The
Board of Directors recommends a vote FOR approval of these proposed resolutions
ITEM 2 –
AMENDMENTS TO THE COMPANY’S 2004 SHARE OPTION PLAN
The
Company has adopted on July 12, 2004, the 2004 Share Option Plan and has amended it in
2008 (the “Option Plan”). The Compensation Committee, the Audit
Committee and the Board of Directors have respectively approved on February 19, 2009,
February 22, 2009 and February 23, 2009, certain amendments to the Option Plan, as
described below. The Company is seeking shareholders approval for these amendments.
The
Option Plan is intended to promote the interests of the Company and its shareholders by
providing employees, directors, officers and advisors of the Company with appropriate
incentives and rewards to encourage them to enter into and continue in the employ of, or
service to, the Company and to acquire a proprietary interest in the long-term success of
the Company.
The
exercise price of options granted under the Option Plan is determined by the Board of
Directors’ committee administering the Option Plan (the “Committee”),
which takes into consideration the fair-market value of the Ordinary Shares at the time
of grant (as specified in the Option Plan). The options shall generally become vested
over a four-year period, unless otherwise set by the Committee. The exercise period of an
option is determined by the Committee and will not exceed ten years from the grant date
thereof. The Option Plan shall terminate on July 11, 2014, after which no further options
may be issued but the provisions of the Option Plan shall remain in full force and effect
to the extent necessary to give effect to the exercise of any options granted or
exercised prior thereto or otherwise as may be required in accordance with the provisions
of the Option Plan.
As
of March 11, 2009, after reflecting the grant of options which is currently in process,
5,762,764 options were available for grant under the Option Plan.
The
Company wishes to amend the Option Plan (the “Plan Amendments”) to
include terms allowing dividend adjustments on option exercise price, which were
determined by the Compensation Committee, the Audit Committee and the Board of Directors
to be customary in the Israeli market, and provisions that the Company would like to
include enabling it to require option holders to exercise options only through a cashless
exercise mechanism, in each case, as detailed below:
(i)
(A) with respect to options granted on or after February 23, 2009, the date of
approval of the Plan Amendments by the Board of Directors (the “Board
Approval”), a dividend-adjustment mechanism, reducing the exercise
price of such options following each dividend distribution in the ordinary
course meeting the criteria substantially as set forth in Section 8.1 of the
form of the amended Option Plan attached hereto as Annex “A”;
and (B) with respect to all options granted under the Option Plan, following
each dividend distribution other than in the ordinary course, a dividend
adjustment, reducing the exercise price by an amount determined by the Board of
Directors; and
8
(ii)
with respect to options granted on or after the
Board Approval date, provisions authorising the Board of Directors to allow option
holders to exercise their vested options during a fixed period, only through a cashless
exercise procedure, pursuant to which each vested option will entitle its holder to the
right to purchase Ordinary Shares (subject to the adjustments), in accordance with the
specified cashless formula referred to in Section 8.6 of the form of the Option Plan
including the proposed Plan Amendments, attached hereto as Annex “A” and
to fine-tune said cashless formula;
The
foregoing description is only a summary and is qualified in its entirety by reference to
the full text of the Plan Amendments annotated in the amended Option Plan attached hereto
as Annex “A”.
The
Compensation Committee, the Audit Committee and the Board of Directors noted that, in
accordance with the Option Plan, certain amendments are subject to the approval of the
shareholders of the Company.
The
Company’s Compensation Committee, Audit Committee and Board of Directors have noted
that having an attractive option plan has value both as an incentive as well as a
retention tool, since it would encourage the Company’s team to develop and enhance
the Company’s business and also would encourage others to join the Company. The
Company’s Compensation Committee, Audit Committee and Board of Directors have also
noted that recruiting the top and best people to join the Company is and was key to
maintaining the Company’s leading position in the market and, therefore, is in the
best interest of the Company.
The
Company’s Compensation Committee, Audit Committee and Board of Directors are of the
opinion that it is in the Company’s interest to adopt the Plan Amendments.
It
is currently considered to allocate options to the Company’s “other directors” and
External Directors and, hence, Messrs Galil, Gissin, Vidman and Anghel may be considered
as having a personal interest in this resolution. Each of the Compensation Committee, the
Audit Committee and the Board of Directors has noted the personal interest of the
respective Directors, has resolved to approve and to recommend to the shareholders of the
Company for approval the Plan Amendments and has resolved that the abovementioned
resolutions are in the best interest of the Company.
The
Plan Amendments are to be brought to the approval of the Company’s shareholders and,
to the Company’s understanding, the Plan Amendments are brought to the respective
approval of the shareholders of Hutchison Telecommunications International Limited and
Hutchison Whampoa Limited (both companies having their respective shares listed on the
Stock Exchange of Hong Kong) according to the requirements of The Stock Exchange of Hong
Kong Limited (such approvals, collectively, the “HK Approvals”) and are
also subject to certain Israeli regulatory approvals (such regulatory approvals,
collectively with the HK Approvals, the “Required Approvals”); and,
hence, the Plan Amendments will enter into force only after, and are subject to, the
Company’s shareholders approval and the Required Approvals.
9
Subject
to obtaining all requisite approvals (the Company’s shareholders and the Required
Approvals), the Plan Amendments are, under their terms, supposed to apply to options
granted by the Company after the Board Approval date but prior to the date of obtaining
all such approvals (with effect as of the date of grant thereof).
It
is proposed that at the EGM the following resolutions be adopted:
| |
(i) |
“RESOLVED,
that the Plan Amendments, substantially annotated in the form attached hereto as Annex
“A”, are hereby approved. |
| |
Without
limiting the generality of the foregoing resolutions: |
| |
(A) to approve a dividend adjustment mechanism in
the Option Plan substantially stating that (I) only with respect to options
granted on or after the Board Approval date, at any time after the grant of
such options, that the Company distributes cash dividends in the ordinary
course, with respect to all of its issued and outstanding Ordinary Shares, in
an amount in excess of 40% (forty percent) or of another percent resolved by
the Board of Directors, of the Company’s net income for the relevant
period (the “Excess Dividend”), and the record date for
determining the right to receive such dividends is earlier than the exercise
date of such options, then the option exercise price (as adjusted from time to
time) for each Ordinary Share underlying an option (granted on or after the
Board Approval date and whether vested or not as at the relevant record date),
not exercised prior to such record date, shall be reduced , ipso facto,
as at such record date, by an amount equal to the gross amount of the Excess
Dividend per Ordinary Share; and (II) at any time that the Company distributes
cash dividends other than in the ordinary course, with respect to all of its
issued and outstanding Ordinary Shares, and the record date for determining the
right to receive such dividends is earlier than the exercise date of options
granted under the Option Plan, then the option exercise price (as adjusted from
time to time) for each Ordinary Share underlying an option (whether vested or
not), not exercised prior to such record date, shall be reduced, as at such
record date, by an amount which the Board of Directors considers as reflecting
the impact such distribution will have or will likely to have on the trading
price of the Ordinary Shares; provided that (i) the Board of Directors’ determination
of any adjustments shall be final and conclusive on all option holders; (ii)
the amount of adjustment shall not exceed the amount of such cash distribution
per Ordinary Share; and (iii) any adjustment provided for in this paragraph
shall be cumulative to any other adjustments contemplated under the immediately
preceding paragraph or approved by the shareholders of the Company in general
meeting. |
| |
The
option exercise price shall not be reduced to less than the par value of an Ordinary
Share; and |
10
| |
(B)
approve the inclusion in the Option Plan of provisions determining
substantially that the Board of Directors of the Company may, at its
discretion, resolve from time to time, with respect to any or all options
granted after the Board Approval date, to allow option holders to exercise
their vested options during a fixed period only through a cashless exercise
procedure, pursuant to which each vested option will entitle its holder to the
right to purchase Ordinary Shares (subject to adjustments), in accordance with
the cashless formula referred to in Section 8.6 of the form of the amended
Option Plan attached hereto as Annex “A” and
to fine-tune said cashless formula; |
| |
(ii) |
RESOLVED,that
the Plan Amendments will enter into force after, and are subject to, the Required
Approvals; and |
| |
(iii) |
RESOLVED,that
the abovementioned resolutions are in the best interest of the Company. |
The
affirmative vote of the holders of a majority of the Ordinary Shares participating at the
EGM, in person or by proxy, and voting on the matter is required for the approval
thereof.
The
Board of Directors recommends a vote FOR approval of these proposed resolutions.
