Office Holder in a Competing MRT Operator or in an
Interested Party in a Competing MRT Operator; for this matter, “Holding” includes
holding as an agent. |
| 23.2 |
Notwithstanding
the provisions of Paragraph 23.1, the Minister may, based upon written request, permit an
Office Holder in the Licensee to serve as an Office Holder in an Interested Party in a
Competing MRT Operator, or permit an Office Holder in an Interested Party in the Licensee
to serve as an Office Holder in a Competing MRT Operator or in an Interested Party in a
Competing MRT Operator, if he is satisfied, that this will not harm the competition in
MRT Services; the Minister may condition the granting of such permit on conditions that
the Office Holder must fulfill for prevention of harm to the competition as aforesaid. |
| 23.3 |
Notwithstanding
the provisions of Paragraph 23.1, an Interested Party in the Licensee, which is a trust
fund, an insurance company, an investment company or a pension fund, may hold up to ten
percent (10%) of the Means of Control in a Competing MRT Operator, and an Interested
Party in a Competing MRT Operator, which is a trust fund, an insurance company, an
investment company or a pension fund, may hold up to ten percent (10%) of the Means of
Control in the Licensee, provided it does not have a representative or an appointee on
its behalf among the Office Holders of a Competing MRT Operator or of the Licensee, as
the case may be, unless it is required to do so by law. |
| 23.4 |
The
Licensee, an Office Holder or an Interested Party in the Licensee, as well as an Office
Holder in an Interested Party in the Licensee, will not control a Competing MRT Operator,
and will not cause it, by any act or omission, to be controlled by a Competing MRT
Operator or by an Office Holder or an Interested Party in a Competing MRT Operator, or by
an Office Holder in an Interested Party in a Competing MRT Operator, or by a person or
corporation that controls a Competing MRT Operator. |
D - 7
| 23.5 |
The
rate of indirect holding in a corporation will be a product of the percentage of holdings
in each stage of the chain of ownership, subject to what is set out in Paragraph 23.6;
for example: |
| |
(A) |
‘A’ holds
40% in Company ‘B’; |
| |
(B) |
Company
‘B’ holds 40% in Company ‘C’; |
| |
(C) |
Company
‘C’ holds 25% in Company ‘D’; |
| |
(D) |
Therefore,
Company ‘A’ holds, indirectly, 4% of Company ‘D’. |
| 23.6 |
For
the matter of this Paragraph and Paragraphs 14.1 (G) (6), (7), (8), (8a), (9) and 21.4,
if a certain body (hereinafter: “the Controlling Body”) controls another body
that has holdings, directly or indirectly, in the Licensee (hereinafter: “the
Controlled Body”), the Controlling Body, and also any other body controlled by the
Controlling Body, will be attributed with the rate of holdings in the Licensee that the
Controlled Body has, directly or indirectly; according to the following examples: |
| |
(1) |
‘A’ holds
50% in Company ‘B’, and controls it; |
| |
(2) |
Company
‘B’ holds 50% in Company ‘C’, and controls it; |
| |
(3) |
Company
‘C’ holds 10% in the Licensee and does not control it; |
| |
(4) |
Therefore,
notwithstanding that ‘A’s’ holdings in the Licensee in
accordance with the instructions of Paragraph 5.6 are 2.5%, ‘A’ and
also any body controlled by ‘A’ will be deemed as an Interested Party
holding 10% in the Licensee. |
| |
(1) |
‘A’ holds
50% of Company ‘B’ and controls it; |
| |
(2) |
Company
‘B’ holds 40% of Company ‘C’ and controls it; |
| |
(3) |
Company
‘C’ holds 40% of Company ‘D’ and does not control it; |
| |
(4) |
Company
‘D’ holds 40% of the Licensee and does not control it; |
| |
(5) |
Therefore,
‘A’ and any body controlled by ‘A’ will be regarded as
having a holding in the Licensee at the rate of holdings of Company ‘C’ in
the Licensee, which is holdings of 16% (according to the method set out in
Paragraph 23.5 for the calculation of the rate of indirect holdings in the
absence of control), and in this manner, ‘A’ and any body controlled
by ‘A’ is an Interested Party in the Licensee. |
D - 8
| 23.7 |
If
a certain body has indirect holding in the Licensee, through two or more Interested
Parties, then for the purpose of its definition as an Interested Party, and for the
purpose of determining the rate of holding with regard to this Paragraph, the greatest
indirect rate of holding will be taken into account, and also any rate of holding that
derives from the chain of holdings through which the said holding body is attributed with
the holdings of corporations controlled by it in accordance with the provisions of
Paragraph 23.6; the rates of holdings that derive from two or more chains that will be
