Incredimail 2010 Annual Report Download - page 53

Israeli Companies Law Requirements
Under the Israeli Companies Law, the board of directors of a public company must establish an audit committee. The audit committee
must consist of at least three directors and must include all of the external directors. The audit committee may not include the chairman of the
board, any director employed by the company or providing services to the company on an ongoing basis, a controlling shareholder or any of the
controlling shareholder’s relatives.
The audit committee provides assistance to the board of directors in fulfilling its legal and fiduciary obligations in matters involving our
accounting, auditing, financial reporting, internal control and legal compliance functions by approving the services performed by our
independent accountants and reviewing their reports regarding our accounting practices and systems of internal accounting controls. The audit
committee also oversees the audit efforts of our independent accountants and takes those actions as it deems necessary to satisfy itself that the
accountants are independent of management. Under the Israeli Companies Law, the audit committee is also required to monitor and approve
remedial actions with respect to deficiencies in the administration of the company, including by consulting with the internal auditor and
recommend remedial actions with respect to such deficiencies, and to review and approve related party transactions.
On December 20, 2010 our Audit committee had been authorized by the Company's board of directors to act as the financial statements
review committee in accordance with the new Israeli Companies regulations with respect to the procedure in which financial statements should
be approved by companies. Such regulations require, among others, that a financial statements review committee shall discuss and prepare
recommendations to the board of directors about matters related to the financial statements such as: estimations, internal control procedures,
accounting policies, etc. The said regulations permit that the audit committee shall act as the financial statements review committee, provided
that the audit committee meets the requirements set forth in the regulations.
Compensation Committee
As a foreign private issuer, we comply with our home country regulations with respect to the compensation committee. Unlike the
Nasdaq Marketplace Rules, applicable to domestic issuer, which require that the determination of the compensation of an executive officer be
made by a majority of the independent directors on the board or a compensation committee comprised solely of independent directors, under the
Israeli Companies Law and the Company's article of association, the compensation of an executive officer, who does not serve on our board, can
be approved by the compensation committee, provided that such compensation is not considered as an Extraordinary Transaction, in which case
the approval of the audit committee followed by the approval of the board are required.
Under the Israeli Companies Law, "Extraordinary Transaction" - means a transaction not in a company’
s ordinary course of business, a
transaction that is not undertaken in market conditions or a transaction that is likely substantially to influence the profitability of a company, its
property or liabilities.
Our compensation committee is comprised of Tamar Gottlieb, Avichay Nissenbaum and David Jutkowitz, and operates pursuant to a
written charter. The compensation committee is authorized to approve on a yearly basis, the terms of compensation for officers who are not
directors, the issuance of employee share options under our share option and benefit plans and approve incentive compensation for our other
employees.
Nominating and Governance Committee
Our nominating and governance committee is comprised of Tamar Gottlieb and David Jutkowitz, and operates pursuant to a written
charter. It is responsible for making recommendations to the board of directors regarding candidates for directorships and the size and
composition of the board. In addition, the committee is responsible for overseeing our corporate governance guidelines and reporting and making
recommendations to the board concerning corporate governance matters. Under Israeli Companies Law, the nominations for director are
generally made by our directors but may be made by one or more of our shareholders. However, any shareholder or shareholders holding at least
5% of the voting rights in our issued share capital may nominate one or more persons for election as directors at a general meeting only if a
written notice of such shareholder’
s intent to make such nomination or nominations has been given to our secretary and each such notice sets
forth all the details and information as required to be provided under our articles of association.
45