RESTRICTIONS ON VOTING
RIGHTS
Partner
conducts its operations pursuant to licenses granted to Partner by the Minister of
Communications of the State of Israel. Partner’s Articles of Association and, with
respect to shareholders other than shareholders of Partner prior to its public offering,
Partner’s License contain provisions that may cause the suspension of voting rights
of the holders of Ordinary Shares or ADSs if such voting rights would breach the
ownership limits contained in the License. These limits prohibit the transfer or
acquisition of 10% or more of Partner’s means of control and acquisition of control
of the Company without the consent of the Minister of Communications of Israel, and
restrict cross-control and cross-ownership of other mobile telephone operators in Israel,
and shareholdings and agreements which may reduce or harm competition. Ordinary Shares or
Ordinary Shares represented by ADSs held in breach of these limits may be considered as
dormant shares. Notwithstanding anything to the contrary in this Proxy Statement, dormant
shares will not bear any rights to which the holders would otherwise be entitled, other
than the right to receive dividends and other distributions to shareholders (including
the right to participate in rights offerings). Specifically, the holders of dormant
shares will not have voting rights with respect to their dormant shares, nor will they
have the right to participate in general meetings of shareholders.
11
Any
shareholder seeking to vote at the EGM must notify the Company prior to the vote, or, if
the vote is by Deed of Vote, must so indicate on the Deed of Vote, if any of the
shareholder’s holdings in Partner or the shareholder’s vote requires the
consent of the Minister of Communications due to a breach by the shareholder of the
restrictions on the transfer or acquisition of means of control or acquisition of control
of Partner, or the provisions regarding cross-ownership or cross-control of other mobile
telephone operators in Israel, in each case as specified in Sections 21 and 23 of Partner’s
License (a translation of Sections 21-24 of the License is attached hereto as Annex
“B”). If a shareholder does not provide such notification, the shareholder
shall not vote and, if the shareholder has voted, his or her vote shall not be counted.
|
|
By Order of the Board
of
Directors
ROLY KLINGER, ADV.
Vice President
Legal and Regulatory Affairs
and Joint Company Secretary |
Dated: March 17, 2009
12
Annex “A”
PARTNER COMMUNICATIONS
COMPANY LTD.
2004 SHARE OPTION PLAN
as
adopted on 12 July 2004, amended on 26 March 2008 by the Board of Directors and approved
by the shareholders on 25 June 2008, and as further amended on 23 February, 2009 by
the Board of Directors and approved by the shareholders on __ _____ 2009
| |
This
Partner Communications Company Ltd. 2004 Share Option Plan, as amended from time to time,
(the “Plan”) is intended to promote the interests of Partner
Communications Company Ltd. (the “Company”) and its shareholders by
providing employees, directors and officers, and advisors of the Company with appropriate
incentives and rewards to encourage them to enter into and continue in the employ of, or
service to, the Company and to acquire a proprietary interest in the long-term success of
the Company. The Plan is designed to enable employees, directors and officers of the
Company to benefit from the provisions of Section 102 of the Israeli Income Tax Ordinance
[New Version], 1961, as amended, and any regulations, rules, orders or procedures
promulgated thereunder. |
| |
As
used in the Plan, the following definitions shall apply to the terms indicated below: |
|
“Affiliate” |
|
means
any “employing company” within the meaning of Section 102(a) of the Ordinance. |
|
“Approved 102 Option” |
|
means an Option granted pursuant to Section 102(b) of the Ordinance and
held in trust by a Trustee for the benefit of the Participant. |
|
“Capital Gain
Option (CGO)” |
|
means an Approved 102 Option elected and designated by the Company
to qualify under the capital gain tax treatment in accordance with the provisions of
Section 102(b)(2) of the Ordinance. |
|
“Cashless Formula” |
|
means the following formula: |
| |
A
= the number of vested Options the Participant requests to exercise as written in the
Notice of Exercise;
B = the higher of the following: (i) the closing sale price of an
Ordinary Share on the Tel Aviv Stock Exchange, on the last trading day before the Notice
Date (as defined in Section 8.6), as such closing sale price is published by the Tel Aviv
Stock Exchange, or (ii) if the Participant includes in the Notice of Exercise delivered
to the Company under Section 8.5, a minimum price at which he/she is willing to sell an
Ordinary Share, such price per Ordinary Share;
C= the Option Exercise Price. |
A - 1
|
“Cashless Options” |
|
shall have the meaning set forth in Section 8.6 (i)(y) or (ii). |
|
“Cause” |
|
when used in connection with the termination of a Participant’s employment or service
by the Company, shall mean (a) the willful and continued failure by the Participant to
perform his duties (including the duty of care and the fiduciary duty as set forth in the
Companies Law) and obligations to the Company (other than any such failure resulting from
Retirement or Disability, as hereinafter defined or any such failure approved by the
Company, subject to applicable law) or (b) the willful engaging by the Participant in
misconduct which is injurious to the Company, provided, however, that in relation to
employees or officers of the Company, in each case the actions or omissions of the
Participant are sufficient to deny the Participant severance payment under the Severance
Payment Law, 1963. |
|
“Commencement
Date” |
|
with respect to the vesting schedule of an Option, shall be the Grant Date, unless another
date for the commencement of the vesting schedule with respect to such Option has been set
by the Committee and written in the Grant Instrument. |
|
“Committee” |
|
shall mean the Compensation Committee of the Board of Directors of the Company, as set
forth in Section 5 below. |
|
“Companies Law” |
|
shall mean the Israeli Companies Law, 1999, as may be amended from time to time. |
|
“Company” |
|
shall mean Partner Communications Company Ltd., a company incorporated
under the laws of the State of Israel. |
|
“Designated Beneficiary” |
|
of a Participant, shall mean the beneficiary designated by such Participant or deemed as
such Participant’s Designated Beneficiary pursuant to Section 26 hereto, upon the
death of the Participant. |
|
“Disability” |
|
shall mean any physical or mental condition, which is recognized as a disability pursuant
to the employment practices adopted by the Company and prevents the Participant from
continuing to work in his position or in a comparable one in the Company or prevents the
Participant from continuing to provide services to the Company. Determination of a
Disability shall be made in consultation with a physician selected by the Committee and
shall be finally and conclusively determined by the Committee in its absolute discretion. |
A - 2
|
“Effective Date” |
|
means 12 July 2004 the date on which the Board of Directors of the Company first approved
the Plan. |
|
“Employee” |
|
means a person who is employed by the Company or its Affiliates, including an individual
who is serving as a director or an office holder, all as defined in section 102. |
|
“Exercise Date” |
|
shall have the meaning set forth in Section 11 below. |
|
“Exercise Period” |
|
shall have the meaning set forth in Section 8.3 below. |
|
“Grant Date” |
|
of an Option means the date on which the Committee resolves to grant such
Option, unless another date is specified by the Committee, provided that, if further
approvals are required for the granting of an Option, the Grant Date shall mean the date
that the last required approval for the grant of such Option shall have been obtained. |
|
“Grant Instrument” |
|
shall have the meaning set forth in Section 7.2 below. |
|
“ITA” |
|
means the Israeli Tax Authorities. |
|
“Net Income” |
|
means the amount in New Israeli Shekels specified as
“Net Income” of the Company for the relevant period in the unaudited or audited,
as the case may be, Financial Statements of the Company for such period as approved by the
Board of Directors of the Company at the relevant time. |
|
“Non-Employee” |
|
means a person who is not an Employee of the Company or its Affiliates. |
|
“Option” |
|
shall mean an option to purchase one or more Ordinary Shares granted pursuant to this
Plan. |
|
“Option Exercise Price” |
|
shall have the meaning set forth in Section 8.1 and adjusted from time to time in
accordance with Section 3.2 or 8.1 below. |
A - 3
|
“Ordinary
Income Option (OIO)” |
|
means an Approved 102 Option elected and designated by the Company
to qualify under the ordinary income tax treatment in accordance with the provisions of
Section 102(b)(1) of the Ordinance. |
|
“102 Option” |
|
means any Option granted to Employees pursuant to Section 102 of the
Ordinance. |
|
“3(i)Option” |
|
means an Option granted pursuant to Section 3(i)
of the Ordinance to any person who is a Non- Employee. |
|
“Ordinary Shares” |
|
shall mean ordinary shares of the Company, par value NIS 0.01 each. |
|
“Participant” |
|
shall mean an Employee or a Non-Employee to whom an Option is granted pursuant to the
Plan, and, upon his death or legal incapacity, his successors, heirs, executors and
administrators, as the case may be. |
|
“Plan” |
|
shall mean this Partner Communications Company Ltd. 2004Share Option Plan,
as amended from time to time. |
|
“Retirement” |
|
shall mean the termination of a Participant’s employment with or service to the
Company as a result of his reaching the earlier of (a) the legal age for retirement and
(b) the age for retirement identified in his employment or service agreement. |
|
“Section 3(i)” |
|
means Section 3(i) of the Ordinance and any regulations, rules, orders or
procedures promulgated thereunder as now in effect or as hereafter amended. |
|
“Section 102” |
|
means section 102 of the Ordinance and any regulations, rules, orders or
procedures promulgated thereunder as now in effect or as hereafter amended. |
|
“Section 102 Rules” |
|
means the Income Tax Rules (Tax Relief for Issuance of Shares to
Employees), 2003. |
|
“Tax
Ordinance” or “Ordinance” |
|
shall mean the Israeli Income Tax Ordinance [New Version], 1961,
as amended, and any regulations, rules, orders or procedures promulgated thereunder. |
|
“Trustee” |
|
means any individual appointed by the Company to serve as a trustee and approved by the
ITA, all in accordance with the provisions of Section 102(a) of the Ordinance. |
A - 4
|
“Termination Date” |
|
means close of business of the Company on the date which falls ten (10) years after the
Effective Date. |
|
“Unapproved 102 Option” |
|
means an Option granted pursuant to Section 102(c) of the Ordinance and
not held in trust by a Trustee. |
| 3. |
Shares
Subject to the Plan |
| |
3.1. |
Shares
Available for Options. On the Effective Date, the total number
of authorized and unissued Ordinary Shares reserved for issuance upon
exercise of all Options granted under the Plan was not to exceed 5,775,000
Ordinary Shares, which represented approximately 3.15% of the total issued
share capital of the Company as at the Effective Date. Conditional upon
applicable approvals having been obtained, the aforesaid limit shall be
increased by 8,142,000 Ordinary Shares to not exceeding a total of
13,917,000 Ordinary Shares which represents approximately 8.84% of the
total issued share capital of the Company as of 31 March 2008. The total
number of Ordinary Shares reserved for issuance under the Plan shall be
subject to adjustment as required for the implementation of the provisions
of the Plan, in accordance with Section 3.2 below. In the event an
Option granted to any Participant expires or otherwise terminates
hereunder, shares reserved for issuance upon the exercise of such Option
shall become available for issuance upon the exercise of any other Options
which the Company may grant under the Plan. |
| |
3.2. |
Adjustments.