taken into account as stated above, will be cumulative for the purpose of calculating the
rate of holdings. |
| 23.8 |
The
Minister may, in response to a written request, permit an Interested Party in the
Licensee to hold, either directly or indirectly, five percent (5%) or more in any of the
Means of Control of a Competing MRT Operator, if the Minister is satisfied that this will
not harm competition in the MRT field; 11the Minister may condition the granting of the
said permit on a condition that the Interested Party in the Licensee or competing MRT
Operator is an Interested Party merely by virtue of the provisions of Article 23.6. |
| 24. |
Prohibition
of Conflict of Interests |
| |
The
Licensee, any body in which the Licensee is an Interested Party, an Office Holder in the
Licensee or an Interested Party in the company holding the License or an Office Holder in
an Interested Party therein, will not be party to any agreement, arrangement or
understanding with a Competing MRT Operator, or an Interested Party or an Office Holder
in it, or an Office Holder in an Interested Party in a Competing MRT Operator, or any
other body in which a Competing MRT Operator is an Interested Party, which are intended
to or might reduce or harm competition in anything that pertains to MRT Services, MRT
Terminal Equipment or any other Telecommunications Services. |
11 Amendment
No. 10
D - 9
[THIS DEED OF VOTE IS A
CONVENIENCE TRANSLATION FROM THE BINDING
HEBREW VERSION OF DEED OF VOTE (KTAV HATZBA’A)
REQUIRED BY
ISRAELI LAW]
Date: September 16, 2009
Partner Communications
Company Ltd.
Deed of Vote
Part I
In
accordance with the Companies Regulations (Deeds of Vote and Position Notices) of
2005
Name of the Company: Partner
Communications Company Ltd. (the “Company”).
Type, date and place of meeting:
Extraordinary General Meeting will be held on October 22, 2009 at 10:00 am. (Israel time),
at the Company offices, 8 Ha’amal Street, Rosh Ha’ayin, Israel. The telephone
number for inquiries is #972-54-781-4191.
Pursuant to the Israeli Companies Law
of 1999 (the “Israeli Companies Law”) and the Israeli Companies
Regulations (Deeds of Vote and Position Notices) of 2005 (the “Deed of Vote
Regulations”), shareholders who will not attend the meeting in person may vote
with respect to items no. 1-4 on the agenda by an Hebrew form of deed of vote (ktav
hatzba’a) and these items are subject to provisions set forth in the Israeli
Companies Law and the Deed of Vote Regulations (the “Regulations
Procedure”). For the shareholder’s convenience, items 5-6 on the agenda are
also included in this document although said items are not subject to the Regulations
Procedure.
The items on the agenda,
subject to the Regulations Procedure:
| |
1. |
Approval
of the appointment of Mr. Barry Ben-Zeev (Woolfson) as a new external
director (Dahatz) and approval of his remuneration,
indemnification and insurance. |
The Board of Directors of the Company
has resolved to recommend to the shareholders to appoint Mr. Barry Ben-Zeev (Woolfson) as
an External Director (Dahatz) of the Company for a term of three years from his
appointment.
Mr. Barry Ben-Zeev
(Woolfson) has been providing strategic business consulting services since
2009. He served as the deputy-Chief Executive Officer and Chief Financial
Officer of Bank Hapolaim in 2008. He joined the bank in 1976 and served in a
variety of positions in the branch system and the international division
including New York. He served in the following executive positions prior to
becoming Deputy-Chief Executive Officer and Chief Financial Officer;
Deputy-Chief Executive Officer, Head of International Private Banking during
the years 2002-2006 and Deputy – Chief Executive Officer and Head of
Client Asset Management during the years 2006-2007. He also served as a member
of the Board of Directors of the Tel-Aviv Stock Exchange during the years
2006-2007 and as the Chairman of Bank Hapolaim Switzerland and Poalim Asset
Management during the years 2002-2006. He received his Bachelor’s degree
in Economics and his Masters in Business Administration from Tel-Aviv
University.
To the best knowledge of the Company
and the Company’s Directors, Mr. Barry Ben-Zeev (Woolfson) is not a “Family
Member” (as defined in the Securities Act of 1968) of another “Interested
Party” (as defined in clause (1) of the definition in the Securities Act of 1968) in
the Company.
Mr. Ben-Zeev (Woolfson)
was determined by the Board of Directors to be one of the “accounting and
financial experts” under the Israeli Companies Law and regulations
promulgated thereunder and qualifies as an independent director according to
U.S. law.
The Company wishes to remunerate Mr.
