Exhibit 3.1 

 

[Informal translation from Hebrew original]

 

Articles of Association of a Public Company Limited by Shares

 

The Companies Law, 5759-1999

  

Enlight Renewable Energy Ltd.

  

 

Interpretation

 

In these Articles of Association, unless the wording of the text requires another interpretation:

 

These “Articles of Association” or the “Articles”	-	Means these Articles of Association, in the form herein or as amended from time to time by the shareholders;
The “Company”	-	Means Enlight Renewable Energy Ltd., public company number 520041146.
The “Board of Directors”	-	Means the board of directors of the Company, appointed in accordance with the provisions of these Articles;
The “Companies Law” or the “Law”	-	Means the Companies Law, 5759-1999, as amended from time to time;
The “Companies Ordinance” or the “Ordinance”	-	The provisions of the Companies Ordinance [New Version], 5743-1983, that have not been annulled, as amended from time to time;
The “Securities Law”	-	Means the Securities Law, 5728-1968, as amended from time to time;
The “Office”	-	Means the registered office of the Company as it may be from time to time;
The “Shareholders Register”	-	Means the register of shareholders of the Company, administered in accordance with the Companies Law and the provisions of these Articles;
“Writing”	-	Means printed, photocopied, telegram, telefax, facsimile, email, and any other form of writing, creating or imprinting of words in a visible manner;
“Resolution with a Regular Majority”	-	A resolution passed in a general meeting (whether an annual meeting or a special meeting) with a majority of the votes represented in such meeting in person or  by proxy and voting thereon, and without taking into account abstentions;
“Administrative Proceeding”	-	A proceeding under Chapters H3 (Imposition of a Financial Sanction by the Israel Securities Authority), H4 (Imposition of Administrative Enforcement Means by the Administrative Enforcement Committee) or I1 (Arrangement to Prevent Taking Proceedings or Ceasing Proceedings, Contingent on Terms) of the Securities Law;

  

Subject to the provisions of this Article, unless the wording of the text requires another interpretation, terms that are defined in the Companies Law but are not defined in these Articles, shall have the meaning ascribed to such terms in the Companies Law. Words presented in the singular form will include the plural and vice-versa. Words presented in the male form will include the female. Words that relate to individuals will include corporations as well.

 

 

 

1.

Objectives of the Company

 

Subject to the provisions of the Company’s Articles of Association, the Company may engage in any legal business. However, the primary area of activity of the Company will be the field of renewable energy.

 

2.

Limitations of Liability

 

2.1.

The liability of a shareholder of the Company for the debts of the Company is limited to the amount that must be paid thereby for the shares held by the shareholder, and in any event, an amount that is no less than the par value of any share held thereby.

 

2.2.

In the event of an allocation by the Company of shares for a consideration that is lower than their par value, as set forth in Section 304 of the Companies Law (the “Reduced Consideration”), the liability of the shareholder will be limited to the payment of the Reduced Consideration for the shares allocated to the shareholder as set out in this paragraph above.

 

3.

Articles of Association of the Company

 

3.1.

These Articles may only be amended by a Resolution with a Regular Majority.

 

3.2.

No change will be performed to the Articles of Association that prejudices the rights of a class of shares without the consent of a meeting of the holders of the same class of shares.

 

3.3.

Notwithstanding the provisions of these Articles, an amendment to these Articles that requires a shareholder to purchase additional shares or to increase the scope of its liability will not bind any shareholder without such shareholder’s consent.

 

4.

Share Capital

 

4.1.

The registered share capital of the Company is NIS 18,000,000 (eighteen million New Israeli Shekels), divided into 1,800,000,000 (one billion and eight hundred million) ordinary shares par value NIS 0.01 each (the “Shares” or the “Ordinary Shares”).

 

4.2.

All of the ordinary shares have equal rights between them for all intents and purposes, and each ordinary share confers upon the holder the following rights:

 

4.2.1.

A right to be invited to and participate in the general meetings of shareholders of the Company, and the right to one vote for each ordinary share in every vote of every general meeting of the Company in which the holder participates;

 

4.2.2.

A right to receive dividends, if distributed, and a right to receive bonus shares if and when distributed – all on a pro rata basis according to the par value of the shares, and without taking into account any premium paid thereon;

 

  

4.2.3.

The right to participate in the distribution of surplus assets of the Company after its liquidation in accordance with its relative share of the Company’s issued share capital;

 

4.2.4.

The above will not derogate from the right of the Company to create shares of different classes, as set forth in these Articles below and under any applicable law.

 

5.

Change of the Registered Capital and Changes of Rights

 

5.1.

The general meeting of the shareholders of the Company may, with a Resolution with an Ordinary Majority, and subject to Section 46B of the Securities Law and any applicable law:

 

5.1.1.

Increase its share capital, in an amount that will be resolved upon, by the creation of new shares, under the terms and with the rights as determined. A resolution as aforementioned may be passed whether all of the existing shares have been issued or a resolution has been made regarding the issuance thereof, and whether they have not yet been issued and no resolution has been made regarding the issuance thereof yet.

 

Unless determined otherwise in a resolution of the meeting of the shareholders regarding the increase of capital, all of the new share capital will be considered part of the original share capital of the Company and will be subject to the same provisions of these Articles with respect to payment of calls for payment, pledge right, transfer, ownership, forfeiture or otherwise, applicable to the original share capital;

 

5.1.2.

Consolidate its share capital, in whole or in part, and divide it to shares with par value that is higher than the current par value;

 

5.1.3.

Split its shares, in whole or in part, into shares with a par value that is less than the current par value, provided that a share that is not repaid in full will be split into shares which will have a ratio of paid to unpaid shares as the ratio that existed between the paid amount and the unpaid amount before the split;

 

5.1.4.

To change, terminate, convert, expand, add or change in another manner the rights, excess rights, advantages, limitations and provisions related or that are not related at the time to the shares of the Company;

 

5.1.5.

To cancel any registered share capital that has not yet been allocated, provided that there is no obligation of the Company, including a contingent obligation, to allocate shares from the said registered capital;

 

5.1.6.

To reduce its share capital in the same manner, under the same terms and subject to the receipt of the approvals required under the Companies Law.

 

  

5.2.

The rights conferred to shareholders will not be considered to have been changed by the creation or issuance of additional shares that are pari passu with them, unless stated otherwise in the terms of issuance of such new shares.

 

5.3.

A change, conversion, termination, expansion, addition or other change to rights, excess rights, advantages, limitations and provisions related to a certain type of shares issued to shareholders of the Company are subject to the consent of the holders of the outstanding shares of such class of shares; consent will be deemed to have been provided if the owners of all outstanding shares of said class of shares consent in writing, or by a Resolution with a Regular Majority that is passed at a general meeting of the shareholders of such class of shares.

 

5.4.

The provisions of these Articles of Association regarding general meetings will apply, mutatis mutandis, to any meeting of the holders of a class of the Company’s shares.

 

5.5.

In order to perform any resolution as set forth above, the Board of Directors may settle, as it sees fit, any difficulty that may arise. Without derogating from the power of the Board of Directors as aforementioned, in the event that as a result of a consolidation of capital, fragments of shares remain for shareholders whose shares have been consolidated, the Board of Directors may:

 

5.5.1.

Sell all the fragments, and in order to do so, may appoint a trustee, in whose name share certificates in respect of the fragments will be issued, who will sell them, and the consideration received, less fees and expenses, will be distributed to the entitled persons;

 

5.5.2.

Allocate to all shareholders for which the consolidation results in fragments of shares, fully paid up shares of the applicable class of shares existing prior to the consolidation, in such a number that the consolidation thereof with the fragment will form one complete consolidated share; such allocation will be deemed effective shortly before the consolidation;

 

5.5.3.

To determine that the shareholders will not be entitled to receive a consolidated share for a fragment of a consolidated share arising from the consolidation of half or less than the number of shares the consolidation of which creates one consolidated share, and will be entitled to receive a consolidated share for a fragment of a consolidated share arising from the consolidation of more than half of the number of the shares the consolidation of which creates one consolidated share;

 

5.5.4.

In the event that an action under paragraphs 5.5.2 or 5.5.3 above requires the issuance of additional shares, payment therefor will be performed in the same manner in which payment for bonus shares is performed, provided that is permissible under applicable law. Consolidation and splitting as set forth above will not be considered a change to the rights of shares that are the subject of consolidation or splitting.

 

  

5.6.

In any event of consolidation of shares to shares with a large par value, the Board of Directors may determine arrangements in order to overcome any difficulty that may arise in connection with consolidation, and in particular, it may determine which shares will be consolidated to such or other share, and in the event of a consolidation of shares that are not owned by one owner, it may set forth arrangements for the sale of the consolidated share, the manner of its sale and the manner of the distribution of the consideration (net) and to appoint a person in order to perform the transfer, and any action performed by such person will be effective and no claims may be made against such actions.

 

5.7.

The securities of the Company will be under the supervision of the Board of Directors, which may allocate them or grant them at its discretion, subject to the provisions of any applicable law and the provisions of these Articles of Association. The Board of Directors of the Company may:

 

5.7.1.

issue shares and other securities, convertible or exercisable to shares, up to the limit of the registered share capital of the Company, and it may allocate them (or handle them in another manner) in consideration for cash or other, non-cash, consideration, with the same qualifications and terms, whether at a premium, par value or discount, on the same dates as it finds fit, and to grant to any person a right to demand the allocation of any shares during the same period and against consideration, as determined by the Board of Directors; and

 

5.7.2.

resolve to issue a series of bonds pursuant to its authority to borrow on behalf of the Company, and within the limitations of such authority.

 

5.8.

Unless resolved otherwise by the general meeting in a Resolution with a Regular Majority, in the event of any offer for sale of shares to a shareholder, there is no obligation to make a similar offer to all holders of shares of the Company. The Board of Directors may offer for sale securities of the Company to whomever it sees fit, whether the offerees or some of them are owners of securities of the Company or otherwise, all subject to the provisions of any applicable law, the provisions of the Articles of Association and the agreements applicable to the Company on the date of the allocation.

 

5.9.

Upon the allocation of shares, the Board of Directors may determine various terms for the shareholders with respect to the consideration, payment of calls for payment and/or payment dates.

 

5.10.

With the prior consent of the general meeting by a Resolution with a Regular Majority, the Board of Directors may convert shares that have been repaid in full to stock, and may, with the aforesaid consent, convert again the stock to fully paid up shares, at any cost.

 

  

5.11.

The holders of outstanding stocks may transfer the stock, in whole or in part, in the same manner and in accordance with the same or similar terms, as permitted by the circumstances, in the same manner as they were able to transfer, before the conversion, the shares from which the stock was created, and the Board of Directors may determine from time to time the minimal quantity of stock that may be transferred, and limit or prohibit the transfer of amounts that fall below the same minimum; however, the minimum will not exceed the nominal amount of all of the shares from which the stock is created.

 

5.12.

Holders of stock will have, in accordance with the amount of stock that they hold, the same rights and discounts with respect to dividends and other matters as if they held shares from which the stock was created. Further, the said rights and discounts, other than the right to participate in dividends and profits of the Company, will not be acquired by part of the stock that, if it were shares, would not grant to the holder the same right or discount.

 

5.13.

The same articles of the Company, other than those that relate to bearer share certificates, which apply to fully paid up shares, will also apply to stocks, and the words “shares” and “shareholder” set forth therein will also include “stock” and “stockholder.”

 

6.

Ownership of the Shares

 

6.1.

The Company may treat the registered holders of a share as the absolute owners thereof, and accordingly, will not be required to recognize any claim in equity or otherwise regarding such a share, or regarding a benefit therein to any other person, unless directed otherwise by an order of a competent court or the Companies Law as otherwise required by applicable law. The provisions above will not apply to a nominee company, as defined under the Companies Law.

 

6.2.

In the event that the Company receives a request for registration as a shareholder in the register by a person that is registered as the owner of the same shares with a stock exchange member, and such shares are registered in the registry in the name of a nominee company, the Company will list such person in the register of shareholders if the provisions of Article 8 below are satisfied, as well as the following terms:

 

6.2.1.