Upon the occurrence of any of the following events, a Participant’s
rights under any Option granted hereunder shall be adjusted as hereinafter
provided: |
| |
3.2.1. |
In
the event the Ordinary Shares shall be subdivided or combined into a greater
or smaller number of shares or if, upon a merger, consolidation,
reorganization, recapitalization or similar event or transaction whilst
any Option remains exercisable or this Plan remains in effect, the
Ordinary Shares shall be exchanged for other securities of the Company or
of another corporation, each Participant shall be entitled, upon
exercising a vested Option and subject to the conditions herein stated, to
be issued in respect of the Option, such number of Ordinary Shares or
amount of other securities of the Company or such other corporation as
were exchangeable for the number of Ordinary Shares which such Participant
would have been entitled to purchase had such event or events not
occurred, and appropriate adjustments shall be made in the exercise price
per share to reflect such subdivision, combination or exchange, so that
Participants are not materially better or worse off as a result of the
relevant event and provided that any such adjustment shall give the
Participant the same proportion of the issued share capital of the Company
for which such Participant would have been entitled to subscribe had he
exercised all the Options held by him immediately prior to such adjustment
and that such adjustment shall be made on the basis that the aggregate
exercise price per share payable by the Participant on the full exercise
of any Option shall remain as nearly as possible the same (but not greater
than) as it was before such event. No such adjustment shall be made the
effect of which would be to enable an Ordinary Share to be issued at less
than its nominal value. |
A - 5
| |
3.2.2. |
In
the event the Company shall issue any of its shares or other securities as
bonus shares upon or with respect to its Ordinary Shares, each Participant
upon exercising such Option shall be issued by the Company (for the
exercise price payable upon such exercise), the Ordinary Shares as to
which he is exercising his Option and, in addition thereto (at no
additional cost), such number of shares (rounded down to the nearest whole
number) of the class or classes in which such bonus shares were
distributed which he would have received if he had been the holder of the
Ordinary Shares as to which he is exercising his Option at all times
between the date of issuance of such Option on behalf of a Participant in
the name of the Trustee and the date of its exercise. |
| |
3.2.3. |
Upon
the occurrence of any of the foregoing events, the class and aggregate
number of shares issuable pursuant to the Plan (as set forth in Section
3.1 hereof), in respect of which Options have not yet been granted, shall
also be appropriately adjusted, to the extent necessary, to reflect the
events specified in Subsections 3.2.1 and 3.2.2 above. |
| |
3.2.4. |
If
there has been any alteration in the capital structure of the Company as
referred to in this Section 3.2, the Company shall, upon receipt of a
Notice of Exercise (pursuant to Section 8.5 below) inform the Participant
of such alteration and shall inform the Participant of the adjustment to
be made. |
| |
3.2.5. |
The
Committee shall determine the specific adjustments to be made in accordance
with this Section 3 and the rules and regulations of any stock exchange
applicable from time to time to the Company, by reason of their
applicability to its shareholders or otherwise. A determination made in
accordance with this Section 3.2.5 shall be conclusive. |
| |
4.1. |
The
maximum number of Options which may be issued and allotted and which may be
required to be issued and allotted upon the exercise of Options to each
Participant under this Plan in any 12-month period shall not exceed 1% of
the total issued share capital of the Company as measured at the Grant
Date of Options or further Options to such Participant. The eligibility of
any person shall be determined from time to time on the basis of his
contribution to the development of the Company. |
A - 6
| |
4.2. |
The
persons eligible for participation in the Plan as Participants shall include
any Employees or Non-Employees of the Company or of any Affiliate;
provided, however, that (i) Employees may only be granted 102 Options and
(ii) Non-Employees may only be granted 3(i) Options. |
| |
4.3. |
The
Company may designate Options granted to Employees pursuant to Section 102
as Unapproved 102 Options or Approved 102 Options. |
| |
4.4. |
The
grant of Approved 102 Options shall be made under this Plan adopted by the
Board, and shall be conditioned upon the approval of this Plan by the ITA. |
| |
4.5. |
Approved
102 Options may either be classified as Capital Gain Options (“CGOs”)
or Ordinary Income Options (“OIOs”). |
| |
4.6. |
No
Approved 102 Options may be granted under this Plan to any eligible Employee,
unless and until, the Company’s election of the type of Approved 102
Options as CGO or OIO granted to Employees (the “Election”),
is appropriately filed with the ITA. Such Election shall become effective
beginning on the first Grant Date of an Approved 102 Option under this
Plan and shall remain in effect at least until the end of the year
following the year during which the Company first granted Approved 102
Options (under this Plan or previous plans). The Election shall obligate
the Company to grant only the type of Approved 102 Option it has
elected, and shall apply to all Participants who were granted Approved 102
Options during the period indicated herein, all in accordance with the
provisions of Section 102(g) of the Ordinance. For the avoidance of doubt,
such Election shall not prevent the Company from granting Unapproved 102
Options simultaneously. |
| |
4.7. |
All
Approved 102 Options must be held in trust by a Trustee, as described in
Section 11 below. |
| |
4.8. |
For
the avoidance of doubt, the designation of Unapproved 102 Options and
Approved 102 Options shall be subject to the terms and conditions set
forth in Section 102. |
| 5. |
Administration
of the Plan |
| |
5.1. |
Committee. The
Plan shall be administered by the Compensation Committee, which has been
appointed by and serves at the direction of the Board of Directors of the
Company. The Board of Directors may from time to time remove members from,
or add members to, the Committee, and may fill vacancies in the Committee
however caused. |
| |
5.2. |
Committee
Actions. The Committee has selected one of its members as its Chairman
and holds its meetings at such times and places, as it determines. Actions
at a meeting of the Committee at which a majority of its members are
present, or acts reduced to or approved in writing by all members of the
Committee, are the valid acts of the Committee. The Committee keeps
records of its meetings and makes such rules and regulations for the
conduct of its business, as it deems advisable. |
A - 7
| |
5.3. |
Authority
of Committee. The Committeehas the authority, in its sole
discretion, subject to the approval of the Board of Directors – if
such approval is required under the Companies Law – and subject to
any applicable law and regulations and not inconsistent with the express
provisions of the Plan, to administer the Plan and to exercise all the
powers and authorities either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan including,
without limitation, the authority in its discretion to determine the
persons to whom Options are granted, the number of shares covered by each
Option, the time or times at which Options are granted, the Commencement
Date and the Option Exercise Price, and any other terms to be included in
the Grant Instrument which are permitted by the Plan. The Committee also
has the power and authority to determine whether, to what extent, and
under what circumstances an Option may be settled, canceled, forfeited,
exchanged, or surrendered; to construe and interpret the Plan and any
Grant Instrument and Option; and to make all other determinations deemed
necessary or advisable for the administration of the Plan. |
| |
5.4. |
Interpretation
and Construction. The interpretation and construction by the Committee
of any provision of the Plan or of any Grant Instrument or Option
thereunder shall be final and conclusive, unless otherwise determined by
the Board of Directors of the Company. |
| |
5.5. |
Acceleration
and Other Amendments. Save and except for the occurrence of events
specified in Section 6 below whereupon the Committee shall comply with the
provisions therein, the Committee may, in its sole and absolute discretion,
accelerate the date on which any Option granted under the Plan becomes
exercisable, waive or amend the operation of Plan provisions respecting
exercise after termination of employment or otherwise amend any of the
terms of any Grant Instrument or Option, subject to the provisions of the
Tax Ordinance, provided, however, that no such waiver or amendment shall
adversely affect any Participant’s rights under any outstanding Grant
Instrument or Option under the Plan without the consent of such
Participant. |
| 6. |
Acceleration
in the Event of a Change in Control; Winding Up |
| |
6.1. |
Acceleration
in the Event of Change in Control. In the event that within six months
after a Change in Control of the Company a Participant’s employment
with or service to the Company is terminated by, or a Participant receives
a notice of termination from, the Company for any reason (other than
termination for Cause), the Options granted to such Participant whether
vested or not shall be automatically and immediately accelerated so that