Ben-Zeev (Woolfson) according to the “relative method” of remuneration under the
Compensation Regulations (Rules for the Compensation and Expenses for an External
Director), 2000, as amended (the “Compensation Regulations”), by paying
Mr. Ben-Zeev (Woolfson) the same remuneration that the Company pays its two “other
directors” (Messrs. Galil and Gissin) and its other External Director (Dr. Michael
Anghel). Therefore, the Company wishes to pay Mr. Ben-Zeev (Woolfson), commencing
from his appointment, an annual fee of NIS180,000 per annum and an attendance fee
of NIS4,000 per meeting, applicable from the fifth meeting per year (whether participating
in person, by means of communication, or in writing), linked to the Israeli Consumer Price
Index published for December 2007, but in any event no less than an aggregate amount per
annum equal to US$50,000 as previously approved by the shareholders (the
“Remuneration”) plus reimbursement of certain expenses.
The shareholders of the Company have
resolved in 2008 that, in the event options will be granted to Company’s directors,
the Company will grant options to the External Directors in a manner complying with the
Compensation Regulations. Such resolution will apply to Mr. Ben-Zeev (Woolfson).
The Audit Committee and the Board of
Directors approved in the event of Mr. Ben-Zeev (Woolfson)‘s appointment: (i) the
Remuneration of Mr. Ben-Zeev (Woolfson), and the reimbursement of expenses to him as set
forth in the Compensation Regulations; and (ii) that Mr. Ben-Zeev (Woolfson) will benefit
from the current D&O insurance policy of the Company and, in the event that either
item 4 or 5 below is approved, such resolution will apply to him.
| |
It
is proposed that at the EGM the following resolutions be adopted: |
| |
(i) |
“RESOLVED,
to appoint Mr. Ben-Zeev (Woolfson) as an External Director (Dahatz) of
the Company, for a term of three years, in accordance with the Israeli
Companies Law, commencing at the close of the EGM, or at 28 October, 2009,
if the amendment of the Company’s Articles of Association under item
6 below is approved. |
- 2 -
| |
(ii) |
RESOLVED,
to approve the payment of the Remuneration and the reimbursement of
expenses as set forth in the Compensation Regulations to Mr. Ben-Zeev
(Woolfson). In the event that options will be granted to Company
directors, the Company will grant options to Mr. Ben-Zeev (Woolfson) in a
manner complying with the Compensation Regulations. Mr. Ben-Zeev
(Woolfson) will benefit from the current D&O insurance policy of the
Company and, in the event that either resolution 4 or 5 below is approved,
such resolution will apply to Mr. Ben-Zeev (Woolfson). |
| |
(iii) |
RESOLVED,
that these resolutions are in the best interest of the Company”. |
| |
2. |
A
Conditional approval of a “Run-Off” Insurance Policy for
Directors and other Office Holders of the Company. |
The Israeli Companies Law and the
Company’s Articles of Association authorize the Company to enter into an insurance
contract, and/or arrange and pay all premiums in respect of an insurance contract, for the
insurance of the liability of directors and other Office Holders (as defined in the
Israeli Companies Law) of the Company for liabilities he or she incurs as a result of a
direct or indirect action or inaction undertaken by such person (or together with other
directors or officers of the Company) in his or her capacity as a director or officer of
the Company with respect to matters permitted under the Israeli Companies Law.
Currently, the Company participates
in a Directors’ and Officers’ Liability Insurance Policy procured by the
Company’s indirect controlling shareholder, Hutchison Telecommunications
International Limited and its participating subsidiaries, including the Company, as
described in the Proxy Statement distributed with this Deed of Vote.
Upon consummation of the agreement
entered into on August 12, 2009 between Advent Investments Pte Ltd.
(“Advent”) and Scailex Corporation Ltd. (“Scailex”), for
the acquisition by Scailex of 78,940,104 Ordinary Shares of the Company (the
“Change of Control Transaction”), the current D&O policy will cease
to apply to our directors and officers.
The Company wishes to conditionally
adopt a “Run-Off” insurance policy (the “Run-Off Policy”) of up
to US $100 million insurance cover for liability of the Company’s directors, officers
and employees acting in their managerial and/or supervisory capacity for acts,
errors or omissions carried out or suffered prior to the date of closing of the
Change of Control Transaction, for a period of seven years from the consummation of the
Change of Control Transaction and cancellation of Current D&O Policy. The net premium
to be paid by the Company for such cover for the said seven year period, after deducting a
pro-rata cancellation premium refund, shall not exceed U.S. $200,000.
The Audit Committee and the Board of
Directors have approved, conditionally, the Run-Off Policy and resolved that the Run-Off
Policy is in the best interest of the Company.
The Directors have noted that they
all have a Personal Interest (as defined in the Israeli Companies Law) in this matter.