The requesting party has provided the Company with an undertaking from the stock exchange member with which its shares are registered to inform the Company of the new holdings of the requesting person immediately upon the performance of an action that changes its holdings in a share.

 

 

6.2.2.

The requesting person undertook in writing vis-à-vis the Company to inform it of the performance of actions as set forth above.

 

6.3.

In the event that two or more individuals are registered as joint holders of a share, each of them may provide binding receipts for any dividend, shares, bonus shares, share certificates, bonds, options or any other funds or rights with respect to the share, irrespective of whether such dividend, share, bonus share, share certificate, bonds, options or any other funds or rights were delivered or provided to the other joint holder.

 

6.4.

The Company may pay, at any time, a fee to any person for its signature or consent to sign, whether unconditional or with conditions, on any share, bond or series of bonds of the Company or its consent to obtain a signature, whether unconditional or with conditions, on any share, bond or series of bonds of the Company, all subject to the provisions of the Companies Law.

 

6.5.

 

6.5.1.

The guardians and managers of the estate of a deceased shareholder or, where there is no estate manager or guardian, the individuals who have a right as inheritors of the deceased shareholder, will be the only individuals that the Company will recognize as holders of the right to the share that was registered in the name of the deceased shareholder, unless a court gives an order instructing otherwise.

 

6.5.2.

In the event that a share is registered in the name of two or more holders, the Company will only recognize living holder(s) as having the right to the share or benefit therein, subject to the provisions of the Articles of Association and the provisions of any applicable law.

 

6.5.3.

A partner in the ownership of a share may transfer its right to shared ownership subject to the provisions of the Articles of Association.

 

6.5.4.

The Company may recognize a receiver or liquidator of a shareholder that is a corporation undergoing winding up or liquidation, or a trustee in bankruptcy or a guardian of a legally incompetent person, as a holder of a right to shares registered in the name of such a shareholder.

 

6.6.

Any person that becomes holder of a right to a share following the death of a shareholder may, in presenting evidence of a probate order or appointment of a guardian or an inheritance order, indicating that it has the right to shares of the deceased shareholder, be registered as a shareholder for the said shares, or may, subject to the consent of the Board of Directors under these Articles of Association, transfer the same shares.

 

 

7.

Share Certificates

 

7.1.

The share certificates will be issued with the stamp of the Company and the signature of two directors or the signature of the secretary of the Company and one director or another person, as determined by the Board of Directors.

 

7.2.

Each member will be entitled to receive, within six months from the date of the allocation or the registration of the transfer, one share certificate for all of the shares registered in its name and for which the consideration has been paid in full, or, if the Board of Directors so approves, a number of share certificates for the shares registered in its name.

 

7.3.

Each share certificate will list the number of shares with respect to which it was issued, and any other important detail in the opinion of the Board of Directors or that must be stated under any applicable law.

 

7.4.

A certificate in respect of shares registered in the names of two or more owners will be provided to the person whose name appears first in the register of shareholders from the names of the joint holders, and the Company will not be required to issue more than one certificate for all of the joint holders of shares. The delivery of such a certificate to one of the holders will be considered delivery to all of the holders.

 

7.5.

If a share certificate is destroyed, lost or corrupted, the Board of Directors may issue a new certificate in its place, provided that the certificate is delivered to the Board and destroyed by it or it is proven to the Board’s satisfaction that the certificate has been lost or destroyed, and the Board received guarantees to its satisfaction, for any potential damage, all for payment of consideration fee, if placed.

 

7.6.

The Company may issue to a shareholder a share deed in lieu of a named share. In the event that a share deed is issued in lieu of a named share, the share will be recorded in the register of shareholders regarding bearer shares, and the name of the shareholder will be removed from the register of shareholders.

 

7.7.

A shareholder that duly holds a share deed may return the deed to the Company in order to annul it and register the share in such holder’s name. Upon the annulment, the name of the shareholder and number of shares held by it shall be recorded in the register of shareholders.

 

8.

Transfer of Shares and Delivery

 

8.1.

The ownership of shares of the Company will not be amended in the register of shareholders of the Company, other than upon the fulfillment of one of the alternatives in Section 299 of the Companies Law, as stated in Article 35.4.4 below.

 

8.2.

A share transfer deed in the Company will be signed by the transferor and the transferee, and the transferor will be considered to remain a shareholder as long as the name of the transferee has not yet been recorded in the register of shareholders with respect to the transferred share.

 

 

8.3.

The share transfer deed will be in the following form or in a form as similar thereto as possible, or as approved by the Board of Directors:

 

  

8.4.

Together with the transfer deed, the Company must be provided with any document (including the certificate of the transferred share) that the Board of Directors requests in connection with the transfer. In the event that the transfer of the share was approved – all of the aforesaid documents will remain in the possession of the Company.

 

8.5.

Any transfer of not fully paid up shares will not have effect unless approved by the Board of Directors. The Board of Directors may, at its absolute discretion and without being required to provide reasons, refuse to register a transfer of not fully paid up shares.

 

8.6.

Any transfer deed will be provided to the Office for the purpose of registration. The transfer deeds that are recorded in the register will remain in the possession of the Company, but any transfer deeds that the Board of Directors refuses to record for reasons permitted under the Articles of Association or under the Companies Law will be returned upon demand to the party that provided them, together with the share certificate (if provided).

 

9.

Rights of a Shareholder

 

In addition to the rights of shareholders set forth in Article 4.2 above, every shareholder of the Company is entitled to the following rights:

 

 

9.1.

Each of the shareholders will have the right to review documents of the Company as set forth below:

 

9.1.1.

Minutes of general meetings;

 

9.1.2.

The register of shareholders and register of material shareholders of the Company;

 

9.1.3.

These Articles of Association and any amendments, as made from time to time;

 

9.1.4.

Any document that the Company must submit under the Companies Law and under any applicable law to the Israeli Companies Registrar or the Israel Securities Authority, and available for review by the public in the Israeli Companies Registrar or the Israel Securities Authority, as applicable;

 

9.2.

A shareholder is entitled to demand from the Company, while stating the purposes of the demand, to review any document in the possession of the Company relating to an action or transaction requiring approval of the general meeting under Section 255 and Sections 268 through 275 of the Companies Law.

 

9.3.

The Company may refuse the request of a shareholder if in the opinion of the Company, the request was submitted by a shareholder not in good faith or the documents requested contain a trade secret or patent, or the disclosure of the documents may harm the interests of the Company in a different manner.

 

10.

The Organs of the Company

 

10.1.

The organs of the Company are:

 

10.1.1.

The general meeting;

 

10.1.2.

The Board of Directors;

 

10.1.3.

The Chief Executive Officer;

 

The actions of an organ and its intentions are the actions of the Company and its intentions.

 

10.2.

The organs of the Company will have the following powers:

 

10.2.1.

The general meeting will have the powers set forth in Article 11 below.

 

10.2.2.

The Board of Directors will have the powers set forth in Article 21 below.

 

10.2.3.

The Chief Executive Officer will have the powers set forth in Article 28 below.

 

10.3.

Unless stated otherwise explicitly in these Articles, the Board of Directors of the Company may delegate any power of the Company that was not set forth in law or these Articles to a different organ of the Company.

 

 

10.4.

The general meeting may assume powers granted to the Board of Directors and/or any other organ of the Company for any matter essential to the proper management of the Company and/or any action that is required, in the opinion of the general meeting, for the interests of the Company and/or any other matter for a period of time that will not exceed the period of time required under the circumstances.

 

10.5.

The Board of Directors of the Company may assume authorities provided to the Chief Executive Officer of the Company on all matters essential to the proper management of the Company and/or any action that is required, in the opinion of the general meeting, for the interests of the Company and/or any other matter for a period of time that will not exceed the period of time required under the circumstances.

 

General Meetings

 

11.

The general meeting and its powers

 

11.1.

The resolutions of the Company regarding the following matters will be passed in a general meeting of the shareholders:

 

11.1.1.

Changes to the Articles of Association of the Company, as stated in Article 3 above;

 

11.1.2.

Use of the powers of the Board of Directors in the event that the Board of Directors of the Company is unable to fulfill its role, as set forth in Section 52(a) of the Companies Law or as set forth in Article 10.4 above;

 

11.1.3.

The appointment of the auditor of the Company, the termination of his term of appointment and determining the terms thereof, subject to the provisions of Article 31 below;

 

11.1.4.

The appointment of external directors in accordance with the provisions of Section 239 of the Companies Law and in accordance with Article 19 below;

 

11.1.5.

Approval of actions and transactions that require approval of the general meeting under the provisions of any applicable law;

 

11.1.6.

Increase and reduction of the registered share capital, as set forth in Article 5 above;

 

11.1.7.

Appointment of directors that are not external directors, as set forth in and subject to Article 19 below; and

 

11.1.8.

A merger as set forth in Section 320(a) of the Companies Law.

 

11.2.

The provisions of the Companies Law with regard to dates of convening general meetings of shareholders, the manner of convening them, the matters that will be discussed therein, the legal quorum, methods of providing notice, manner of voting, management of minutes and the like, will apply with regard to general meetings, special meetings and class meetings, excluding if determined explicitly in these Articles otherwise, and subject to the provisions of any applicable law.

 

  

12.

Convening an Annual General Meeting

 

12.1.

The Company will hold an annual general meeting of its shareholders each year, no later than the end of fifteen months after the previous annual general meeting.

 

12.2.

The agenda of the annual general meeting will include the following topics:

 

12.2.1.

A discussion of the financial statements and reports of the Board of Directors;

 

12.2.2.

Appointment of directors and determining their remuneration;

 

12.2.3.

Appointment of an auditor, subject to the provisions of Article 32(b) below;

 

12.2.4.

Any matter that the Board of Directors has determined will be included in the agenda of the annual general meeting;

 

12.2.5.

Matters that are requested of the Board of Directors by one or more shareholders that hold in the aggregate at least one percent (1%) of the voting rights at the general meeting, provided that this matter is suitable to be discussed in a general meeting.

 

13.

Convening a Special General Meeting

 

13.1.

The Board of Directors of the Company may convene a special general meeting of its shareholders, by making such a decision, and at the request of any of the following:

 

13.1.1.

Two directors or a quarter of the serving directors;

 

13.1.2.

One or more shareholders that hold, in the aggregate, at least five percent (5%) of the issued and outstanding share capital and one percent (1%) of the voting rights in the Company, or one or more shareholders that hold, in the aggregate, at least five percent (5%) of the voting rights in the Company.

 

13.2.

The agenda in a special general meeting will be determined by the Board of Directors and will also include matters for which the convening of a special meeting as set forth in Article 13 above is required, as well as a matter that is requested by a shareholder as set forth in Article 12 above.

 

13.3.

If requested as set forth in Article 14 below, the Board of Directors will call the convention of a special general meeting no later than twenty one days from the date on which the request was provided thereto, as set forth below; the date on which the special general meeting will convene will be detailed in the invitation that will be provided to the shareholders under Article 14 below, provided that such date is no later than 35 days from the date on which the invitation to convene was published.

 

14.

Notices Regarding Convening General Meetings

 

14.1.

The Company may determine an effective date with regard to the entitlement to receive invitations to general meetings, to participate and vote thereat, provided that the aforesaid date will not exceed 21 days and not be less than 4 days before the date determined for the convention of the general meeting.

  

 

14.2.

Subject to the provisions of Section 69 of the Companies Law, a notice of the convention of a general meeting of the shareholders will be provided to all of the shareholders entitled thereto, by the publication in two daily Hebrew newspapers published in Israel and with reasonable distribution.

 

15.

Discussions in General Meetings

 

15.1.

The general meeting may discuss any matter as set forth by the Companies Law and these Articles of Association, and any matter on the agenda, as will be set out in the notice of convening the general meeting.

 

15.2.

The legal quorum for holding a general meeting is the presence of at least one shareholder that holds at least twenty-five percent (25%) of the voting rights, within half an hour from the time determined for the commencement of the meeting.

 

15.3.