all such Options shall become vested and exercisable within thirty (30)
days after the date of termination of employment or service. |
| |
All
outstanding Options so vested in the manner as aforesaid which are not exercised within
the thirty (30) days after the date of termination of employment or service shall
terminate and cease to be outstanding upon the expiry of the aforesaid thirty-day period. |
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| |
For
the purpose of this Section 6.1, “Change in Control” shall mean: |
|
(i)
the
acquisition which results in holding, directly or indirectly, of (a) the
power to control at least 50% of the Company’s share capital; or (b)
the power (exercisable alone or together in concert with others) to direct
or cause the direction of the management and policies of the Company,
whether through the ownership of Ordinary Shares, by law, contract or
otherwise; or (c) the power (exercisable alone or together in concert with
others) to elect or appoint at least 50% of the Board of Directors of the
Company; |
|
(ii)
a
merger, consolidation or similar transaction (including an arrangement) of the
Company following which the Company is not a surviving corporation; |
| |
(iii)
a
merger, consolidation or similar transaction (including an arrangement)
following which the holders of voting securities of that other company holding,
in aggregate, 50% or more of all outstanding Ordinary Shares of the Company
(including a merged or successor company) resulting from such merger,
consolidation or similar transaction; or |
| |
(iv)
the
sale, lease or exchange of all or substantially all of the property of the
Company, other than in the ordinary course of business of the Company or
to its subsidiary; |
| |
Provided
that any event or transaction contemplated in sub-paragraph (i), (ii) or (iii) shall not
constitute a Change in Control for purposes of this Plan if following such event or
transaction, 50% or more of voting securities of the Company remain held directly or
indirectly by the ultimate shareholder prior to such event or transaction (the “Ultimate Shareholder”)
or any company or other person controlled directly or indirectly in any manner whatever
whether through the ownership of voting securities or otherwise in fact by the Ultimate
Shareholder. |
| |
6.2. |
Acceleration
in the Event of winding up. In the event of an effective resolution
being proposed for the voluntary winding-up of the Company, any
Participant may, subject to the provisions of all applicable laws, by
notice in writing to the Company at any time prior to the date on which
such resolution is passed, exercise his vested Options (to the extent not
already exercised) either to its full extent or to the extent specified in
such Notice of Exercise (in accordance with the provisions of Section 8.5)
and shall accordingly be entitled, in respect of the Ordinary Shares to be
issued upon the exercise of his or her vested Option, to participate in
the distribution of the assets of the Company available in liquidation
pari passu with the holders of the Ordinary Shares in issue on the date
prior to the date of such resolution. |
| 7. |
Options
Underunder the Plan; Grant Instrument |
| |
7.1. |
Eligible
Grantees. Options may be granted to any Employee or Non- Employee of
the Company or its Affiliate selected by the Committee provided, however,
that no Option may be granted by the Committee to any person serving as a
member of the Committee at the time of the grant. The grant of an Option to a
Participant shall neither entitle such Participant to, nor disqualify him
from, receiving any other grants of Options pursuant to the Plan or
participating in any other share option plan. Any grant of Options under
the Plan shall be in compliance with the requirements under applicable
laws and regulations, including by reason of their applicability to the
Company’s shareholders or otherwise. |
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| |
7.2. |
Grant
Instrument. Each Option granted under the Plan shall be evidenced by a
written instrument signed by the Company and accepted in writing by the
Participant which shall be accompanied by a copy of this Plan and shall
contain such provisions as the Committee, in its sole discretion, may deem
necessary or desirable (the “Grant Instrument”).
By accepting an Option, a Participant thereby agrees that the Option shall
be subject to all the terms and provisions of this Plan and the applicable
Grant Instrument. Unless otherwise determined by the Committee, no payment
is required to be made by a Participant on acceptance of an Option. The
Grant Instrument shall also state the type of Option granted thereunder
(whether a CGO, OIO, Unapproved 102 Option or a 3(i) Option). |
| |
7.3. |
Cancelled
Options. Where the Company cancels any Option granted to a Participant
but not exercised and issues new Option(s) to the same Participant, the
issue of such new Option(s) may only be made with available unissued Options
(excluding, for this purpose, the Options so cancelled) within the limit
of this Plan under Section 3.1. |
| |
8.1. |
Exercise
Price. The Committee shall determine the exercise price per Ordinary
Share (“Option Exercise Price”), subject to
applicable law, regulations and guidelines. The Option Exercise Price will
be determined taking into consideration the fair market value of an
Ordinary Share at the time of grant. The fair market value of an Ordinary
Share on any date will be equal to the average of the closing sale price
of Ordinary Shares during the preceding 30 trading days, as such closing
sale price is published by the Tel Aviv Stock Exchange, or if the Ordinary
Shares are not listed on the Tel Aviv Stock Exchange, the main securities
exchange on which the Ordinary Shares are traded or, if there is no sale
of Ordinary Shares on such date, the average of the bid and asked prices
on such exchange at the closing of trading on such date or, if Ordinary
Shares are not listed on a national securities exchange on such date, the
closing price or, if none, the average of the bid and asked prices in the
over the counter market at the close of trading on such date, or if the
Ordinary Shares are not traded on a national securities exchange or the
over the counter market, the fair market value of an Ordinary Share on
such date as determined in good faith by the Committee. Unless otherwise
provided in the Grant Instrument, the Option Exercise Price shall be paid
in NIS. Except for any applicable provisions of the Tax Ordinance or
relevant securities laws or specific provisions of this plan, the Ordinary
Shares and any other securities issued to a Participant (or the Trustee on
his behalf) upon Option exercise and payment of the Option Exercise Price
shall be subject to the articles of association of the Company from time
to time in force (including, without limitation, provisions relating to
voting and dividend) and shall be free and clear of any transfer
restrictions; pledges, encumbrances or liens; and other third party rights
of any kind. |
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| |
Without
derogating from the generality of the immediately preceding paragraph and only with
respect to Options granted on or after February 23, 2009, at any time after the grant of
such Options that the Company distributes cash dividends in the ordinary course, with
respect to all of its issued and outstanding Ordinary Shares, in an amount in excess of
40% (forty percent), or of another percent resolved by the Board of Directors, of the
Company’s Net Income for the relevant period (the “Excess Dividend”),
and the record date for determining the right to receive such dividends is earlier than
the Exercise Date of such Options, then the Option Exercise Price (as adjusted from time
to time) for each Ordinary Share underlying an Option (granted on or after February 23,
2009 and whether vested or not as at the relevant record date), not exercised prior to
such record date, shall be reduced, ipso facto, as at such record date, by
an amount equal to the gross amount of the Excess Dividend per Ordinary Share. |
| |
The
Excess Dividend per Ordinary Share will be determined on a quarterly basis with an annual
adjustment on the fourth quarter of each financial year as follows: |
| |
(a) |
In
respect of the first three quarters of each financial year, the Excess
Dividend per Ordinary Share for each quarter will be determined on the
basis of the cash dividends distributed and the Net Income for such
quarter and the number of Ordinary Shares on the relevant record date; and |
| |
(b) |
In
respect of the fourth quarter of each financial year, the Excess Dividend per
Ordinary Share for the said quarter will be determined on the basis of the
total cash dividends distributed and the Net Income for the full financial
year and the number of Ordinary Shares on the relevant record date and the
deduction of the aggregate Excess Dividend per Ordinary Share for the
preceding three quarters. For the avoidance of doubt, the downward
adjustments to Option Exercise Price made in the preceding three quarters
pursuant to sub-paragraph (a) above shall be final and binding and shall
not be reversed in the fourth quarter of a financial year. |
| |
At
any time that the Company distributes cash dividends other than in the ordinary course,
with respect to all of its issued and outstanding Ordinary Shares, and the record date
for determining the right to receive such dividends is earlier than the Exercise Date of
Options, then the Option Exercise Price (as adjusted from time to time) for each Ordinary