- 3 -
| |
It
is proposed that at the EGM the following resolutions be adopted: |
| |
(i) |
“RESOLVED,
to approve the Run-Off Policy and the payment of a net premium
therefor in an amount not exceeding U.S. $200,000, which shall become
effective on, and be subject to, the consummation of the Change of
Control Transaction. |
| |
(ii) |
RESOLVED, that
the resolution is in the best interest of the Company.” |
| |
3. |
A
Conditional approval of a Registration Right Agreement. |
According to the existing
Registration Rights Agreement of October 26, 1999 (the “Existing RRA”),
the Company has granted its then principle founding shareholders a right to require the
Company to register Ordinary Shares held by them under the US Securities Act of 1933 (the
“US Securities Act”). In the Existing RRA, upon request from any of the
principle shareholders (the “Demand Right”), the Company will file a
registration statement under the US Securities Act to register the Ordinary Shares held
by them, subject to a maximum request of one Demand Right in any six-month period and to
certain other limitations. There is no limit to the number of registrations that can be
requested under the Existing RRA. The minimum amount of shares that must be included in
any registration that can be requested under the Existing RRA is 2.65% of the outstanding
shares. The Company has also granted to each of the principle shareholders the right to
include their Ordinary Shares in the registrations made by the Company.
The Existing RRA also provides that
the Company will: (i) indemnify each selling shareholder and any underwriters against any
liability arising as result of a material misstatement in, or omission from, the
registration statement; and (ii) undertake certain other actions, as described in the
Proxy Statement to which this Deed of Vote is attached.
The Existing RRA will terminate with
respect to each shareholder upon the earlier of October 26,2009 and such time
as that shareholder can sell its Ordinary Shares into the United States public market
pursuant to an exemption from the registration requirements of the US Securities Exchange
Act of 1934, without regard to holding period, volume or manner of sale limitations.
It is proposed that the Company will
enter into a new conditional registration rights agreement (the “Proposed RRA”)
with Scailex. The terms and conditions of the Proposed RRA shall be substantially similar
to those of the Existing RRA, except that: (i) October 26, 2009 shall be substituted by a
date which is five years from the consummation of the Change of Control Transaction; and
(ii) other changes annotated on Annex “A” of the Proxy Statement
distributed with this Deed of Vote.
The Audit Committee and the Board of
Directors of the Company conditionally approved the Proposed RRA and resolved that the
Proposed RRA is in the best interest of the Company since it will help to facilitate an
orderly disposal of shares by the shareholder who will become a beneficiary of the
Proposed RRA in consultation and coordination with the Company and will allow the Company
to regulate disposals by such a shareholder during “blackout” periods as well
as when the Company offers shares in the market.
- 4 -
The Directors have noted that the
directors nominated by Advent shall be deemed, for the sake of being cautious, to have a
Personal Interest (as defined in the Israeli Companies Law) in this matter.
| |
It
is proposed that at the EGM the following resolutions be adopted: |
| |
(i) |
“RESOLVED,
to approve the Proposed RRA, which shall become effective on, and be
subject to, the consummation of the Change of Control Transaction. |
| |
(ii) |
RESOLVED,
that the resolution is in the best interest of the Company.” |
| |
4. |
Approval
of the grant of Indemnification Letters to Directors of the Company. |
The Israeli Companies Law and the
Company’s Articles of Association authorize the Company, subject to the required
approvals, to indemnify directors and other Office Holders (as defined in the Israeli
Companies Law) of the Company for liabilities or expenses he or she incurs as a result of
action or inaction undertaken by such person (or together with other directors or
officers of the Company) in his or her capacity as a director or officer of the Company
for certain liabilities, as described in the Proxy Statement distributed with this Deed
of Vote.
The Company wishes to issue to all
current and future directors of the Company, serving the Company, or serving as directors
or officers on behalf of the Company in other companies, (each an “Indemnified
Person”), a new indemnification letter (the “Indemnification Letter”)
substantially in the form attached as Annex “B” to the Proxy Statement
distributed with this Deed of Vote. The aggregate indemnification amount payable by the
Company to all the directors, officers and other indemnified persons pursuant to all
letters of indemnification issued or that may be issued to them by the Company in the
future will not exceed the higher of (i) 25% of shareholders equity and (ii) 25% of
market capitalization, each as measured at the time of indemnification.
For the avoidance of doubt, in the
event that at the EGM the resolution below will not be adopted, the current
indemnification letters granted to any Indemnified Person shall remain in full force and
effect.
The Audit Committee and the Board of
Directors of the Company have approved the grant of the new Indemnification Letter to the
Indemnified Persons.
The Directors have noted that they
all have a Personal Interest (as defined in the Israeli Companies Law) in this matter.