No matter should be discussed in a general meeting unless a legal quorum is present within half an hour from the time determined for the commencement of such general meeting. In the event that a legal quorum is not present at the end of half an hour from the time determined for the commencement of such general meeting, the general meeting will be adjourned by seven days, to the same day and at the time and in the same place, or another date and/or place, if so stated in the invitation to or notice of said general meeting (hereinafter: an “Adjourned Meeting”).

 

15.4.

In the event that the legal quorum set forth in Article 15.3 above is not present at the Adjourned Meeting half an hour after the scheduled time, the Adjourned Meeting will take place with any number of participants.

 

15.5.

Notwithstanding the provisions of Article 15.4 above, in the event that the general meeting was convened at the request of shareholders as stated in Article 13.1.2 above or under Section 64 of the Companies Law, the Adjourned Meeting will only take place if at least the number of shareholders required to convene a general meeting as stated in Article 13.1.2 above is present.

 

15.6.

A general meeting that has a legal quorum may decide to adjourn the meeting to a later date and place to be determined. In the Adjourned Meeting, only matters on the agenda of the original meeting and for which no resolution was passed will be discussed.

 

15.7.

In the event that a general meeting as stated in Article 15.6 above is adjourned to a date later than twenty one days, notices will be provided for the adjourned general meeting in the matter set out in Article 15 above.

 

 

16.

Chairman of the General Meeting

 

16.1.

The chairman of the Board of Directors or a person that he appoints in writing on a permanent basis or for a specific meeting will serve as chairman of the general meeting.

 

16.2.

In the event that a chairman of the Board of Directors is not appointed or is not present or has not appointed a chairman for a general meeting, the chairman of the general meeting will be a person selected by the general meeting from the members of the Board of Directors present, and if no director is present – a person selected by the general meeting from the participating shareholders.

 

17.

Vote in the General Meeting

 

17.1.

Subject to and without derogating from the rights or limitations existing at any time in connection with a special class of shares constituting part of the Company’s share capital, each member is entitled to one vote for each share granting a voting right held thereby or for which it grants power of attorney to vote. A shareholder will be entitled to participate and vote at a general meeting, whether by themselves, by proxy or by a proxy card, if it has provided to the Company confirmation of ownership as set forth in the Articles enacted in this regard, as of the effective date as determined in the notice of convening the general meeting, that is no later than 21 days and no earlier than 4 days before the date determined for such general meeting to convene.

 

17.2.

If a shareholder is a minor, bankrupt or legally incompetent, or in the event of a corporation, is undergoing receivership or liquidation, it may vote through its trustees, receivers, natural or other legal guardians, as the case may be, and such trustees, receivers, natural or other legal guardians may vote themselves or by proxy.

 

17.3.

In the event of two or more shareholders that are joint holders of a share and are present and voting – only the vote of the head of the joint owners present and voting will be taken into consideration, and the votes of the other joint owners will not. For this purpose, the head of the joint owners will be considered the person whose name is recorded first in the register of shareholders from those present and voting.

 

17.4.

A shareholder may appoint a proxy to vote in his or her place, who does not have to be a shareholder of the Company. The appointment of a representative or proxy to participate and vote at a meeting on behalf of the shareholder will be in writing, hand-signed by the shareholder or such shareholder’s proxy that is authorized in writing, or in the event that the appointing party is a corporation, the document must bear binding signatures in accordance with the articles of association of the same corporation. If the appointing party is a corporation, confirmation of an attorney will be attached to the power of attorney stating that such power of attorney was signed in accordance with the articles of association of the same corporation. Subject to the provisions of the Companies Law, a shareholder may also vote through a proxy card.

 

 

17.5.

A vote in accordance with the terms of a power of attorney will be legal even if prior thereto, the appointing party died or was declared bankrupt or legally incompetent or terminated the letter of appointment or transferred the share with respect to which it was given or, if it is a corporation, a liquidator or receiver was appointed, unless a written notice was received regarding the aforesaid change at the Office at least one day before the meeting, or the place at which the meeting will convene, provided such notice was delivered no later than shortly before the general meeting commences.

 

17.6.

A letter of appointment of proxy or a power of attorney or other certificate (if any) or a copy certified by a notary or attorney, as well as a proxy card, will be provided at such place as determined by the Board of Directors for the delivery of confirmation of ownership no later than 48 hours before the general meeting.

 

17.7.

A shareholder holding more than one share will be entitled to appoint more than one proxy subject to the provisions below:

 

17.7.1.

The letter of appointment will state the class and number of the shares with respect to which it was granted;

 

17.7.2.

In the event that the total shares of any kind set forth in the letter of appointment granted by one shareholder exceed the number of shares of the same class held thereby, all of the letters of appointment provided thereby in respect of the surplus shares will be null, without derogating from the effectiveness of the votes cast in respect of the shares held thereby;

 

17.7.3.

In the event that a proxy is appointed by shareholders and the letter of appointment does not state the number and class of shares in respect of which it was provided, the letter of appointment will be considered to have been provided in respect of all of the shares on the date on which the letter of appointment was provided to the Company or on the date on which it was provided to the chairman of the meeting, as applicable. In the event that the letter of appointment was provided in respect of a number of shares that is lower than the number of shares owned by the shareholder, the shareholder will be considered to have abstained from the casting the votes in respect of the balance of the shares owned by it, and the letter of appointment will only be effective in respect of the number of shares set forth therein.

 

17.8.

Each letter of appointment of proxy (whether for a specific meeting or otherwise) will be in the form as follows or a similar form to the extent permitted by the circumstances:

 

I, ___________, of ______________, am a shareholder of Enlight Renewable Energy Ltd. and am entitled to _______________ votes, and hereby appoint _______________of _______________, or in his/her stead, _______________ of _______________ to vote in my name and stead in the (annual / special / adjourned – as applicable) _______________ general meeting of the Company, which will take place on _______________ and in any adjourned meeting thereof. In witness whereof, I affix my signature on this day ________. 

 

  

18.

Passing Resolutions in the General Meeting

 

18.1.

In each general meeting, a resolution presented for a vote will be passed by the counting of votes.

 

18.2.

All resolutions in the general meeting, including resolutions regarding mergers, will be resolutions with a Regular Majority.

 

18.3.

The declaration of the chairman of the general meeting that a resolution in a general meeting has passed unanimously or with a specific majority or has not passed will be prima facie evidence thereof.

 

The Board of Directors

 

19.

The Directors and Manner of their Appointment

 

19.1.

The number of directors of the Company (including external directors) will not be less than five and will not exceed thirteen.

 

19.2.

Subject to the provisions of Article 19.7 below, each director of the Company will be elected with a resolution passed with a Regular Majority at an annual or special general meeting, and will serve in his or her role until the end of the subsequent annual general meeting. Provided, however, that until his or her replacement shall be dully elected or appointed, such director will continue to serve unless his or her office has been vacated pursuant to any applicable law or the Articles of Association.

 

19.3.

The Company will appoint as directors only individuals who are fit to serve as directors under any applicable law.

 

19.4.

Subject to the provisions of any applicable law, no director will be disqualified solely due to his service as a director in the Company from holding another position or role for which such director may be compensated by the Company or any other company of which the Company is a shareholder or has another interest in, or from entering into an agreement with the Company, whether as a seller or purchaser or otherwise, and no such agreement or other agreement or contract made by the Company or in its name, in which the director has any benefit, will be contested.

 

Additionally, a director will not be required to provide a report to the Company of any profit arising from the role or a profit-generating role as stated, or that comes as a result of an agreement as set out above, provided that such director has complied with the provisions of the Companies Law relating to a personal interest of a director.

 

19.5.

[Deleted]

 

19.6.

A director who vacated his office may be reappointed.

 

19.7.

The Board of Directors may, from time to time, appoint by a written resolution signed by all of the members of the Board of Directors, subject to the number of directors determined by the general meeting, an additional member to the Board of Directors.

 

 

By a resolution adopted with a Regular Majority of the Board of Directors, the appointment of a member of the Board of Directors who is appointed under this Article 19.7 may be terminated. The term of the appointments under this Article 19.7 will be until the end of the following annual general meeting.

 

19.8.

In the event that the office of a director is vacated for any reason, the directors serving may appoint a director in his or her place, and such director will serve through the term his predecessor would have served had the office not been vacated. As long as the number of directors does not exceed the maximum number, the directors may appoint additional directors up to the maximum number permitted, and the appointments will be effective until the upcoming general meeting in which directors are appointed.

 

19.9.

The Company may approve the appointment of a director such that the date of the commencement of such director’s term is later than the date of his appointment.

 

19.10.

With regard to the appointment of external directors, the provisions of the Companies Law will apply. Without derogating from the foregoing, the Company may, by a resolution passed with a Regular Majority, approve the appointment of an external director for two additional terms of three years each.

 

19.11.

A director may appoint a substitute director, all subject to the provisions of Section 237 of the Companies Law. The substitute director will be subject to the provisions of the Companies Law and these Articles of Association applicable to a director of the Company, and his office will be vacated upon the occurrence of the events set forth by law or the Articles due to which the office of the director who appointed him is vacated.

 

19.12.

The term of a member of the Board of Directors who is not an external director will expire automatically in each of the cases set forth in Section 228(a) of the Companies Law, and upon the occurrence of any of the following events:

 

19.12.1.

Upon his death.

 

19.12.2.

If he becomes legally incompetent.

 

19.12.3.

Without derogating from the above, the general meeting may, by a resolution passed with a Regular Majority, dismiss a director, even if he was appointed in a manner other than by the general meeting, if the general meeting decides that such director acted against the interests of the Company or in breach of a fiduciary duty vis-à-vis the Company, in which case the provisions of Section 230(a) of the Companies Law will apply regarding granting the director an opportunity to present his case before the general meeting.

 

20.

Salary of Directors

 

20.1.

Directors will not receive compensation from the Company unless the Company decides otherwise. A director is entitled to be reimbursed for its reasonable travel and other expenses related to its participation in meetings of the Board of Directors and the fulfillment of his role as a member of the Board of Directors.

  

 

20.2.

A director that provides the Company with special services or makes special efforts for one of the purposes of the Company will be entitled to compensation from the Company in the amount determined by the Company, and such compensation will be in addition to, or will replace, such director's regular compensation, if any, as determined by the Company.

 

20.3.

The compensation of a director for its service or for its employment in another role requires approval by the audit committee, the Board of Directors and the general meeting, as set forth in Sections 270(3) and 273 of the Companies Law.

 

20.4.

The external directors are entitled to compensation and reimbursement of expenses as set forth by law. Without derogating from the foregoing, exemptions from liability, undertakings of indemnification and insurance pursuant to the Companies Law or Article 30 below will not be considered compensation.

 

21.

Powers of the Board of Directors

 

21.1.

All of the powers and authorities for the management of the Company, excluding the same powers and authorities granted under law to the general meeting, will be granted to the Board of Directors. Without derogating from the generality of the above and the powers of the Board of Directors that are granted thereto under these Articles of Association, the Board of Directors will outline the policy of the Company and supervise the performance of the roles of the Chief Executive Officer and its actions, including:

 

21.1.1.

It will determine the plan of action of the Company, principals for financing and priorities among them;

 

21.1.2.

It will examine the financial state of the Company and determine the credit limit that the Company may take;

 

21.1.3.

It will determine the organizational structure and the compensation policy;

 

21.1.4.

It may resolve to issue a series of bonds;

 

21.1.5.

It will be responsible to prepare and approve the financial statements;

 

21.1.6.

It will appoint and dismiss the Chief Executive Officer;

 

21.1.7.

It will make resolutions regarding actions and transactions requiring its approval under the provisions of Sections 255 and 268 through 275 of the Companies Law;

 

21.1.8.

It may allocate shares and securities convertible to shares up to the limit of the registered share capital of the Company, as set forth in Article 5.7 above;

 

 

21.1.9.

It may resolve to distribute dividends and to purchase shares of the Company by the Company as stated in Article 33 below;

 

21.1.10.

It will express its opinion regarding a special tender offer as set forth in Section 329 of the Companies Law.

 

21.2.

The authorities of the Board of Directors under Articles 21.1.1 through 21.1.10 above may not be delegated to the Chief Executive Officer.