Share underlying an Option (whether vested or not), not exercised prior to such record
date, shall be reduced, as at such record date, by an amount which the Board of Directors
considers as reflecting the impact such distribution will have or will likely to have on
the trading price of the Ordinary Shares; provided, that (i)
the Board of Directors’ determination of any adjustments shall be final and
conclusive on all Participants; (ii) the amount of adjustment shall not exceed the amount
of such cash distribution per Ordinary Share; and (iii) any adjustment provided for in
this paragraph shall be cumulative to any other adjustments contemplated under the
immediately preceding paragraph or approved by the shareholders of the Company in general
meeting. |
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| |
The
Option Exercise Price shall not be reduced to less than the par value of an Ordinary
Share. |
| |
With
respect to Cashless Options, the Option Exercise Price per share set forth in the Grant
Instrument (as adjusted from time to time) will not berepresent the actual amount to be
paid by the Participant to the Company for said Cashless Options, but will only be used
for the purpose of calculating and determining the number of Ordinary Shares to be issued
to the Participant as the result of the exercise of a Cashless Option. |
| |
8.2. |
Vesting
Schedule. An Option shall become cumulatively vested as to one-fourth
(25%) of the Ordinary Shares covered thereby on each of the first, second,
third, and fourth anniversaries of its Commencement Date, unless otherwise
set by the Committee in the Grant Instrument. Unless otherwise determined
by the Committee and stated in the Grant Instrument, a Participant is not
required to achieve any performance targets before the vesting or the
exercise of an Option. |
| |
8.3. |
Exercise
Period. The exercise period during which an option may be exercised
will be determined by the Committee and will not exceed ten years from the
Grant Date or such shorter period set forth in the Grant Instrument. |
| |
8.4. |
Minimum
Exercise. No exercise of Options by a Participant, shall be for an
aggregate exercise price of less than $1,000 unless such exercise is for all
shares of the Company purchasable upon exercise of the Options held by a
Participant (or by the Trustee on his behalf) which have vested as of such
date. The partial exercise of an Option shall not cause the expiration,
termination or cancellation of the remaining unexercised portion of such
Option. Each Option exercise shall be in respect of a whole number of
shares, and the Company shall not issue any fractional shares; the number
of shares granted under the Plan to any Participant shall be rounded off
(upward or downward) to the nearest whole number. |
| |
8.5. |
Method
of Exercise. An Option, or any part thereof, shall be exercised by (i)
the Participant’s signing and delivering to the Company at its
principal office, to the attention of its Secretary (or to the Trustee, if
the Option is held in trust), an exercise notice (“Notice of
Exercise”) in such form and substance as may be prescribed by the
Committee from time to time, and (ii) full payment for the Ordinary Shares
purchased upon the exercise of an Option. Payment shall be made on the
date of delivery of the Notice of Exercise or on a later date, if so
determined by the Committee, by the following means: (x) in cash, by
certified check, bank cashier’s check or wire transfer, or (y)
subject to the approval of the Committee, by such other method of payment
as the Committee may from time to time authorize. |
| |
8.6. |
Cashless
Exercise – The Board of Directors of the Company may, at its
discretion, resolve from time to time: |
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| |
(i)
to
allow Participants to exercise their vested Options during a fixed period
either (x) in cash; or (y) through a cashless exercise procedure during a fixed
period, pursuant to which each vested Option will entitle its holder, with to
the right to purchase Ordinary Shares (subject to the adjustments described in
Section 3.2 or 8.1 above), in accordance with the following formula Cashless
Formula (“Cashless Options”):”); or |
| |
A
= the number of vested (ii) with respect to any or all Options the Participant
requests granted on or after [February 23, 2009] and without derogating from
the provisions of clause (i), to allow Participants to exercise as written in their
vested Options during a fixed period only through a cashless exercise procedure, pursuant
to which each vested Option will entitle its holder to the Notice of Exercise; B = the
fair market value of anright to purchase Ordinary Share on the Notice Date (as defined in
this Shares (subject to the adjustments described in Section 3.2 or 8.6) determined 1
above), in accordance with the terms set out in Section 8.1 above; Cashless Formula (“Cashless
Options”). |
| |
C=the Option Exercise Price; |
| |
During
the period when Cashless Exercise is allowed under clause (i)(y) or under clause (ii),
the Participant may elect to exercise vested Cashless Options by signing and delivering
to the Company at its principal office, to the attention of its Secretary (or to the
Trustee, if the Option is held in trust), an exercise notice (“a Notice of Exercise”)
in such form and substance as may be prescribed by the Committee and pay the nominal
value of the Ordinary Shares in the manner as specified in Section 8.5. |
| |
The
Committee or someone designated by it and/or the Trustee will make all applicable
calculations with respect to the Option Exercise Price and determine the amount of
Ordinary Shares issued or to be issued upon exercise of the vested Options, all in
accordance with the Plan onthe date on which the Notice of Exercise has been
delivered (as specified in Section 8.5, and if such date is not a business day, the first
business day following such date) (“Notice Date”) including the
applicable exchange rate in effect on the Notice Date and such calculation will be
binding on the Participants. |
| |
Fractional
Shares will be rounded down to the nearest whole number of Ordinary Shares. |
| |
8.7. |
Issuance
of Shares. Subject to any other applicable provisions of this Plan,
Ordinary Shares purchased upon the exercise of an Option shall be issued
in the name of the Trustee or the Participant, all in accordance with the
requirements of the Tax Ordinance. |
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| |
8.8. |
Waiver
of Option Rights. At any time prior to the expiration of any Option, a
Participant may waive all rights attributable to such Option by delivering
a written notice to the Company’s principal office, to the attention
of its Secretary. Such notice shall be accompanied by the applicable Grant
Instrument, shall specify the number of Ordinary Shares subject to the
Option with respect to which the Participant waives his rights and shall
be signed by the Participant. Upon receipt by the Company of the notice of
waiver with respect to any Option, such Option shall expire with respect
to the number of Ordinary Shares specified therein, and an amended Grant
Instrument will be issued with respect to any Option or Options (or
portion thereof) covered by the Grant Instrument as to which rights
attributable thereto were not waived. |
| |
8.9.s |
Notices. All
notices delivered by a Participant hereunder shall be signed by the
Participant and notarized or certified by an attorney, or signed in the
presence of (and countersigned by) the Company’s General Counsel or
Corporate secretary. Any notice if sent by the Participant shall be
irrevocable and shall not be effective until actually received by the
Company. |
| 9. |
Termination
of Employment or Service |
| |
9.1. |
Voluntary
Termination by Participant. In the event that a Participant’s
employment with or service to the Company is terminated by the Participant
voluntarily for any reason other than Retirement, Disability or death: (i)
Options granted to such Participant, to the extent vested at the time of
termination of employment or service, shall be exercisable for a period of 90
days following either termination or the date upon which the Participant
may freely sell Ordinary Shares acquired upon Option exercise, the later
date of the two and (ii) Options granted to such Participant, to the
extent that they were not vested at the time of termination of employment
or service, shall expire at the time of termination. |
| |
9.2. |
Termination
by the Company Other Than For Cause. In the event that a Participant’s
employment with or service to the Company is terminated by the Company for
any reason other than for Cause: (i) Options granted to such Participant,
to the extent vested at the time of termination of employment or service,
shall be exercisable during the remainder of their exercise period, and
(ii) Options granted to such Participant, to the extent that they were not
vested at the time of termination of employment or service, shall expire
at such time. Section 9.2 shall not apply upon occurrence of the events
specified in Section 6 whereupon the provisions therein shall govern. |
| |
9.3. |
Termination
By Reason of Retirement, Death or Disability. In the event that a
Participant’s employment with or service to the Company terminates by
reason of the Retirement, Disability or death of the Participant: (i) Options
granted to such Participant, to the extent vested at the time of
termination of employment or service, shall be exercisable during the
remainder of their exercise period, and (ii) Options granted to such
Participant, to the extent that they were not vested at the time of
termination of employment or service, shall expire at such time; provided,