- 5 -
| |
It
is proposed, in accordance with the Israeli Companies Law and the Company’s Articles
of Association, that at the EGM the following resolution be adopted: |
| |
(i) |
“RESOLVED,
to approve the Company’s undertaking to indemnify each
Indemnified Person, and to provide each such Indemnified Person with an
Indemnification Letter substantially in the form attached [to the
Proxy Statement] as Annex “B.” |
| |
(ii) |
RESOLVED,
that the resolution is in the best interest of the Company.” |
For the
Shareholders’ convenience, below are the items on the agenda, not subject to the
Regulations Procedure:
| |
5. |
A
conditional approval of a new “D&O” insurance policy (to be
entered into at a later date) to Directors and Officers of the Company;
and |
| |
6. |
Amendment
of certain provisions in the Company’s Articles of Association. |
For further details in respect of the
items above and the complete wording of the proposed resolutions, kindly see the Proxy
Statement distributed with this Deed of Vote by the Company on September 16, 2009.
Place and time for
review of the full wording of the proposed resolutions:
The Proxy Statement, distributed with
this Deed of Vote, contains the full text of the proposed resolutions and will be
available for review at the Company offices, 8 Ha’amal Street, Rosh Ha’ayin,
Israel, Sunday-Thursday, from 9a.m. to 5p.m. (Israel time) following coordination at
telephone number +972-54-7814191, until the time of the General Meeting, convened to
approve the items on the agenda. In addition, the Proxy Statement is available on the
websites: www.magna.isa.gov.il and www.maya.tase.co.il; and on the U.S.
Securities and Exchange Commission’s EDGAR System
http://www.sec.gov/edgar.shtml. The Proxy Statement includes additional information
on the content of this Deed of Vote and it is important that the shareholders will also
review it.
The required majority
for each of the items on the agenda:
The vote of the holders of a majority
of the Ordinary Shares participating at the EGM and voting on the matter is required for
the approval of the item covered by the Regulations Procedure (item 1); provided, that one
of the following conditions is fulfilled: (i) the majority of votes in favor of the matter
shall include at least one-third of the votes of shareholders not constituting, or acting
on behalf of, “Controlling Parties” (as stated in the Israeli Companies Law) in
the Company, which votes shall not include abstaining votes; (ii) the total number of
objecting votes of the shareholders mentioned in clause (i) does not exceed 1% of the
total voting rights in the Company.
The vote of the holders of a majority
of the Ordinary Shares participating at the EGM and voting on the matter is required for
the approval of the items covered by the Regulations Procedure (items 2-4); provided, that
one of the following conditions is fulfilled: (i) the majority of votes in favor of the
matter shall include at least one-third of the votes of shareholders not having a Personal
Interest (as defined in the Israeli Companies Law) in the approval of the transaction,
which votes shall not include abstaining votes or; (ii) the total number of objecting
votes of the shareholders mentioned in clause (i) does not exceed 1% of the total voting
rights in the Company.
- 6 -
The vote of holders of a majority of
Ordinary Shares is required for the approval of item no 5, to which the Regulations
Procedure does not apply.
The vote of the holders of seventy
five percent (75%) of the Ordinary Shares is required for the approval of item no 6, to
which the Regulations Procedure does not apply.
Notice of disclosure in
respect of Personal Interest and Controlling Interest in the Company and Restrictions under the License:
In the second part of this Deed of
Vote there is a designated space for marking and detailing whether the shareholder is, or
is acting on behalf of, a “Controlling Party” (as stated in the Israeli
Companies Law). If a shareholder does not so mark or detail, the shareholder’s vote
shall not be counted in respect of item no. 1 on the agenda.
In the second part of this Deed of
Vote there is a designated space for marking and detailing whether a personal interest
exists in the resolution as set in Section 275 of the Israeli Companies Law. If a
shareholder does not so mark or detail, the shareholder’s vote shall not be counted
in respect of items no. 2-4 on the agenda.
Each shareholder is also required to
indicate if any of the shareholder’s holdings in Partner or vote requires the consent
of the Minister of Communications pursuant to Partner’s License (as defined below).
If a shareholder does not so mark, the shareholder’s vote shall not be counted.
Validity of the Deed of
Vote:
Deed of Vote submitted by
shareholders who hold their shares through a member in the Tel- Aviv Stock Exchange (the
“Exchange”) will be valid only if accompanied by an ownership
certificate. Deed of Vote submitted by registered shareholders shall be valid only if
accompanied by a copy of I.D., passport or incorporation certificate.
A Deed of Vote shall be
submitted to the Company or mailed by registered mail, so it arrives to the
Company’s office no later than seventy two hours prior to the time of the
meeting.