 

21.3.

Without derogating from the powers granted to the Board of Directors under any applicable law or under the Articles of Association, the Board of Directors is granted additional powers as follows:

 

21.3.1.

To appoint, and at its discretion, to remove or suspend a Chief Executive Officer, an officer, other employee or authorized party, whether employed on a permanent or temporary basis or for special services, as the board of directors sees fit from time to time, and to define the authorities and obligations and determine their pay and compensation, and demand guarantees in the cases and amounts as the Board of Directors sees fit.

 

21.3.2.

The Board of Directors may authorize the Chief Executive Officer, temporarily or otherwise, to appoint officers and other employees, to define their authorities and obligations and to determine their pay and terms of employment.

 

21.3.3.

At any time and from time to time, to grant a power of attorney to any person to be a representative of the Company for such purposes and with such powers and authorities, and to exercise discretion (which will not exceed the Board of Directors’ discretion under these Articles of Association) for such period and subject to such terms, as the Board of Directors sees fit from time to time.

 

Each such power of attorney may be granted by the Board of Directors to any company or its members, its board of directors, authorized parties or managers of any company, or to a person determined by any company or corporation.

 

21.3.4.

The Board of Directors may appoint on behalf of the Company an attorney or attorneys in Israel or outside of Israel to represent the Company before any court, arbitration, judicial or quasi-judicial bodies, entities or government, municipal or other bodies in or outside Israel, and to grant any attorney the powers that the Board of Directors sees fit, including the power to delegate its powers, in whole or in part, to another or others.

 

The Board of Directors may delegate this power on a permanent or temporary basis to the Chief Executive Officer.

 

21.3.5.

The Board of Directors may, at its discretion, at any time, borrow or provide guarantees to any amount or amounts in such manners, at such times and on such terms as it sees fit, including by issuing bonds or a series of bonds, whether secured or unsecured, or subject to any mortgage, pledge or any other security of the factory or the property of the Company, in whole or in part, whether existing or in the future, including unpaid share capital.

  

 

22.

Chairman of the Board of Directors

 

22.1.

The Company’s Board of Directors will choose one of its members to serve as chairman of the Board of Directors.

 

22.2.

The chairman of the Board of Directors will be chosen by the members of the Board of Directors at the Board of Directors’ first meeting after the annual general meeting, or at the Board of Directors’ meeting at which he was appointed as director, and shall serve as the chairman of the Board of Directors as long as otherwise decided by the Board of Directors or until the vacation of his office as a director.

 

23.

Convening Meetings of the Board of Directors

 

23.1.

The Board of Directors will convene for meetings according to the needs of the Company, and at least once every three months.

 

23.2.

The chairman of the Board of Directors is entitled to convene the Board of Directors at any time, and to the request of any of the following:

 

23.2.1.

Two directors;

 

23.2.2.

One director – if pursuant to Section 257 of the Companies Law.

 

23.3.

Without derogating from the foregoing, the chairman of the Board of Directors shall convene the Board of Directors if actions by the Board of Directors are necessary due to a notice from or the report of the Chief Executive Officer according to Section 122(d) of the Companies Law, or the report of the auditor of the Company according to Section 169 of the Companies Law.

 

23.4.

If a meeting of the Board of Directors was not convened within 14 days from the request date, as set forth in Article 23.2 above, or from the report date of the Chief Executive Officer or the auditor according to Article 23.3 above, each of the foregoing may convene a meeting of the Board of Directors for the purpose of that matter.

 

23.5.

Notice of the Board of Directors meeting shall be provided to each member of the Board of Directors a reasonable time prior to the meeting.

 

23.6.

The notice will be sent to the address of the director or to another location as directed by the director, all as provided in advance to the Company, and therein shall be noted the date and location of the meeting, as well as a reasonable explanation of the subjects on the agenda.

 

23.7.

Notwithstanding Article 23.2 above, in urgent situations, the Board of Directors may, upon the agreement of a majority of the directors, to convene a meeting without prior notice.

 

  

24.

Board of Directors Meetings and their Management

 

24.1.

The agenda of the Board of Directors meetings will be determined by the chairman of the Board of Directors and shall include the topics determined by the chairman, the topics determined as set forth in Articles 23.2 and 23.3 above and any topic that a director or the Chief Executive Officer requests from the chairman of the Board of Directors, a reasonable time prior to the convening of the Board of Directors meeting, to be included in the agenda.

 

24.2.

The chairman of the Board of Directors will manage the Board of Directors meetings. If the chairman of the Board of Directors was absent from a meeting, the Board of Directors will choose one of its members to manage the meeting and to sign the meeting’s minutes.

 

24.3.

The Board of Directors may conduct meetings by using any means of communication, provided that all of the participating directors can hear one another at the same time.

 

24.4.

The Board of Directors may adopt resolutions even without actually convening, provided that all of the directors entitled to participate in the discussion and vote on the matter brought for discussion, have consented thereto.

 

24.5.

If resolutions were adopted as set forth in Article 24.4 above, the chairman of the Board of Directors will record the resolutions in the minutes book and will affix thereto his signature or the signatures of the directors.

 

24.6.

A legal quorum for the commencement of a Board of Directors meeting shall be either of the following: half of the members of the Board of Directors, or three members of the Board of Directors among which one or more external directors.

 

24.7.

At each meeting of the Board of Directors where a legal quorum was present, the Board of Directors shall be authorized to exercise all of the authorities, powers of attorney and discretion granted at such time to the Board of Directors or generally exercised thereby.

 

25.

Voting at the Meetings of the Board of Directors

 

25.1.

Each director at a meeting of the Board of Directors shall have one vote.

 

25.2.

The resolutions of the Board of Directors shall be passed with a Regular Majority; the chairman of the Board of Directors shall not have an additional vote.

 

25.3.

A director in such capacity shall not enter into voting agreements and such agreements shall be deemed as a breach of the fiduciary duty of the director.

 

25.4.

The minutes approved and signed by the chairman of the meeting or by the chairman of the Board of Directors shall serve as prima facie evidence to the contents thereof.

 

 

26.

Committees of the Board of Directors

 

26.1.

The Company’s Board of Directors may establish committees of the Board of Directors, generally or for a specific matter, and to appoint members thereof from the members of the Board of Directors, and may from time to time terminate the granting of this authority (hereinafter: the “Board of Directors Committee”).

 

26.2.

A decision made or an action performed at the Board of Directors Committee, shall be considered as a decision made or action performed by the Board of Directors, unless the Board of Directors instructs otherwise.

 

26.3.

The Board of Directors Committee shall report to the Board of Directors on an ongoing basis regarding its decisions and recommendations. The decisions or recommendations of the Board of Directors Committee requiring the approval of the Board of Directors will be brought to the attention of the Board of Directors a reasonable time before the discussion by the Board of Directors.

 

26.4.

Articles 24 to 26 shall also apply, mutatis mutandis, to the convening of meetings of the committees and their management.

 

26.5.

The Company’s Board of Directors may not delegate its authorities to the Board of Directors Committee with regard to the following matters, except for the purpose of recommendation only:

 

26.5.1.

Determining the general policy of the Company;

 

26.5.2.

Distribution, as defined in Section 1 of the Companies Law, unless referring to the purchase of the Company’s shares in accordance with the instructions outlined in advance by the Board of Directors;

 

26.5.3.

Determining the position of the Board of Directors in matters that require the approval of the general meeting, or providing an opinion according to Section 329 of the Companies Law;

 

26.5.4.

The allocation of shares or of securities convertible to shares or exercisable to shares, or a series of bonds, excluding the allocation of shares due to the exercise or conversion of the securities of the Company;

 

26.5.5.

The approval of financial statements;

 

26.5.6.

The approval of the transactions and actions requiring the approval of the Board of Directors according to the provisions of Sections 255 and 268 to 275 of the Companies Law.

 

26.6.

The Board of Directors may dissolve Board of Directors Committees appointed thereby, however the dissolution shall not derogate from the validity of decisions of such Board of Directors Committee according to which the Company acted vis-à-vis another person who was not aware of its dissolution.

 

 

27.

Audit Committee

 

27.1.

The Board of Directors of the Company shall appoint an audit committee from among its members and the provisions of Article 26 above shall apply thereto, mutatis mutandis.

 

27.2.

The number of members of the audit committee shall not be less than three and its members will be appointed according to Section 115 of the Companies Law.

 

27.3.

The internal auditor of the Company shall receive notices of the convention of meetings of the audit committee and shall be entitled to participate in them. The internal auditor shall be entitled to request from the chairman of the audit committee to convene the committee for a discussion in a topic that will be detailed in his request, and the chairman of the audit committee will convene it within a reasonable time from the date of the request, if he sees a reason to do so.

 

27.4.

Notice regarding the convention of an audit committee meeting at which a matter relating to the audit of the financial statements will be discussed, shall be provided to the auditor of the Company, who may participate therein.

 

27.5.

The audit committee shall point out the deficiencies in the Company’s business management, inter alia, by consulting with the internal auditor and/or the auditors of the Company and shall propose ways to correct them to the Board of Directors. The audit committee shall decide whether to approve the actions and transactions requiring the approval of the audit committee according to Sections 255 and 268 to 275 of the Companies Law. Additionally, the audit committee shall have the authorities and roles as detailed in Section 117 of the Companies Law.

 

28.

Chief Executive Officer

 

28.1.

The Board of Directors may, from time to time, appoint one or more persons, whether directors or not, as the Chief Executive Officer or Chief Executive Officers of the Company, either for a determined date or an unlimited amount of time, and may, from time to time, in considering the terms of the entire contract between it or them and between the Company, release him, her or them from their office and appoint another or others in his, her or their place.

 

28.2.

The Chief Executive Officer is responsible for the ongoing management of the Company’s matters within the policy determined by the Board of Directors and pursuant thereto, and shall be under the supervision of the Board of Directors. The Chief Executive Officer shall have all of the management and executive authorities granted thereto by Law or these Articles of Association, any management and executive authorities not granted by Law or these Articles of Association to another organ of the Company as well as any authority granted thereto by the Board of Directors.

 

 

28.3.

The Chief Executive Officer may appoint a person, people or a corporation for the purpose of receiving and holding in trust for the benefit of the Company of any property belonging to the Company or which the Company has an interest in, or for any other purpose, and to perform and execute all of the actions and things required in connection with any such trust, as well as to pay the salaries of the trustee or these trustees;

  

28.4.

The Chief Executive Officer may develop, manage, defend, settle, or abandon any legal proceedings on behalf of the Company or against it or against its officers or relating in another manner to its matters as well as to settle or extend the repayment time or to remove any debt or actions or requirements of the Company or against it;

 

28.5.

The Chief Executive Officer may take any action or demand of the Company or against it to arbitration;

 

28.6.

The Chief Executive Officer shall submit to the Board of Directors a report of the ongoing operations of the Company on the dates and in the scope as shall be determined by the Board of Directors. The chairman of the Board of Directors may, at his initiative or according to the decision of the Board of Directors, request from the Chief Executive Officer a report regarding the Company’s business.

 

28.7.

The compensation of the Chief Executive Officer and the terms of his employment shall be as determined from time to time, taking into consideration the terms of any contract between him and the Company and pursuant to the provisions of the Companies Law, by the Board of Directors, and may be by way of a salary or commission in a certain percentage of a dividend, profits or revenues of the Company, or by participation in these profits, or in one or more of these manners. Where the Companies Law requires the approval of the general meeting regarding the contract with an officer, any such contract shall be subject to such approval.

 

28.8.

Subject to the provisions of any applicable law, including Section 92 of the Companies Law, the Board of Directors may, from time to time, delegate to the Chief Executive Officer the authorities granted to the Board of directors by these Articles of Association, as it shall see fit, and may grant authorities which will be exercised for such purposes and needs and at such times and subject to the conditions and limitations, as the Board of Directors sees fit. The Board of Directors may delegate such authorities and continue to hold them in parallel, or delegate them in place of the Board of Directors’ authority, in whole or in part, and may from time to time cancel, change and replace any such authority or all of them entirely.

 

28.9.