however, that a pro rata portion of the Options that would have
become vested on the next anniversary of the Commencement Date (but for
such termination of employment or service) shall become vested on the date
of such termination of employment or service and shall be exercisable
during the remainder of their Exercise Period. Such pro rata portion shall
be determined by multiplying the number of unvested Options scheduled to
vest on the next anniversary of the Commencement Date by a fraction, the
numerator of which is the number of full and partial months which the
Participant has been employed with or gave services to the Company since the
most recent anniversary of the Commencement Date (or, if less than one
year has elapsed since the Commencement Date, since the Commencement Date)
and the denominator of which is twelve, rounded down to the nearest whole
number. |
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| |
9.4. |
Termination
For Cause. In the event a Participant’s employment with or
service to the Company is terminated for Cause, all outstanding Options
granted to such Participant shall expire upon the termination of
employment or service. A Participant shall be entitled to challenge the
Committee’s determination that a termination is for Cause, in which
case, the final determination shall be made by a court of competent
jurisdiction. |
| |
9.5. |
Expiration
of Term. Notwithstanding anything to the contrary in this Section 10,
no Option shall be exercisable after the expiration of its Exercise
Period. |
| |
10.1. |
Approved
102 Options which shall be granted under this Plan and any Ordinary Shares
allocated or issued upon exercise of such Approved 102 Options and other
rights, including without limitation bonus shares, shall be allocated or
issued to the Trustee and held for the benefit of the Participants for
such period of time as required by Section 102 or any regulations, rules
or orders or procedures promulgated thereunder (the “Holding Period”). |
| |
10.2. |
With
respect to any Approved 102 Option, subject to Section 102 and the Rules,
Participants shall not be able to receive from the Trustee, nor shall they
be able to sell or dispose of Ordinary Shares or any rights, including
bonus shares, before the end of the applicable Holding Period. If a
Participant sells or removes the Shares from the Trustee before the end of
the applicable Holding Period (“Breach”), the Participant
shall pay all applicable taxes imposed on such Breach by Section 7 of the
Rules. |
| |
10.3. |
Until
all taxes have been paid in accordance with Section 7 of the 102 Rules,
Options and Shares may not be sold, transferred, assigned, pledged,
encumbered, or otherwise willfully hypothecated or disposed of, and no
power of attorney or deed of transfer, whether for immediate or future use
may be validly given. Notwithstanding the foregoing, the Options and
Shares may be validly transferred in a transfer made by will or laws of
descent, provided that the transferee thereof shall be subject to the
provisions of Section 102 and the Section 102 Rules as would have been
applicable to the deceased Participant were he or she to have survived. |
| |
10.4. |
Upon
receipt of Approved 102 Option, the Participant will sign an undertaking to
release the Trustee from any liability in respect of any action or
decision duly taken and bona fide executed in relation with this Plan, or
any Approved 102 Option or Ordinary Share granted to him thereunder. |
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| 11. |
Rights
as a Shareholder |
| |
No
Participant shall have any rights as a shareholder with respect to any Ordinary Shares or
other securities of the Company covered by or relating to any Option, whether or not
exercisable, until the due issuance of such shares by the Company. Ordinary Shares to be
issued upon the exercise of an Option will be subject to all provisions of the Articles
of Association of the Company for the time being in force and will, subject to the
completion of registration (as referenced below), rank pari passu in all respects
with the then existing fully paid Ordinary Shares in issue on the date in which the
Option is duly exercised or, if that date falls on a day when the register of members of
the Company is closed, the first day of re-opening of the register of members (“Exercise
Date”) and accordingly will entitle the holders thereof to participate in all
dividends or other distributions paid or made on or after the Exercise Date other than
any dividend or other distribution previously declared or recommended or resolved to be
paid if the record date therefor shall be before the Exercise Date. An Ordinary Share
issued upon the exercise of an Option shall not carry voting rights until the Participant
has been duly entered on the register of members of the Company as the holder thereof. |
| 12. |
No
Special Employment or Service Rights; No Right to Option |
| |
Nothing
contained in this Plan or any Grant Instrument shall confer upon any Participant any
right with respect to the continuation of employment by or service to the Company or
interfere in any way with the right of the Company, subject to the terms of any separate
employment or service agreement, at any time to terminate such employment or service, or
to increase or decrease the compensation of or payment to the Participant. The Plan shall
not form part of any contract of employment. No person shall have any claim or right to
receive any shares hereunder except in accordance with the express terms of this Plan and
a Grant Instrument issued to such person. |
| |
13.1. |
This
Plan shall be governed by, and shall be conformed with and interpreted so
as to comply with, the requirements of Section 3(i) or Section 102 of the
Tax Ordinance (as the case may be) and any regulations, rules, orders, or
procedures promulgated thereunder. |
| |
13.2. |
Any
tax consequences arising from the grant or exercise of any Option, from the
payment for Ordinary Shares covered thereby or from any other event or act
(of the Company, and/or its Affiliates, and the Trustee – if
applicable – or the Participant), hereunder, shall be borne solely by
the Participant. The Company and/or its Affiliates, and/or the Trustee
shall withhold taxes according to the requirements under the applicable
laws, rules, and regulations, including withholding taxes at source.
Furthermore, the Participant shall agree to indemnify the Company and/or
its Affiliates and/or the Trustee and hold them harmless against and from
any and all liability for any such tax or interest or penalty thereon,
including without limitation, liabilities relating to the necessity to
withhold, or to have withheld, any such tax from any payment made to the
Participant. |
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| |
13.3. |
The
Company and/or, when applicable, the Trustee shall not be required to
release any share certificate to a Participant until all required payments
have been fully made. |
| |
13.4. |
With
respect to Unapproved 102 Option, if the Participant ceases to be employed
by the Company or any Affiliate, the Participant shall extend to the
Company and/or its Affiliate a security or guarantee for the payment of
tax due at the time of sale of Shares, all in accordance with the
provisions of Section 102 and the rules, regulation or orders promulgated
thereunder. |
| |
Whenever
cash is to be paid pursuant to an Option, the Company shall have the right to deduct from
such payment an amount sufficient to satisfy any applicable withholding tax requirements
related thereto. Whenever Ordinary Shares or any other non-cash assets are to be
delivered pursuant to the exercise of an Option, the Company shall have the right to
require the Participant to remit to the Company in cash an amount sufficient to satisfy
any applicable withholding tax requirements related thereto, and if such amount of cash
is not timely remitted, to withhold such Ordinary Shares or any other non-cash assets
pending payment by the Participant of such amounts. |
| 15. |
Transfers
Upon Death; Non-Assignability |
| |
15.1. |
Death. Upon
the death of a Participant, outstanding Options granted to such
Participant may be exercised only by (i) the Designated Beneficiary
designated by such Participant pursuant to Section 23 below, or (ii) if
such Participant did not designate a Designated Beneficiary, to the person
deemed as such Participant’s Designated Beneficiary pursuant to
Section 23 below or to a person who shall have acquired the right to the
Options by will or by the laws of descent and distribution. No transfer of
an Option by will or by the laws of descent and distribution shall be
effective to bind the Company unless the Company shall have been furnished
with (a) written notice thereof and with a copy of the relevant section of
the will relating to the bequest of the Option, certified by a notary
and/or such other evidence as the Committee may deem necessary to
establish the validity of the transfer and (b) a written consent by the
transferee to pay the Option Exercise Price upon exercise of the Option, if
any, and otherwise abide by the terms set forth in this Plan and in the
relevant Grant Instrument. |
| |
15.2.1. |
Notwithstanding
any other provision of the Plan, no Option or any right with respect
thereto, purchasable hereunder, whether fully paid or not, shall be
assignable, transferable or given as collateral or any right with respect
to them given to any third party whatsoever, and during the lifetime of
the Participant each and all of such Participant’s rights to purchase
Ordinary Shares hereunder shall be exercisable only by the Participant.