The Company’s
address for submission of Deeds of Vote and Position Notices is:
Vice President – Legal and
Regulatory Affairs and Joint Company Secretary, Partner Communications Company Ltd., 8
Ha’amal Street, Rosh Ha’ayin, 48103 Israel (kindly mark clearly “deed of
vote” or “position paper” on the envelope).
The deadline for
submission of Position Notices and the Board’s response to such Notices are:
The deadline for submission of
Position Notices by the shareholders in respect of items no. 1-4 in the agenda is: October
3, 2009.
- 7 -
The deadline for submission of the
Board of Directors’ response to Position Notices is: October 9, 2009.
The Deed of Vote and
Position Notices (if any) are available at the following websites:
Israel Securities
Authority website: www.magna.isa.gov.il
Tel Aviv Stock Exchange
website: www.maya.tase.co.il
U.S.
Securities and Exchange Commission’s EDGAR System (only a convenience
translation into English): http://www.sec.gov/edgar.shtml
Receipt of ownership
certificates, Deeds of Vote and Position Notices:
A shareholder, whose shares are being held
through a stock exchange member, is entitled to receive the ownership certificate in the
branch of that stock exchange member or by the mail, if the shareholder requested. Such
request shall be made in advance for a particular securities account.
A shareholder, whose shares are being
held through an Exchange member, is entitled to receive from the stock exchange member who
holds the share in the shareholder’s behalf, by e-mail, with no charge, a link to the
text of Deed of Vote and to the Position Notices posted on the Israel Securities Authority
website, unless the shareholder notified the Exchange member that the shareholder is not
interested in receipt of such link or is interested in receipt of Deeds of Vote by mail
(for consideration). Shareholder’s notice in respect of Deeds of Vote shall apply to
Position Notices as well.
One or more shareholders holding
shares conferring in the aggregate at least five percent of the Company’s voting
rights and shareholders holding the same rate of the Company’s voting rights not held
by the Company’s Controlling Party (as stated in Section 268 of the Israeli Companies
Law), are entitled to review the Deeds of Votes as detailed in Regulation 10 of the Deeds
of Vote Regulations.
As of September 13, 2009 the amount
of shares equivalent to five percent of the Company’s voting rights is: 7,703,349
Ordinary Shares NIS 0.01 par value each.
As of September 13, 2009, the amount
of shares equivalent to five percent of the Company’s voting rights not held by the
Company’s Controlling Party (as stated in Section 268 of the Israeli Companies Law)
is: 3,756,343 Ordinary Shares NIS 0.01 par value each.
Marking of Vote in the
Deed of Vote:
Shareholder shall mark the
shareholder’s vote regarding each item on the agenda, to which the Regulations
Procedure applies (items 1-4), in the second part of this Deed of Vote.
- 8 -
Partner Communications
Company Ltd.
Date: _______ __, 2009
Deed of Vote
Part II
In
accordance with Regulation 5(a) of the Companies Regulations (Deeds of Vote and
Position
Notices) of 2005
Name of the Company: Partner
Communications Company Ltd. (the “Company”)
The Company’s address
(for submitting and sending Deeds of Vote and Position Papers): Vice President –
Legal and Regulatory Affairs and Joint Company Secretary, Partner Communications Company
Ltd., 8 Ha’amal Street, Rosh Ha’ayin, 48103 Israel (kindly mark clearly
“deed of vote” or “position paper” on the envelope)
Company’s
registration number: 52-004431-4
Time of the meeting: Thursday,
October 22, 2009 at 10:00 Israel time.
Type of meeting: Extraordinary general
meeting
The Record Date: September 23, 2009
Note:
In parallel to distribution of this
Deed of Vote, a Hebrew version of a Deed of Vote (ktav hatzba’a) per Israeli
requirements will be distributed among the shareholders. The shareholders are requested to
send only one version of a Deed of Vote (an English version or a Hebrew version, but not
both). If both versions will be sent by shareholders, in case of contradiction between the
two versions (as determined by the Company’s secretary), the vote shall be
disqualified.
Shareholder's Details:
Name of
shareholder:_______________________________________
I.D. number:______________________________________________
In case the shareholder does not hold an Israeli I.D.:
Passport number:__________________________________________
The country issuing the passport:_________________
In effect until:____________________________________________
In case the shareholder is an entity:
Entity registration number:_______________________________
Country of organization:___________________________________
- 9 -
| Item No.
|
Subject of the Resolution
|
Votea
|
In respect of
appointment of
External Director
(section 239(b)) of the
Israeli Companies
Law - do you have a
“controlling party”
interestb?
|
| |
|
For
|
Against
|
Abstain
|
Yesc
|
No
|
| 1)
|
Approval of the appointment of Mr. Barry Ben-Zeev
(Woolfson) as a new external director (Dahatz) and approval of his remuneration, indemnification and
insurance.