The Chief Executive Officer may, with the approval of the Board of Directors, delegate to another, subordinated thereto, from its authorities.

 

 

29.

Officers in the Company

 

The Board of Directors may from time to time appoint and terminate, and, pursuant to the provisions of any applicable law and as set forth in Article 21.3.5 above, authorize the Chief Executive Officer, regularly or on a one-time basis, to appoint other officers and employees, define their authorities and obligations and determine their compensation and the terms of their employment. The authority of the Board of Directors according to this Article shall not derogate from the authority of the Chief Executive Officer to appoint officers in accordance with the Companies Law. However, an officer terminated by the Board of Directors shall not be reappointed, except by the Board of Directors.

 

30.

Liability Insurance, Indemnification and Exemption

 

30.1.

Pursuant to the provisions of the Companies Law, the Company may enter into an officers liability insurance agreement, for liability imposed thereon due to an action performed as an officer of the Company, in respect of each of the following:

 

30.1.1.

The breach of the duty of care towards the Company or towards another person;

 

30.1.2.

The breach of the fiduciary duty towards it, and provided that the officer acted with good faith and had reasonable grounds to assume that the action would not harm the Company’s best interest;

 

30.1.3.

A financial liability imposed thereon for the benefit of another person;

 

30.1.4.

Payments to the injured party from the violation as set forth in Section 52BBB(a)(1)(a) of the Securities Law;

 

30.1.5.

Expenses in connection with an Administrative Proceeding conducted in such officer’s matter, including reasonable litigation expenses and including attorneys’ fees.

 

30.2.

Pursuant to the provisions of the Companies Law, the Company may indemnify an officer thereof in respect of a liability or expense, as detailed below, imposed thereon due to an action performed thereby in his capacity as an officer of the Company:

 

30.2.1.

A financial liability imposed thereon for the benefit of another person according to a judgment, including a judgment granted in a settlement or an arbitration ruling approved by a court;

 

30.2.2.

Reasonable litigation expenses, including attorneys’ fees, which the officer expended due to an investigation or proceeding conducted against him by an authorized authority to conduct an investigation or proceeding, and which ended without the submission of an indictment against him and without any financial liability being imposed on him as an alternative to a criminal proceeding, or which ended without the submission of an indictment against him but with the placement of a financial liability as an alternative to a criminal proceeding for a crime which does not require proving mens rea, or in connection with a financial sanction.

 

30.2.3.

Reasonable litigation expenses, including attorneys’ fees, which the officer expended or were imposed thereon by a court, in a proceeding instituted against him by the Company or on its behalf or by another person, or a criminal indictment from which he was acquitted, or a criminal indictment in which he was charged for a crime which does not require proving mens rea.

 

 

 

30.2.4.

Payments to the injured party of a violation, as set forth in Section 52BBB(a)(1)(a) of the Securities Law.

 

30.2.5.

Expenses paid in connection with an Administrative Proceeding conducted in his matter, including reasonable litigation expenses, and including attorneys’ fees.

 

30.2.6.

A liability or other expenses in respect of which the Company may indemnify pursuant to the Companies Law.

 

30.3.

The Company may indemnify an officer as set forth above after the occurrence of the indemnifiable event, and may also undertake in advance to indemnify an officer, provided that such undertaking is limited to the types of events that according to the Board of Directors may be indemnified, at the time of providing said undertaking, and in an amount that the Board of Directors determined is reasonable under the circumstances of the matter, for the liability imposed on such officer or an expense paid thereby or that will be imposed thereon, as set forth in Article 30.2 above, due to an action or inaction in his capacity as a director or officer of the Company. The undertaking for indemnification shall set forth the events which are, in the Board of Directors’ opinion, expected in light of the Company’s actual operations and the time of providing the undertaking as well as the amount or criterion which the Board of Directors determined are reasonable under the circumstances.

 

30.4.

Pursuant to the provisions of the Companies Law, the Company is entitled to undertake to indemnify, in advance, any person, including an officer serving on behalf of the Company or at its request as a director or officer of another company (including a foreign company) in which the Company holds shares, directly or indirectly, or that the Company has any interest therein (hereinafter: an “Officer Serving in Another Company”), due to a liability imposed thereon or an expense paid by him or imposed thereon, as set forth above, due to an action or inaction in his capacity as a director or Officer in Another Company.

 

30.5.

A decision regarding indemnifying and/or exempting from liability an officer and regarding the scope of indemnification shall be made by the Board of Directors as well as by any other entity in the Company whose approval is required by any applicable law at the time of such approval.

 

 

30.6.

The above provisions do not and shall not limit the Company in any manner in its engagement in insurance agreements and/or regarding indemnification:

 

30.6.1.

In connection with anyone who is not an officer in the Company, including employees, contractors or consultants of the Company who are not officers;

 

30.6.2.

In connection with the officers in the Company – if the insurance and/or indemnification are not prohibited explicitly according to any applicable law.

 

30.7.

Pursuant to the provisions of any applicable law, the Company may exempt in advance, an officer from his liability, in whole or in part, due to an injury caused to it due to a breach of the fiduciary duty towards it, with the exception of an exemption in advance of a director from his liability towards it due to a breach of the fiduciary duty in distributions.

 

30.8.

“Officer” in this Article 30 means, anyone who served from time to time in the Company as an officer, as this term is defined in Section 1 of the Companies Law, including an officer of the Company, serving on behalf of the Company in another company, including a subsidiary of the Company, and including a private company under the control of any of the abovementioned officers, through which he served as an officer of the Company and/or as an Officer in Another Company.

 

31.

Internal Auditor and Auditor

 

31.1.

Internal auditor:

 

31.1.1.

The Company’s Board of Directors shall appoint an internal auditor in accordance with the proposal of the audit committee.

 

31.1.2.

The chairman of the audit committee shall be the organizational superior of the internal auditor, unless otherwise determined by the Board of Directors and/or the audit committee.

 

31.1.3.

The internal auditor will submit his proposal for an annual or periodic work plan for the approval of the audit committee, and the audit committee will approve it with the changes as it sees fit.

 

31.1.4.

The internal auditor will submit a report of his findings to the chairman of the Board of Directors, the Chief Executive Officer and the chairman of the audit committee; the chairman of the Board of Directors or the chairman of the audit committee may instruct the internal auditor to conduct an internal audit, in addition to the work plan, where an urgent need therefor arises.

 

31.2.

Auditor:

 

31.2.1.

The general meeting will appoint an external auditor for the Company. Such auditor will serve in his position through one year from the general meeting at which he was appointed. The general meeting may in its decision to appoint the auditor to determine that the term of his appointment shall be longer than one year, but in event will the term exceed the third annual general meeting after the annual general meeting in which he was appointed.

 

  

31.2.2.

The Company may appoint several external auditors to jointly perform the audit.

 

31.2.3.

The compensation of the external auditor for the audit work shall be determined by the general meeting that appointed him, or by the Board of Directors if the general meeting did not or if the general meeting authorized the Board of Directors to determine the compensation. The Company’s Board of Directors shall determine the external auditor’s compensation for additional services provided to the Company, which are not audit services. The Board of Directors shall report to the annual general meeting regarding the external auditor’s salary for such additional services.

 

32.

Distributions, Dividends and Bonus Shares

 

32.1.

Distributions, dividends and the allocation of bonus shares shall be, subject to the Companies Law and these Articles of Association, as follows:

 

32.1.1.

The decision regarding a distribution, dividend and allocation of bonus shares will be made by the Company’s Board of Directors;

 

32.1.2.

The distribution of the dividend to the shareholders in the Company shall be performed to each shareholder in the Company in a manner relative to the par value of each share, unless determined otherwise in these Articles of Association, as amended, explicit rules regarding ranking appertaining to dividends with regard to one class of share or another;

 

32.1.3.

The Board of Directors is entitled to deduct from any dividend or other benefits, the sums that a shareholder owes to the Company in respect of the shares in respect of which the dividend or other benefit will be paid or granted, whether such sums are due or not.

 

32.2.

The Company may issue redeemable securities, all subject to Section 312 of the Companies Law and pursuant to the terms of such redeemable securities as will be determined in the issuance. The authority to issue redeemable securities is granted to the Company’s Board of Directors.

 

 

32.3.

The Board of Directors may, as it shall see fit and beneficial, appoint trustees or representatives for the holders of bearer share certificates who/which for a period of time, as determined by the Board of Directors, did not contact the Company to receive dividends, shares or other benefits of any kind or type, and for those shareholders registered by name that did not notify the Company of a change to their address and did not contact the Company to receive dividends, shares or other benefits throughout the term as stated above. These representatives or trustees will be appointed for realizing, collecting or receiving the dividends, shares and rights as stated, to sign the shares which have yet to be issued that are offered to the shareholders, but they will not be entitled to transfer or assign the shares for which they were appointed or to vote on their behalf or to transfer or assign rights which they are holding, as stated. In the terms of each trust or appointment of a representative, it will be stipulated by the Company that upon the first request by the holder of a share in respect of which the trustees or representatives were appointed, the trustees or representatives will be obligated to return to that holder of a share or to anyone that the Company will instruct for the share in question and all of the rights held thereby for them, all as applicable. Any action or arrangement performed by these representatives or trustees and any agreement between the Board of Directors and these representatives or trustees shall be valid and shall obligate anyone related to the matter.

  

32.4.

The Board of Directors may determine from time to time the manner of payment of the dividends or the distribution of bonus shares and any other rights and the arrangements in connection therewith, both to the shareholders registered by name and to the holders of bearer share certificates. Without derogating from the generality of the foregoing, the Board of Directors may pay all of the dividends or funds in respect of the shares by mailing checks to the addresses of the shareholders as registered in the Company’s register of shareholders.

 

33.

Calls for Payment

 

33.1.

The Board of Directors may at times, at its discretion or subject to the terms pursuant to which the shares were allocated, if such terms were determined, submit to the shareholders a call for payment with respect to the portion of the shares that has not been fully paid up by the shareholders, as the Board of Directors shall see fit, and provided that prior notice of at least fourteen days was provided regarding the call for payment, and each shareholder shall be obligated to pay the sum requested therefrom as stated on the dates and at the locations as determined by the Board of Directors.

 

33.2.

Joint holders of a share shall be obligated, jointly and severally to pay the amounts requested by the call for payment and the rates in connection with these calls.

 

33.3.

If the call for payment or the rate arising in respect of the share was not paid, the shareholder or the person to which it was allocated will be obligated to pay the linkage differentials and interest on the sum of the call for payment or the rate as determined by the Board of Directors commencing on the date designated for the repayment and concluding on the payment date. The Board of Directors may however waive the linkage differentials or the interest or a portion thereof.

 

 

33.4.

Any sum which must be, pursuant to the terms of allocation of the concerned shares, repaid at the time of the allocation or on a predetermined date, whether in respect of the par value of the share or whether a premium thereon, shall be considered under these Articles of Association as sums that have been validly called for payment and the due date is the date of allocation or the predetermined date, as applicable , and in the event of non-payment, all of the Articles hereof regarding the payment of linkage differentials and interest and expenses, forfeiture and the like and all other Articles pertaining thereto shall apply, as though such sum was validly called for payment.

 

33.5.

The Board of Directors, if it shall see fit, may accept from a shareholder payment in respect of all or any portion of the amounts unpaid in respect of such shareholder’s shares, in addition to the sums called for payment, and the Board of Directors may also pay to such shareholder interest and linkage differentials on the sums paid in advance or on that part of them exceeding the sum which at the time under discussion was called for payment in respect of the shares in relation to which the payment was performed initially, at a rate that the Board of Directors and the shareholder shall agree on, in addition to dividends which will be paid, if applicable, in respect of that part paid on the share in relation to which the payment was performed initially.

 

34.

Forfeiture of shares

 

34.1.

If a shareholder (hereinafter in this Article: the “Obligated Party”) did not fulfill the call for payment according to Article 33 above, the Board of Directors may, at any time thereafter, forfeit all of the shares in relation to which the Obligated Party was given notice regarding the call for payment.

 

34.2.