Any such action made directly or indirectly, for an immediate validation
or for a future one, shall be void and shall entitle the Company to cancel
any Option granted to such Participant to the extent not already
exercised. |
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| |
15.2.2. |
As
long as Options or Ordinary Shares purchased pursuant to thereto are held by
the Trustee on behalf of the Participant, all rights of the Participant
over the shares are personal, cannot be transferred, assigned, pledged or
mortgaged, other than by will or laws of descent and distribution. |
| 16. |
Expenses
and Receipts |
| |
The
expenses incurred in connection with the administration and implementation of the Plan
(excluding any taxes and other liabilities to which the Participant is subject as a
result of his or her participation in the Plan) shall be paid by the Company. Any
proceeds received by the Company in connection with the exercise of any Option may be
used for general corporate purposes. |
| |
17.1. |
Term
of Plan. Options may be granted at any time after (i) the Effective
Date (ii) (for CGO or OIO Options) the Trustee has been approved by the
Israeli Income Tax Authorities pursuant to the requirements of the Tax
Ordinance, and (iii) any other approvals or consents required by law have
been received, until the Termination Date after which period no further
Options may be issued but the provisions of the Plan shall remain in full
force and effect to the extent necessary to give effect to the exercise of
any Options granted or exercised prior thereto or otherwise as may be
required in accordance with the provisions of the Plan. |
| |
17.2. |
The
Board of Directors of the Company may, at any time and from time to time,
terminate the Plan in any respect, subject to any applicable approvals or
consents that may be otherwise required by law, regulation or agreement,
including by reason of their applicability to its shareholders or
otherwise, and provided that no termination of the Plan shall adversely
affect the terms of any Option which has already been granted. Upon such
termination, no further Options will be offered under the Plan, but in all
other respects the provisions of the Plan shall remain in force to the
extent necessary to give effect to the exercise of any Options (to the
extent not already exercised) granted prior thereto or otherwise as may be
required in accordance with provisions of the Plan and Options (to the
extent not already exercised) granted prior to such termination shall
continue to be valid and exercisable in accordance with the Plan. |
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| 18. |
Amendment
of the Plan |
| |
18.1. |
Subject
to other sections of the Plan, applicable law and the rules and
regulations of any stock exchange applicable from time to time to the
Company, by reason of their applicability to its shareholders or
otherwise, the Plan may be altered or amended in any respect by a
resolution of the Board of Directors of the Company except that, to the
extent applicable, provisions relating to matters set out in Rule 17.03 of
Chapter 17 of The Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Ltd as amended from time to time, shall not be
altered or amended to the advantage of Participants except with the prior
sanction of a resolution of the shareholders of the Company in general
meeting. |
| |
18.2. |
Any
alterations or amendments to the terms and conditions of the Plan which are
of a material nature or any change to the terms of the Options granted
must be approved by the shareholders of the Company except where the
alterations take effect automatically under the existing terms of the
Plan. |
| |
18.3. |
Any
change to the authority of the Board of Directors of the Company or the
Committee in relation to any alteration to the terms of the Plan must be
approved by the shareholders of the Company in general meeting. |
| |
18.4. |
The
terms of the Plan and/or any Options amended pursuant to this section 18
must comply with the applicable rules and/or regulations of any stock
exchange applicable from time to time to the Company, by reason of their
applicability to its shareholders or otherwise. |
| |
In
addition to the remedies of the Company elsewhere provided for herein, failure by a
Participant to comply with any of the terms and conditions of the Plan or the applicable
Grant Instrument shall be grounds for the cancellation and forfeiture of such Option, in
whole or in part, as the Committee, in its absolute discretion, may determine, provided
however, that such failure is not remedied by such Participant within ten days after
notice by the Company of such failure. |
| |
The
Plan is subject to the receipt, and the terms, of all approvals and permits required
under any applicable law or by regulatory authorities having jurisdiction over the Plan,
the Options, or the Ordinary Shares issued upon exercise of Options, including by reason
of their applicability to the Company’s shareholders or otherwise. |
| |
The
Plan and all instruments issued thereunder or in connection therewith, shall be governed
by, and construed and administered in accordance with the laws of the State of Israel. |
A - 19
| 22. |
No
Rights Against the Company |
| |
This
Plan shall not confer on any person any legal or equitable rights (other than those
constituting the Options themselves) against the Company directly or indirectly or give
rise to any cause of action at law or in equity against the Company. |
| 23. |
Treatment
of Participants |
| |
There
is no obligation for uniformity of treatment for Participants. |
| 24. |
Unfunded
Status of Awards |
| |
The
Plan is intended to constitute an “unfunded” plan for incentive and deferred
compensation. With respect to any payments not yet made to a Participant pursuant to an
Option, nothing contained in the Plan or any Grant Instrument shall give any such
Participant any rights that are greater than those of a general unsecured creditor of the
Company. |
| |
No
fractional shares shall be issued or delivered upon exercise of an Option. Unless
otherwise provided herein, in lieu of fractional shares, the Company shall pay to an
exercising Participant cash or other property, or issue additional Options, as the
Committee deems appropriate. |
| 26. |
Designation
of a Beneficiary |
| |
A
Participant may file with the Company a written designation of a Designated Beneficiary
on such form as may be prescribed by the Committee and may, from time to time, amend or
revoke such designation. If no Designated Beneficiary survives the Participant, the
Participant’s estate representative (e.g. executor, administrator or similar
representative) shall be deemed to be the Participant’s Designated Beneficiary. |
| 27. |
Integration
Of Section 102 Andof Section 102 and Tax Assessing Officer’s Permit |
| |
27.1. |
With
regards to Approved 102 Options, the provisions of the Plan and/or the
Grant Instrument shall be subject to the provisions of Section 102 and the
Tax Assessing Officer’s permit, and the said provisions and permit
shall be deemed an integral part of the Plan and of the Grant Instrument. |
| |
27.2. |
Any
provision of Section 102 and/or the said permit which is necessary in order
to receive and/or to keep any tax benefit pursuant to Section 102, which
is not expressly specified in the Plan or the Grant Instrument, shall be
considered binding upon the Company and the Participants. |
The
Participant shall not divulge the details of the Plan and/or his holdings to any person
except with the prior written permission of the Company, unless so required to do under
any statutes or regulations applicable to such Participant.
A - 20
Annex “B”
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. |
B - 1
| 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; |
B - 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 |
B - 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. |
| 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 |
B - 4
| |
For
this matter, “Dormant Shares”- as defined in Article 308 of the
Companies Law, 5759-1999. |
| 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. |
B - 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. |
B - 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. |
B - 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. |
| 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. |
B - 8
| 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. |
B - 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: March 17, 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”, “Partner” or
“we”).
Type, date and place of meeting:
Extraordinary General Meeting will be held on April 22, 2009 at 10:00a.m. (Israel time),
at the Company offices, 8 Ha’amal Street, Rosh Ha’ayin, Israel or at any
adjournment thereof. The telephone number for inquiries is #972-54-781-4191.
Pursuant to the Israeli Companies
Law of 1999, as amended (the “Israeli Companies Law”) and the Israeli
Companies Regulations (Deeds of Vote and Position Notices) of 2005 (the “Deeds of
Vote Regulations”), shareholders who will not attend the meeting in person may
vote with respect to item no. 1 on the agenda by a Hebrew form of deed of vote (ktav
hatzba’a) and this item is subject to provisions set forth in the Israeli
Companies Law and the Deeds of Vote Regulations (the “Regulations Procedure”).
For the shareholders’ convenience, item no. 2 on the agenda is also included in this
document although said item is not subject to the Regulations Procedure.
The item on the agenda,
subject to the Regulations Procedure:
| 1. |
Approval
of the Re-appointment of Dr. Michael Anghel as an External Director (Dahatz)
and that No Change is Made to his Remuneration or to the
Provisions of his Director’s Indemnification and the Director’s
Insurance Policies. |
| |
The
Board of Directors of the Company has resolved to propose to the shareholders of the
Company to re-appoint Dr. Michael Anghel as an External Director (Dahatz) of the
Company. |
| |
The
term of office of Dr. Michael Anghel as an External Director (Dahatz) of the
Company expires on March 22, 2009. Dr. Anghel has been an External Director (Dahatz)
of Partner since March 23, 2006, and he is a member of the Audit Committee. From 1977 to
1999, he led the activities of Discount Investment Corporation Ltd. (of the IDB Group) in
the fields of technology and communications. Dr. Anghel was instrumental in founding
Tevel, one of the first Israeli cable television operators and later in founding Cellcom
– the second Israeli cellular operator. In 1999, he founded CAP Ventures, an
advanced technology investment company. From 2004 to 2005, Dr. Anghel served as CEO of
DCM, the investment banking arm of the Israel Discount Bank. He has been involved in
various technology enterprises and has served on the Boards of Directors of various major
Israeli corporations and financial institutions including Elron, Elbit, Nice, Gilat,
Scopus, ECI, American Israeli Paper Mills, Maalot (the Israeli affiliate of Standard and
Poor’s) and Hapoalim Capital Markets. He currently serves on the Boards of Directors
of Syneron Medical Ltd., Lumus Ltd., Evogene Ltd., Gravity Visual Effects and Design
Ltd., Analyst Provident Funds Ltd., the Strauss Group, Orbotech Ltd. and Dan Hotels Ltd.