This item is subject to the Regulations Procedure.
|
|
|
|
|
|
| |
|
|
|
|
In respect of transaction's approval pursuant sections 255 and
275 of the Israeli Companies Law - do you have a “personal interest” in the resolutiond?
|
| 2)
|
A conditional approval of a “Run-Off” insurance policy for directors and other office holders of the Company.
This item is subject to the Regulations Procedure.
|
|
|
|
|
|
| 3)
|
A conditional approval of a registration rights
agreement (to be entered into at a later date) by and between the Company and Scailex Corporation Ltd.
This item is subject to the Regulations Procedure.
|
|
|
|
|
|
| 4)
|
Approval of a grant of Indemnification Letters to
directors of the Company.
This item is subject to the Regulations Procedure.
|
|
|
|
|
|
| 5)
|
A conditional approval of a new “D&O” insurance policy (to be entered into at a later date).
This item is not subject to the Regulations Procedure.
|
|
|
|
Irrelevant
|
| 6)
|
Approval of amendments of certain provisions in the
Company’s Articles of Association.
This item is not subject to the Regulations Procedure.
|
|
|
|
Irrelevant
|
- 10 -
Regarding the resolution on item no.
1, why do I have a “Controlling Party” Interest in the Company?
Regarding the resolutions on items
no. 2-4, why do I have a “Personal Interest” in the resolutions?
Deeds of Vote submitted by
shareholders who holds their shares through an Exchange member (under section 177(1) of
the Israeli Companies Law) will be valid only if accompanied by an ownership certificate.
Deeds of Vote submitted by
shareholders registered in the Company’s Shareholders Register will be valid only if
accompanied by a copy of I.D., passport or organization certificate.
You must mark one of the
following two boxes (if an X is not marked in either column, or if an X is marked in both
columns, the vote shall be disqualified)e:
| o
|
I,
the undersigned, hereby declare that either my holdings or my vote requires the consent
of the Minister of Communications pursuant to Sections 21 (Transfer of Means of Control)
or 23 (Prohibition of Cross-Ownership) of the Company’s General License for the
Provision of Mobile Radio Telephone Services using the Cellular Method in Israel dated
April 7, 1998 (the “License”). |
| o
|
I, the
undersigned, hereby declare that neither my holdings nor my vote, require the consent of
the Minister of Communications pursuant to Sections 21 (Transfer of Means of Control) or
23 (Prohibition of Cross-Ownership) of the License. |
- 11 -
For your convenience, a translation
of sections 21-24 to the License is attached as Annex “D” to the Proxy
Statement distributed with this Deed of Vote.
|
|
——————————————
Signature
Name (Print): ______________
Title : ____________________
Date : ____________________ |
a If an X is
not marked in either column, or if an X is marked in more than one column, the
vote shall be considered as an abstention on the relevant item.
b Kindly
provide details regarding the nature of your being, or acting on behalf of, a
“Controlling Party” in the Company at the designated space below. The
Israeli Companies Law refers for the definition of “Control” to
Section 1 of the Israeli Securities Law of 1968, defining “Control” as
the ability to direct the activity of a company, except for ability stemming
only from being a director or holding another position in that company, and it
is presumed that a person or entity is controlling a company if said person or
entity “holds” (as defined therein) at least half of (i) the right to
vote in the shareholders general meeting; or (ii) the right to appoint the
directors or the general manager of that company.
c If an X is
not marked in either column, or if an X is marked in the “Yes” column
and the shareholder does not provide detail, the vote shall be disqualified.
d Kindly
provide details regarding the nature of the personal interest in the resolution
at the designated space below. “Personal Interest” is defined in
Section 1 of the Israeli Companies Law as a person’s personal interest in
an act or a transaction of a company, including, without limitation, the
personal interest of said person’s relative and of another entity in which
said person or said person’s relative is an interested party, excluding a
personal interest that stems from the fact of holding shares in the company.
e In the event
that the shareholder is an “Interested Party”, as defined in the
License, voting in a different manner with respect to each part of the
shareholder’s Ordinary Shares, a separate Deed of Vote should be filed for
each quantity of Ordinary Shares in respect of which the shareholder intends to
vote differently.
- 12 -
DEED OF AUTHORIZATION
| To: |
Partner
Communications Company Ltd. (the "Company") |
| Attn: |
Roly
Klinger, Vice President - Legal and Regulatory Affairs and Joint Company Secretary |
Re: Extraordinary
General Meeting of Shareholders to be held on
Thursday, October 22,
2009 (the “Meeting”)
I, the undersigned1
_________________________, (Identification No./Registration No. _________), of
____________________________________________, being a registered holder of
______________________2 Ordinary Shares, par value NIS 0.01 per share
(“Ordinary Shares”), of the Company, hereby authorize
_______________________, Identification No. _______________3, to participate
and vote in my stead and on my behalf at the Meeting and in any adjournment of the Meeting
of the Company, until I shall otherwise notify you.