Subject to the provisions of any applicable law, the forfeiture of any share will be followed, at the time of the forfeiture, by a termination of any right in the Company and any claim or demand towards it in relation to the share.

 

34.3.

The forfeiture of a share in the Company shall include all of the dividends in respect of that share which were not paid before the forfeiture, even if declared.

 

34.4.

The Board of Directors may sell, reallocate or transfer in another manner any share that was forfeited in the manner that it shall decide, with or without any sum repaid for the share or considered repaid therefor. The shares which were forfeited and not yet sold shall be dormant shares, as defined in Section 308 of the Companies Law.

 

34.5.

If the consideration received for the sale of the shares forfeited exceeds the consideration for which the Obligated Party was obligated, the Obligated Party shall be entitled to the portion which was paid by the Obligated Party in respect of the shares, if any such amounts were paid, provided that the consideration remaining with the Company shall not be less than the consideration to which it was entitled from the Obligated Party with the addition of the expenses ancillary to the sale.

 

34.6.

The Board of Directors may at any time collect the forfeited funds or any part of them, as it shall see fit, but there shall not be any obligation thereon to do so.

 

 

35.

Register of Shareholders

 

35.1.

The Company shall keep a register of shareholders which shall include the following details:

 

35.1.1.

Name, ID no. and address of each shareholder, all as provided to the Company;

 

35.1.2.

The amount of shares and class of shares in the possession of each shareholder, noting their par value and the unpaid portion thereon, if the shares are not fully paid up;

 

35.1.3.

The allocation date of the shares or the date of their transfer to the shareholders, as applicable;

 

35.1.4.

If the shares are marked with serial numbers, the Company shall note, next to the name of the shareholder, the number of shares registered in the shareholder’s name.

 

35.2.

If there were dormant shares, as set forth in Section 308 of the Companies Law, in the Company, the number of such shares shall be recorded in the register and the date on which they became dormant.

 

35.3.

If the Company is keeping an additional register of shareholders, as set forth in Article 37 below, the amount of shares registered in the additional register of shareholders shall be noted as well as their serial numbers, if the shares are marked by serial numbers.

 

35.4.

The Company shall change the registration of ownership in the shares in the register of shareholders, as set forth in Article 36.1, in each of the events listed below:

 

35.4.1.

If the Company received a share transfer deed signed by the transferor and the transferee, and the requirements of the Articles of Association regarding the transfer of shares were fulfilled;

 

35.4.2.

If the Company received a court order to amend the register;

 

35.4.3.

If it was proven to the Company that conditions by law for assigning the right have been fulfilled;

 

35.4.4.

If another condition was fulfilled, which pursuant to the Articles of Association was sufficient to cause a change in the register of shareholders.

 

35.5.

The Company shall be entitled to close the register of shareholders for a reasonable amount of time as determined by the Board of Directors and provided that it shall not exceed 30 days each year. Regarding the closing of the register of shareholders, the Company shall publish a notice, at least 7 days prior thereto.

 

 

36.

Register of material shareholders and an additional register of shareholders outside of Israel

 

36.1.

The register of material shareholders shall contain the reports received by the Company pursuant to the Securities Law regarding the holdings of material shareholders of shares in the Company.

 

36.2.

The Company may keep an additional register of shareholders outside of Israel and in this regard all of the provisions of Section 138 of the Companies Law shall apply.

 

37.

The Signatory, Stamp and Authority of to Sign

 

37.1.

The Company may determine a rubber stamp or stamps to embed on the documents, and the Board of Directors shall ensure that each such stamp shall be kept in a secure place;

 

37.2.

The Board of Directors may authorize any person to act or sign on behalf of the Company, and their actions or signature shall obligate the Company, provided that such person acted or signed within his/her authority;

 

37.3.

The Board of Directors is authorized to use and hold a stamp outside of Israel, and to instruct the use thereof.

 

38.

Accounting

 

The Board of Directors is responsible for keeping the accounts and the publication of financial statements as determined in Sections 171 to 175 of the Companies Law and any other law applying on the Company.

 

39.

Donations

 

The Company may donate a reasonable sum to a proper cause, even if the donation is not within the Company’s business considerations. The Chief Executive Officer shall be authorized to implement this Article, provided that annual cumulative donations exceeding the higher of NIS 50,000 or USD 15,000 shall be brought for the approval of the Board of Directors.

 

40.

Keeping of Minutes

 

The Company shall conduct minutes of the proceedings in the general meetings, class meetings, Board of Directors meetings and meetings of the committees of the Board of Directors, and shall maintain them in its registered offices for a term of 7 years from the meeting date.

 

41.

Notices

 

Notices and other documents which must be transferred to the shareholders or any of them may be transferred by the Company to all of the shareholders personally or via registered mail in a duly stamped letter, to the location as registered by that shareholder in the register of shareholders or by providing notice to the shareholders or holders of any other kinds of rights by publishing in two daily Hebrew newspapers appearing in Israel in Hebrew and with a reasonable distribution, and such publication shall replace the provision of notices in person or by mail.

  

Exhibit 3.2 

 

Amended and Restated Articles of Association of a Public Company Limited by Shares

 

The Companies Law, 5759-1999

 

Enlight Renewable Energy Ltd.

 

 

Interpretation

 

In these Amended and Restated Articles of Association, unless the wording of the text requires another interpretation:

 

These “Articles of Association” or the “Articles”	-	Means these Amended and Restated Articles of Association, in the form herein or as amended from time to time;
The “Company”	-	Means Enlight Renewable Energy Ltd., public company number 520041146.
The “Board of Directors”	-	Means the board of directors of the Company, appointed or elected in accordance with the provisions of these Articles;
The “Companies Law” or the “Law”	-	Means the Companies Law, 5759-1999, as amended from time to time;
The “Securities Law”	-	Means the Securities Law, 5728-1968, as amended from time to time;
The “Office”	-	Means the registered office of the Company as it may be from time to time;
The “Shareholders Register”	-	Means the register of shareholders of the Company, administered in accordance with the Companies Law and the provisions of these Articles;
“Writing”	-	Means printed, photocopied, telegram, telefax or facsimile;
“Resolution with a Regular Majority”	-	A resolution passed in a general meeting (whether an annual meeting or a special meeting) with a majority of the votes represented in such meeting in person or  by proxy and voting thereon, and without taking into account abstentions;
“Administrative Proceeding”	-	A proceeding under Chapters H3 (Imposition of a Financial Sanction by the Israel Securities Authority), H4 (Imposition of Administrative Enforcement Means by the Administrative Enforcement Committee) or I1 (Arrangement to Prevent Taking Proceedings or Ceasing Proceedings, Contingent on Terms) of the Securities Law;

 

Subject to the provisions of this Article, unless the wording of the text requires another interpretation, terms that are defined in the Companies Law but are not defined in these Articles, shall have the meaning ascribed to such terms in the Companies Law. Words presented in the singular form will include the plural and vice-versa. Words presented in the male form will include the female. Words that relate to individuals will include corporations as well.

 

This English version of these Articles of Association shall be the governing version and any translations to Hebrew or otherwise shall be for convenience purposes only.

 

1.

Objectives of the Company

 

Subject to the provisions of the Company’s Articles of Association, the Company may engage in any legal business. However, the primary area of activity of the Company will be the field of renewable energy.

 

 

2.

Limitations of Liability

 

2.1.

The Company is a limited liability company and each shareholder’s liability for the Company’s debts is therefore limited to the payment of the unpaid portion of the full amount (par value and premium) such Shareholder was required to pay the Company for such shareholder’s shares.

 

2.2.

In the event of an allocation by the Company of shares for a consideration that is lower than their par value, as set forth in Section 304 of the Companies Law (the “Reduced Consideration”), the liability of the shareholder will be limited to the payment of the Reduced Consideration for the shares allocated to the shareholder as set out in this paragraph above.

 

3.

Articles of Association of the Company

 

3.1.

These Articles may only be amended by a Resolution with a Regular Majority.

 

3.2.

Notwithstanding the provisions of these Articles, an amendment to these Articles that requires a shareholder to purchase additional shares or to increase the scope of its liability will not bind any shareholder without such shareholder’s consent.

 

4.

Share Capital

 

4.1.

The registered share capital of the Company is NIS 18,000,000 (eighteen million New Israeli Shekels), divided into 180,000,000 (one hundred eighty million) ordinary shares par value NIS 0.10 each.

 

4.2.

All of the ordinary shares have equal rights between them for all intents and purposes, and each ordinary share confers upon the holder the following rights, subject to the provisions of these Articles:

 

4.2.1.

A right to be invited to and participate in the general meetings of shareholders of the Company, and the right to one vote for each ordinary share in every vote of every general meeting of the Company in which the holder participates;

 

4.2.2.

A right to receive dividends, if distributed, and a right to receive bonus shares if and when distributed – all on a pro rata basis according to the par value of the shares, and without taking into account any premium paid thereon;

 

4.2.3.

The right to participate in the distribution of surplus assets of the Company after its liquidation in accordance with its relative share of the Company’s issued share capital;

 

 

4.2.4.

The above will not derogate from the right of the Company to create shares of different classes, as set forth in these Articles below and under any applicable law.

  

5.

Change of the Registered Capital and Changes of Rights

 

5.1.

The general meeting of the shareholders of the Company may, with a Resolution with an Ordinary Majority, and subject to Section 46B of the Securities Law and any applicable law:

 

5.1.1.

Increase its registered share capital.

 

Unless determined otherwise in a resolution of the meeting of the shareholders regarding the increase of capital, all of the new share capital will be considered part of the original share capital of the Company and will be subject to the same provisions of these Articles with respect to payment of calls for payment, pledge right, transfer, ownership, forfeiture or otherwise, applicable to the original share capital;

 

5.1.2.

Consolidate its share capital, in whole or in part, and divide it to shares with par value that is higher than the current par value;

 

5.1.3.

Split its shares, in whole or in part, into shares with a par value that is less than the current par value, provided that a share that is not repaid in full will be split into shares which will have a ratio of paid to unpaid shares as the ratio that existed between the paid amount and the unpaid amount before the split;

 

5.1.4.

To change, terminate, convert, expand, add or change in another manner the rights, excess rights, advantages, limitations and provisions related or that are not related at the time to the shares of the Company;

 

5.1.5.

To cancel any registered share capital that has not yet been allocated, provided that there is no obligation of the Company, including a contingent obligation, to allocate shares from the said registered capital;

 

5.1.6.

To reduce its share capital in the same manner, under the same terms and subject to the receipt of the approvals required under the Companies Law.

 

5.2.

The rights conferred to shareholders will not be considered to have been changed by the creation or issuance of additional shares that are pari passu with them, unless stated otherwise in the terms of issuance of such new shares.

 

5.3.

A change, conversion, termination, expansion, addition or other change to rights, excess rights, advantages, limitations and provisions related only to a certain type of shares issued to shareholders of the Company are subject to the consent of the holders of a majority of the outstanding shares of such class of shares, either in writing, or by a resolution passed at a general meeting of the shareholders of such class of shares.

 

 

5.4.

The provisions of these Articles of Association regarding general meetings will apply, mutatis mutandis, to any meeting of the holders of a class of the Company’s shares.

  

5.5.

In order to perform any resolution as set forth above, the Board of Directors may settle, as it sees fit, any difficulty that may arise. Without derogating from the power of the Board of Directors as aforementioned, in the event that as a result of a consolidation of capital, fragments of shares remain for shareholders whose shares have been consolidated, the Board of Directors may:

 

5.5.1.

Sell all the fragments, and in order to do so, may appoint a trustee, in whose name share certificates in respect of the fragments will be issued, who will sell them, and the consideration received, less fees and expenses, will be distributed to the entitled persons;

 

5.5.2.

Allocate to all shareholders for which the consolidation results in fragments of shares, fully paid up shares of the applicable class of shares existing prior to the consolidation, in such a number that the consolidation thereof with the fragment will form one complete consolidated share; such allocation will be deemed effective shortly before the consolidation;

 

5.5.3.