Prior to launching his business career, Dr. Anghel served as a full-time member of the
Recanati Graduate School of Business Administration of the Tel-Aviv University, where he
taught finance and corporate strategy. He currently serves as Chairman of the Tel-Aviv
University’s Executive Program. Dr. Anghel holds a B.A. (Economics) from the Hebrew
University in Jerusalem and an M.B.A. and Ph.D. (Finance) from Columbia University in New
York. To the best knowledge of the Company and the Company’s Directors, Dr. Anghel
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. |
| |
Dr.
Anghel was determined by the Board of Directors to be an “accounting and
financial expert” under the Israeli Companies Law. |
| |
It
is proposed that Dr. Anghel’s remuneration shall remain the same and shall continue
to apply to the additional term of three years. |
| |
Regulations
promulgated under the Israeli Companies Law, the Companies Regulations (Rules for the
Compensation and Expenses for an External Director), 2000, as amended (the “Regulations”),
allow for several methods of remuneration of the External Directors (Dahatzim)
and for reimbursement of certain expenses to External Directors (Dahatzim). |
| |
The
Regulations allow the Company to remunerate the External Directors according to the “relative
method,” which is relative to the remuneration that a company pays its “other
directors” (as defined in the Regulations). We wish to continue remunerating Dr.
Anghel according to the “relative method” of remuneration under the
Regulations, by paying Dr. Anghel the same remuneration that the Company pays its two
“other directors” (Messrs. Galil and Gissin) and its other External Director
(Mr. Vidman). Therefore, we wish to pay Dr. Anghel, commencing from the date of
the EGM,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 (set in the Regulations), 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. |
2
| |
The
Audit Committee, the Board of Directors and 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
Regulations. Such resolution shall continue to apply to Dr. Michael Anghel. |
| |
The
Audit Committee and Board of Directors have noted the personal interest of Dr. Anghel
and, in the event of his re-appointment, approved the payment of the Remuneration to Dr.
Anghel and approved the reimbursement of expenses to him as set forth in the Regulations.
No change is made to the resolution regarding options or to the terms of the
indemnification and insurance policies of Dr. Michael Anghel, which will continue in full
force and effect. |
| |
It
is proposed that at the EGM the following resolutions be adopted: |
| |
(i) |
“RESOLVED,
to re-appoint Dr. Michael Anghel as an External Director (Dahatz) of the
Company for one additional term of three years in accordance with the Israeli Companies
Law, commencing on the date of the EGM; |
| |
(ii) |
RESOLVED,
to approve the payment of the Remuneration and the reimbursement of expenses as set
forth in the Regulations to Dr. Michael Anghel. In the event that options will be granted
to Company directors, the Company will grant options to Dr. Michael Anghel in a manner
complying with the Regulations. No change is made to the existing terms of the
indemnification and insurance policies of Dr. Michael Anghel, which will continue in full
force and effect; and |
| |
(iii) |
RESOLVED,
that these resolutions are in the best interest of the Company.” |
The Board of Directors recommends
a vote FOR approval of these proposed resolutions.
For the shareholders’ convenience,
below is the item on the agenda, not subject to the Regulations Procedure:
| 2. |
Approval
of certain Amendments to the Company’s 2004 Share Option Plan. |
| |
For
further details in respect of the item above and the complete wording of the proposed
resolutions, kindly see the Proxy Statement distributed with this Deed of Vote by the
Company on March 17, 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, between Sunday and 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 Form 6-K 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.
3
The required majority
for each of the items on the agenda:
The vote of the holders of a majority
of the Company’s Ordinary Shares NIS 0.01 par value each (“Ordinary
Shares”) participating at the EGM and voting on the matter will be required for
the approval of the item covered by the Regulations Procedure (item no. 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; 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.
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 item no. 2, to which the Regulations Procedure does not apply.
Notice of disclosure in
respect of 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) in the Company. 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.
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 of the Tel-Aviv Stock Exchange Ltd.
(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 item no. 1
in the agenda is: April 2, 2009.
The deadline for submission of the
Board of Directors’ response to Position Notices is: April 10, 2009.
4
The Deed of Vote and
Position Notices 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 an Exchange member, is entitled to receive the ownership certificate in the branch
of that Exchange member or by 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 Exchange member who holds
the shares on 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 also
apply to Position Notices.
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 March 11, 2009, the amount of
shares equivalent to five percent of the Company’s voting rights is: 7,676,132
Ordinary Shares.
As of March 11, 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: 3,729,127 Ordinary Shares.
Marking of Vote in the
Deed of Vote:
Shareholders shall mark their vote
regarding the item on the agenda, to which the Regulations Procedure applies (item 1), in
the second part of this Deed of Vote.
5
Partner Communications
Company Ltd.
Addendum
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: Wednesday, April 22, 2009 at 10:00a.m. Israel time.
Type of meeting: Extraordinary
general meeting
The Record Date: March 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: ___________________________________
6
|
|
|
|
|
|
|
| Item No.
|
Subject of the Resolution
|
Vote 1
|
In respect of
appointment of
External Director
(section 239(b)) of the
Israeli Companies
Law – do you have a
“controlling party”
interest 2?
|
| |
|
For
|
Against
|
Abstain
|
Yes 3
|
No
|
| (1)
|
Approval of the re-appointment of Dr. Michael Anghel as an
External Director (Dahatz) and that no change is made to his
Remuneration or to the provisions of his director's
indemnification and the director's insurance policies.
This item is subject to the Regulations Procedure.
|
|
|
|
|
|
| (2)
|
Approval of certain amendments to the company's 2004 Share
Option Plan.
This item is not subject to the Regulations Procedure.
|
|
|
|
Irrelevant
|
|
| Please detail why you are considered
being, or acting on behalf of, “Controlling Party” in the Company? |
| |
|
|
|
|
|
|
1 If an X is not marked in either column, the vote shall be considered as an
abstention on the relevant item
2 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.
3 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.
7
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 box, or if an X is marked in both
boxes, the vote shall be disqualified)4:
| 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, as amended (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. |
For your convenience, a translation
of sections 21-24 of the License is attached as Annex “B” to the Proxy
Statement distributed with this Deed of Vote.
Date: __________________ |
|
——————————————
Signature
Name (Print): ______________
Title: ___________________
Date: ___________________ |
4 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.
8
DEED OF AUTHORISATION
| To: |
Partner
Communications Company Ltd. (the “Company”) |
| Attn: |
Vice
President – Legal and Regulatory Affairs and Joint Company Secretary |
Re:
Extraordinary General Meeting of Shareholders to be held on
Wednesday, April 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 agenda5:
| Item No. |
Subject of the Resolution |
Yes6 |
No |
| (1) |
Approval of the re-appointment of Dr. Michael Anghel as an
External Director (Dahatz) and that no change is made to his
remuneration or to the provisions of his director's
indemnification and the director's insurance policies. |
|
|
| (2) |
Approval of certain amendments to the company's 2004 Share
Option Plan. |
Irrelevant |
1
Name of shareholder.
2
A shareholder is entitled to give several Deeds of Authorisation, 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 Authorisation
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
The Israeli Companies Law of 1999, as amended, 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 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.
6
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.
| If yes, why do I have a
“Controlling Party” Interest in the Company?
|
| ________________________________________________________________________________________________________________________________________
|
| ________________________________________________________________________________________________________________________________________
|
| ________________________________________________________________________________________________________________________________________
|
| ________________________________________________________________________________________________________________________________________
|
| ________________________________________________________________________________________________________________________________________
|
| ________________________________________________________________________________________________________________________________________
|
I declare the
following7:
| 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, as amended (the “License”)8. |
| 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. |
|
Date: _____________ |
______________________
Signature |
|
|
Name: _________________
Title: __________________ |
7
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 Authorisation should be filed for each
quantity of Ordinary Shares in respect of which the shareholder intends to vote
differently.
8
A translation of sections 21-24 of the License is attached as Annex
“B” to the Proxy Statement distributed with this Deed of
Authorisation.
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: March 17, 2009