I declare and detail in the
designated space below whether I have a Controlling Party interest4 in the
resolution on item 1 on the agenda, and whether I have a Personal Interest5
in the resolutions on item 2-4 on the agenda:6
| Item No. |
Subject of the Resolution |
Yes7 |
No |
| (1) |
Approval of the appointment of Mr. Barry Ben-Zeev (Woolfson) as a new external director (Dahatz) and approval of his remuneration, indemnification and insurance. |
|
|
| (2) |
A conditional approval of a "Run-Off" insurance policy for directors and other office holders of the Company. |
|
|
| (3) |
A conditional approval of a registration rights agreement (to be entered into at a later date) by and between the Company and Scailex Corporation Ltd. |
|
|
| (4) |
Approval of a grant of Indemnification Letters to directors of the Company. |
|
|
| (5) |
A conditional approval of a new "D&O" insurance policy (to be entered into at a later date). |
Irrelevant |
| (6) |
Approval of amendments of certain provisions in the Company's Articles of Association. |
Irrelevant |
1
Name of shareholder.
2
A shareholder is entitled to give several Deeds of Authorization, each of which
refers to a different quantity of Ordinary Shares of the Company held by the
shareholder, so long as the shareholder shall not give Deeds of Authorization
with respect to an aggregate number of Ordinary Shares exceeding the total
number the shareholder holds.
3
In the event that the proxy does not hold an Israeli Identification number,
indicate a passport number, if any, and the name of the country which issued the
passport.
4
Kindly provide details regarding the nature of your being, or acting on behalf
of, a “Controlling Party” in the Company, at the designated space
below. The Israeli Companies Law of 1999 refers for the definition of
“Control” to Section 1 of the Israeli Securities Law of 1968, defining
“Control” as the ability to direct the activity of a company, except
for ability stemming only from being a director or holding another position in
that company, and it is presumed that a person or entity is controlling a
company if said person or entity “holds” (as defined therein) at least
half of (i) the right to vote in the shareholders general meeting; or (ii) the
right to appoint the directors or the general manager of that company.
5
Kindly provide details regarding the nature of the personal interest in the
resolution, at the designated space below. “Personal Interest” is
defined in Section 1 of the Israeli Companies Law as a person’s personal
interest in an act or a transaction of a company, including, without limitation,
the personal interest of said person’s relative and of another entity in
which said person or said person’s relative is an interested party,
excluding a personal interest that stems from the fact of holding shares in the
company
6
If an X is not marked in either column, or if an X is marked in both columns,
the vote in respect of this item shall be disqualified.
7
Kindly provide details at the designated space below regarding (i) the nature of
your being, or acting on behalf of, a “Controlling Party” in the
Company (with respect to item 1); or (ii) your “Personal Interest”
(with respect to items 2-4).
Regarding the resolution on item no.
1, why do I have a “Controlling Party” Interest in the Company?
Regarding the resolutions on items
no. 2-4, why do I have a “Personal Interest” in the resolutions?
I declare the
following8:
| |
I,
the undersigned, hereby declare that either my holdings or my vote requires the consent of
the Minister of Communications pursuant to Sections 21 (Transfer of Means of Control) or
23 (Prohibition of Cross-Ownership) of the Company’s General License for the
Provision of Mobile Radio Telephone Services using the Cellular Method in Israel dated
April 7, 1998, as amended (the “License”)9. |
| |
I,
the undersigned, hereby declare that neither my holdings nor my vote, require the consent
of the Minister of Communications pursuant to Sections 21 (Transfer of Means of Control)
or 23 (Prohibition of Cross-Ownership) of the License. |
|
|
|
|
|
|
|
|
|
|
| Date: _____________ |
_______________________________________ |
|
Signature |
| |
| |
Name: _________________ |
| |
Title: __________________ |
8
If an X is not marked in either box, or if an X is marked in both boxes, the
shareholder’s vote at the Meeting shall be disqualified. In the event that
the shareholder is an “Interested Party,” as defined in the License,
voting in a different manner with respect to each part of the shareholder’s
Ordinary Shares, a separate Deed of Authorization should be filed for each
quantity of Ordinary Shares in respect of which the shareholder intends to vote
differently.
9
A translation of sections 21-24 of the License is attached as Annex
“D” to the Proxy Statement distributed with this Deed of
Authorization.
2
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this Current Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
|
Partner Communications Company Ltd.
By: /s/ Emanuel Avner
——————————————
Emanuel Avner
Chief Financial Officer |
Dated: September 16, 2009