To determine that the shareholders will not be entitled to receive a consolidated share for a fragment of a consolidated share arising from the consolidation of half or less than the number of shares the consolidation of which creates one consolidated share, and will be entitled to receive a consolidated share for a fragment of a consolidated share arising from the consolidation of more than half of the number of the shares the consolidation of which creates one consolidated share;

 

5.5.4.

In the event that an action under paragraphs 5.5.2 or 5.5.3 above requires the issuance of additional shares, payment therefor will be performed in the same manner in which payment for bonus shares is performed, provided that is permissible under applicable law. Consolidation and splitting as set forth above will not be considered a change to the rights of shares that are the subject of consolidation or splitting.

 

5.6.

In any event of consolidation of shares to shares with a large par value, the Board of Directors may determine arrangements in order to overcome any difficulty that may arise in connection with consolidation, and in particular, it may determine which shares will be consolidated to such or other share, and in the event of a consolidation of shares that are not owned by one owner, it may set forth arrangements for the sale of the consolidated share, the manner of its sale and the manner of the distribution of the consideration (net) and to appoint a person in order to perform the transfer, and any action performed by such person will be effective and no claims may be made against such actions.

 

 

5.7.

The securities of the Company will be under the supervision of the Board of Directors, which may allocate them or grant them at its discretion, subject to the provisions of any applicable law and the provisions of these Articles of Association. The Board of Directors of the Company may:

 

5.7.1.

issue shares and other securities, convertible or exercisable to shares, up to the limit of the registered share capital of the Company, and it may allocate them (or handle them in another manner) in consideration for cash or other, non-cash, consideration, with the same qualifications and terms, whether at a premium, par value or discount, on the same dates as it finds fit, and to grant to any person a right to demand the allocation of any shares during the same period and against consideration, as determined by the Board of Directors; and

 

5.7.2.

resolve to issue a series of bonds pursuant to its authority to borrow on behalf of the Company, and within the limitations of such authority.

 

5.8.

Unless resolved otherwise by the general meeting in a Resolution with a Regular Majority, in the event of any offer for sale of shares to a shareholder, there is no obligation to make a similar offer to all holders of shares of the Company. The Board of Directors may offer for sale securities of the Company to whomever it sees fit, whether the offerees or some of them are owners of securities of the Company or otherwise, all subject to the provisions of any applicable law, the provisions of the Articles of Association and the agreements applicable to the Company on the date of the allocation.

 

5.9.

Upon the allocation of shares, the Board of Directors may determine various terms for the shareholders with respect to the consideration, payment of calls for payment and/or payment dates.

 

6.

Ownership of the Shares

 

6.1.

The Company may treat the registered holders of a share as the absolute owners thereof, and accordingly, will not be required to recognize any claim in equity or otherwise regarding such a share, or regarding a benefit therein to any other person, unless directed otherwise by an order of a competent court or the Companies Law as otherwise required by applicable law. The provisions above will not apply to a nominee company, as defined under the Companies Law.

 

6.2.

In the event that the Company receives a request for registration as a shareholder in the register by a person that is registered as the owner of the same shares with a stock exchange member, and such shares are registered in the registry in the name of a nominee company, the Company will list such person in the register of shareholders if the provisions of Article 8 below are satisfied, as well as the following terms:

 

6.2.1.

The requesting party has provided the Company with an undertaking from the stock exchange member with which its shares are registered to inform the Company of the new holdings of the requesting person immediately upon the performance of an action that changes its holdings in a share.

 

 

6.2.2.

The requesting person undertook in writing vis-à-vis the Company to inform it of the performance of actions as set forth above.

 

6.3.

In the event that two or more individuals are registered as joint holders of a share, each of them may provide binding receipts for any dividend, shares, bonus shares, share certificates, bonds, options or any other funds or rights with respect to the share, irrespective of whether such dividend, share, bonus share, share certificate, bonds, options or any other funds or rights were delivered or provided to the other joint holder.

 

6.4.

The Company may pay, at any time, a fee to any person for its signature or consent to sign, whether unconditional or with conditions, on any share, bond or series of bonds of the Company or its consent to obtain a signature, whether unconditional or with conditions, on any share, bond or series of bonds of the Company, all subject to the provisions of the Companies Law.

 

6.5.

 

6.5.1.

The guardians and managers of the estate of a deceased shareholder or, where there is no estate manager or guardian, the individuals who have a right as inheritors of the deceased shareholder, will be the only individuals that the Company will recognize as holders of the right to the share that was registered in the name of the deceased shareholder, unless a court gives an order instructing otherwise.

 

6.5.2.

In the event that a share is registered in the name of two or more holders, the Company will only recognize living holder(s) as having the right to the share or benefit therein, subject to the provisions of the Articles of Association and the provisions of any applicable law.

 

6.5.3.

A partner in the ownership of a share may transfer its right to shared ownership subject to the provisions of the Articles of Association.

 

6.5.4.

The Company may recognize a receiver or liquidator of a shareholder that is a corporation undergoing winding up or liquidation, or a trustee in bankruptcy or a guardian of a legally incompetent person, as a holder of a right to shares registered in the name of such a shareholder.

 

6.6.

Any person that becomes holder of a right to a share following the death of a shareholder may, in presenting evidence of a probate order or appointment of a guardian or an inheritance order, indicating that it has the right to shares of the deceased shareholder, be registered as a shareholder for the said shares, or may, subject to the consent of the Board of Directors under these Articles of Association, transfer the same shares.

 

 

7.

Share Certificates

 

7.1.

The share certificates will be issued with the stamp of the Company and the signature of two directors or the signature of the secretary of the Company and one director or another person, as determined by the Board of Directors.

 

7.2.

Each member that is listed in the shareholders register will be entitled to receive, within six months from the date of the allocation or the registration of the transfer, one share certificate for all of the shares registered in its name and for which the consideration has been paid in full, or, if the Board of Directors so approves, a number of share certificates for the shares registered in its name.

 

7.3.

Each share certificate will list the number of shares with respect to which it was issued, and any other important detail in the opinion of the Board of Directors or that must be stated under any applicable law.

 

7.4.

A certificate in respect of shares registered in the names of two or more owners will be provided to the person whose name appears first in the register of shareholders from the names of the joint holders, and the Company will not be required to issue more than one certificate for all of the joint holders of shares. The delivery of such a certificate to one of the holders will be considered delivery to all of the holders.

 

7.5.

If a share certificate is destroyed, lost or corrupted, the Board of Directors may issue a new certificate in its place, provided that the certificate is delivered to the Board and destroyed by it or it is proven to the Board’s satisfaction that the certificate has been lost or destroyed, and the Board received guarantees to its satisfaction, for any potential damage, all for payment of consideration fee, if placed.

 

7.6.

A shareholder that duly holds a share deed may return the deed to the Company in order to annul it and register the share in such holder’s name. Upon the annulment, the name of the shareholder and number of shares held by it shall be recorded in the register of shareholders.

 

8.

Transfer of Shares and Delivery

 

8.1.

The ownership of shares of the Company will not be amended in the register of shareholders of the Company, other than upon the fulfillment of one of the alternatives in Section 299 of the Companies Law, as stated in Article 35.4.4 below.

 

8.2.

A share transfer deed in the Company will be signed by the transferor and the transferee, and the transferor will be considered to remain a shareholder as long as the name of the transferee has not yet been recorded in the register of shareholders with respect to the transferred share.

 

 

	8.3.	The share transfer deed will be in the following form or in a form as similar thereto as possible, or as approved by the Board of Directors:

 

8.4.

Together with the transfer deed, the Company must be provided with any document (including the certificate of the transferred share) that the Board of Directors requests in connection with the transfer. In the event that the transfer of the share was approved – all of the aforesaid documents will remain in the possession of the Company.

 

8.5.

Any transfer of not fully paid up shares will not have effect unless approved by the Board of Directors. The Board of Directors may, at its absolute discretion and without being required to provide reasons, refuse to register a transfer of not fully paid up shares.

 

8.6.

Any transfer deed will be provided to the Office for the purpose of registration. The transfer deeds that are recorded in the register will remain in the possession of the Company, but any transfer deeds that the Board of Directors refuses to record for reasons permitted under the Articles of Association or under the Companies Law will be returned upon demand to the party that provided them, together with the share certificate (if provided).

 

 

9.

Rights of a Shareholder

 

In addition to the rights of shareholders set forth in Article 4.2 above, every shareholder of the Company is entitled to the following rights:

 

9.1.

Each of the shareholders will have the right to review documents of the Company as set forth below:

 

9.1.1.

Minutes of general meetings;

 

9.1.2.

The register of shareholders;

 

9.1.3.

These Articles of Association and any amendments, as made from time to time;

 

9.1.4.

Any document that the Company must submit under the Companies Law and under any applicable law to the Israeli Companies Registrar or the Israel Securities Authority, and available for review by the public in the Israeli Companies Registrar or the Israel Securities Authority, as applicable;

 

9.2.

A shareholder is entitled to demand from the Company, while stating the purposes of the demand, to review any document in the possession of the Company relating to an action or transaction requiring approval of the general meeting under Section 255 and Sections 268 through 275 of the Companies Law.

 

9.3.

The Company may refuse the request of a shareholder if in the opinion of the Board of Directors, the request was submitted by a shareholder not in good faith or the documents requested contain a trade secret or patent, or the disclosure of the documents may harm the interests of the Company in a different manner.

 

10.

The Organs of the Company

 

10.1.

The organs of the Company are:

 

10.1.1.

The general meeting;

 

10.1.2.

The Board of Directors;

 

10.1.3.

The Chief Executive Officer;

 

The actions of an organ and its intentions are the actions of the Company and its intentions.

 

10.2.

The organs of the Company will have the following powers:

 

10.2.1.

The general meeting will have the powers set forth in Article 11 below.

 

10.2.2.

The Board of Directors will have the powers set forth in Article 21 below.

 

10.2.3.

The Chief Executive Officer will have the powers set forth in Article 28 below.

 

10.3.

Unless stated otherwise explicitly in these Articles, the Board of Directors of the Company may delegate any power of the Company that was not set forth in law or these Articles to a different organ of the Company.

 

10.4.

The general meeting may assume powers granted to the Board of Directors, where the Board of Directors is precluded from exercising its powers and only for so long as such preclusion is continuing, and/or any other organ of the Company for any matter essential to the proper management of the Company and/or any action that is required, in the opinion of the general meeting, for the interests of the Company and/or any other matter for a period of time that will not exceed the period of time required under the circumstances.

 

 

10.5.

The Board of Directors of the Company may assume authorities provided to the Chief Executive Officer of the Company on all matters essential to the proper management of the Company and/or any action that is required, in the opinion of the general meeting, for the interests of the Company and/or any other matter for a period of time that will not exceed the period of time required under the circumstances.

 

General Meetings

 

11.

The general meeting and its powers

 

11.1.

The resolutions of the Company regarding the following matters will be passed in a general meeting of the shareholders:

 

11.1.1.

Changes to the Articles of Association of the Company, as stated in Article 3 above;

 

11.1.2.

Use of the powers of the Board of Directors in the event that the Board of Directors of the Company is unable to fulfill its role, as set forth in Section 52(a) of the Companies Law or as set forth in Article 10.4 above;

 

11.1.3.

The appointment of the auditor of the Company, the termination of his term of appointment and determining the terms thereof, subject to the provisions of Article 31 below;

 

11.1.4.

The appointment of external directors in accordance with the provisions of Section 239 of the Companies Law and in accordance with Article 19 below;

 

11.1.5.

Approval of actions and transactions that require approval of the general meeting under the provisions of any applicable law;

 

11.1.6.

Increase and reduction of the registered share capital, as set forth in Article 5 above;

 

11.1.7.

Appointment of directors that are not external directors, as set forth in and subject to Article 19 below; and

 

11.1.8.

A merger as set forth in Section 320(a) of the Companies Law.

 

11.2.

The provisions of the Companies Law with regard to dates of convening general meetings of shareholders, the manner of convening them, the matters that will be discussed therein, the legal quorum, methods of providing notice, manner of voting, management of minutes and the like, will apply with regard to general meetings and class meetings, excluding if determined explicitly in these Articles otherwise, and subject to the provisions of any applicable law.

 

 

12.

Convening an Annual General Meeting

 

12.1.

The Company will hold an annual general meeting of its shareholders each year, no later than the end of fifteen months after the previous annual general meeting.

 

12.2.

The agenda of the annual general meeting will include the following topics:

 

12.2.1.

A discussion of the financial statements and reports of the Board of Directors;

 

12.2.2.

Appointment of directors and determining their remuneration;

 

12.2.3.

Appointment of an auditor, subject to the provisions of Article 32(b) below;

 

12.2.4.

Any matter that the Board of Directors has determined will be included in the agenda of the annual general meeting;

 

12.2.5.

Matters that are requested of the Board of Directors by one or more shareholders that hold in the aggregate at least one percent (1%) of the voting rights at the general meeting, provided that this matter is suitable to be discussed in a general meeting.

 

13.

Convening a Special General Meeting

 

13.1.

The Board of Directors of the Company may convene a special general meeting of its shareholders, by making such a decision, and at the request of any of the following:

 

13.1.1.

Two directors or a quarter of the serving directors;

 

13.1.2.

One or more shareholders that hold, in the aggregate, at least five percent (5%) of the issued and outstanding share capital and one percent (1%) of the voting rights in the Company, or one or more shareholders that hold, in the aggregate, at least five percent (5%) of the voting rights in the Company.

 

13.2.

The agenda in a special general meeting will be determined by the Board of Directors and will also include matters for which the convening of a special meeting as set forth in Article 13 above is required, as well as a matter that is requested by a shareholder as set forth in Article 12 above.

 

13.3.

If requested as set forth in Article 14 below, the Board of Directors will call the convention of a special general meeting no later than twenty one days from the date on which the request was provided thereto, as set forth below; the date on which the special general meeting will convene will be detailed in the invitation that will be provided to the shareholders under Article 14 below, provided that such date is no later than 35 days from the date on which the invitation to convene was published.

 

14.

Notices Regarding Convening General Meetings

 

14.1.

The Company may determine a record date with regard to the entitlement to receive invitations to general meetings, to participate and vote thereat, provided that the aforesaid date will not exceed 40 days and not be less than 4 days before the date determined for the convention of the general meeting.

 

  

14.2.

Subject to the provisions of Section 69 of the Companies Law, a notice of the convention of a general meeting of the shareholders will be provided to all of the shareholders entitled thereto, by the publication in two daily Hebrew newspapers published in Israel and with reasonable distribution.

 

15.

Discussions in General Meetings

 

15.1.

The general meeting may discuss any matter as set forth by the Companies Law and these Articles of Association, and any matter on the agenda, as will be set out in the notice of convening the general meeting.

 

15.2.

The legal quorum for holding a general meeting is the presence of at least one shareholder that holds at least twenty-five percent (25%) of the voting rights, within half an hour from the time determined for the commencement of the meeting.

 

15.3.

No matter should be discussed in a general meeting unless a legal quorum is present within half an hour from the time determined for the commencement of such general meeting. In the event that a legal quorum is not present at the end of half an hour from the time determined for the commencement of such general meeting, the general meeting will be adjourned by seven days, to the same day and at the time and in the same place, or another date and/or place, if so stated in the invitation to or notice of said general meeting (hereinafter: an “Adjourned Meeting”).

 

15.4.

In the event that the legal quorum set forth in Article 15.3 above is not present at the Adjourned Meeting half an hour after the scheduled time, the Adjourned Meeting will take place with any number of participants.

 

15.5.

Notwithstanding the provisions of Article 15.4 above, in the event that the general meeting was convened at the request of shareholders as stated in Article 13.1.2 above or under Section 64 of the Companies Law, the Adjourned Meeting will only take place if at least the number of shareholders required to convene a general meeting as stated in Article 13.1.2 above is present.

 

15.6.

A general meeting that has a legal quorum may decide to adjourn the meeting to a later date and place to be determined. In the Adjourned Meeting, only matters on the agenda of the original meeting and for which no resolution was passed will be discussed.

 

15.7.

In the event that a general meeting as stated in Article 15.6 above is adjourned to a date later than twenty one days, notices will be provided for the adjourned general meeting in the matter set out in Article 15 above.

 

 

16.

Chairman of the General Meeting

 

16.1.

The chairman of the Board of Directors or a person that he appoints in writing on a permanent basis or for a specific meeting will serve as chairman of the general meeting.

 

16.2.

In the event that a chairman of the Board of Directors is not appointed or is not present or has not appointed a chairman for a general meeting, the chairman of the general meeting will be a person selected by the general meeting from the members of the Board of Directors present, and if no director is present – a person selected by the general meeting from the participating shareholders.

 

17.

Vote in the General Meeting

 

17.1.

Subject to and without derogating from the rights or limitations existing at any time in connection with a special class of shares constituting part of the Company’s share capital, each member is entitled to one vote for each share granting a voting right held thereby or for which it grants power of attorney to vote. A shareholder will be entitled to participate and vote at a general meeting, whether by themselves, by proxy or by a proxy card, if it has provided to the Company confirmation of ownership as set forth in the Articles enacted in this regard, as of the effective date as determined in the notice of convening the general meeting, that is no later than 21 days and no earlier than 4 days before the date determined for such general meeting to convene.

 

17.2.

If a shareholder is a minor, bankrupt or legally incompetent, or in the event of a corporation, is undergoing receivership or liquidation, it may vote through its trustees, receivers, natural or other legal guardians, as the case may be, and such trustees, receivers, natural or other legal guardians may vote themselves or by proxy.

 

17.3.

In the event of two or more shareholders that are joint holders of a share and are present and voting – only the vote of the head of the joint owners present and voting will be taken into consideration, and the votes of the other joint owners will not. For this purpose, the head of the joint owners will be considered the person whose name is recorded first in the register of shareholders from those present and voting.

 

17.4.

A shareholder may appoint a proxy to vote in his or her place, who does not have to be a shareholder of the Company. The appointment of a representative or proxy to participate and vote at a meeting on behalf of the shareholder will be in writing, hand-signed by the shareholder or such shareholder’s proxy that is authorized in writing, or in the event that the appointing party is a corporation, the document must bear binding signatures in accordance with the articles of association of the same corporation. If the appointing party is a corporation, confirmation of an attorney will be attached to the power of attorney stating that such power of attorney was signed in accordance with the articles of association of the same corporation. Subject to the provisions of the Companies Law, a shareholder may also vote through a proxy card.

 

17.5.

A vote in accordance with the terms of a power of attorney will be legal even if prior thereto, the appointing party died or was declared bankrupt or legally incompetent or terminated the letter of appointment or transferred the share with respect to which it was given or, if it is a corporation, a liquidator or receiver was appointed, unless a written notice was received regarding the aforesaid change at the Office at least one day before the meeting, or the place at which the meeting will convene, provided such notice was delivered no later than shortly before the general meeting commences.

 

 

17.6.

A letter of appointment of proxy or a power of attorney or other certificate (if any) or a copy certified by a notary or attorney, as well as a proxy card, will be provided at such place as determined by the Board of Directors for the delivery of confirmation of ownership no later than 48 hours before the general meeting.

 

17.7.

A shareholder holding more than one share will be entitled to appoint more than one proxy subject to the provisions below:

 

17.7.1.

The letter of appointment will state the class and number of the shares with respect to which it was granted;

 

17.7.2.

In the event that the total shares of any kind set forth in the letter of appointment granted by one shareholder exceed the number of shares of the same class held thereby, all of the letters of appointment provided thereby in respect of the surplus shares will be null, without derogating from the effectiveness of the votes cast in respect of the shares held thereby;

 

17.7.3.

In the event that a proxy is appointed by shareholders and the letter of appointment does not state the number and class of shares in respect of which it was provided, the letter of appointment will be considered to have been provided in respect of all of the shares on the date on which the letter of appointment was provided to the Company or on the date on which it was provided to the chairman of the meeting, as applicable. In the event that the letter of appointment was provided in respect of a number of shares that is lower than the number of shares owned by the shareholder, the shareholder will be considered to have abstained from the casting the votes in respect of the balance of the shares owned by it, and the letter of appointment will only be effective in respect of the number of shares set forth therein.

 

18.

Passing Resolutions in the General Meeting

 

18.1.

In each general meeting, a resolution presented for a vote will be passed by the counting of votes.

 

18.2.

All resolutions in the general meeting, including resolutions regarding mergers, will be resolutions with a Regular Majority.

 

18.3.

The declaration of the chairman of the general meeting that a resolution in a general meeting has passed unanimously or with a specific majority or has not passed will be prima facie evidence thereof.

 

 

The Board of Directors

 

19.

The Directors and Manner of their Appointment

 

19.1.

The number of directors of the Company (including external directors) will not be less than five and will not exceed thirteen.

 

19.2.

Subject to the provisions of Article 19.7 below, each director of the Company will be elected with a resolution passed with a Regular Majority at an annual or special general meeting, and will serve in his or her role until the end of the subsequent annual general meeting. Provided, however, that until his or her replacement shall be dully elected or appointed, such director will continue to serve unless his or her office has been vacated pursuant to any applicable law or the Articles of Association.

 

19.3.

The Company will appoint as directors only individuals who are fit to serve as directors under any applicable law.

 

19.4.

Subject to the provisions of any applicable law, no director will be disqualified solely due to his service as a director in the Company from holding another position or role for which such director may be compensated by the Company or any other company of which the Company is a shareholder or has another interest in, or from entering into an agreement with the Company, whether as a seller or purchaser or otherwise, and no such agreement or other agreement or contract made by the Company or in its name, in which the director has any benefit, will be contested.

 

Additionally, a director will not be required to provide a report to the Company of any profit arising from the role or a profit-generating role as stated, or that comes as a result of an agreement as set out above, provided that such director has complied with the provisions of the Companies Law relating to a personal interest of a director.

 

19.5.

[Deleted]

 

19.6.

A director who vacated his office may be reappointed.

 

19.7.

The Board of Directors may, from time to time, appoint by a written resolution signed by all of the members of the Board of Directors, subject to Article 19.1 above, an additional member to the Board of Directors. By a resolution adopted with a Regular Majority of the Board of Directors, the appointment of a member of the Board of Directors who is appointed under this Article 19.7 may be terminated. The term of the appointments under this Article 19.7 will be until the end of the following annual general meeting.

 

19.8.

In the event that the office of a director is vacated for any reason, the directors serving may appoint by a unanimous resolution a director in his or her place, and such director will serve through the term his predecessor would have served had the office not been vacated. As long as the number of directors does not exceed the maximum number permitted under these Articles, the directors may appoint additional directors up to the maximum number permitted, and the appointments will be effective until the upcoming general meeting in which directors are appointed.

 

  

19.9.

The Company may approve the appointment of a director such that the date of the commencement of such director’s term is later than the date of his appointment.

 

19.10.

With regard to the appointment of external directors, the provisions of the Companies Law will apply. Without derogating from the foregoing, the Company may, by a resolution passed with a Regular Majority, approve the appointment of an external director for two additional terms of three years each.

 

19.11.

A director may appoint a substitute director, all subject to the provisions of Section 237 of the Companies Law. The substitute director will be subject to the provisions of the Companies Law and these Articles of Association applicable to a director of the Company, and his office will be vacated upon the occurrence of the events set forth by law or the Articles due to which the office of the director who appointed him is vacated.

 

19.12.

The term of a member of the Board of Directors who is not an external director will expire automatically in each of the cases set forth in Section 228(a) of the Companies Law, and upon the occurrence of any of the following events:

 

19.12.1.

Upon his death.

 

19.12.2.

If he becomes legally incompetent.

 

19.12.3.

Without derogating from the above, the general meeting may, by a resolution passed with a special majority of sixty-five percent (65%) of the votes represented in such meeting in person or by proxy and voting thereon, and without taking into account abstentions, dismiss a director, even if he was appointed in a manner other than by the general meeting, if the general meeting decides that such director acted against the interests of the Company or in breach of a fiduciary duty vis-à-vis the Company, in which case the provisions of Section 230(a) of the Companies Law will apply regarding granting the director an opportunity to present his case before the general meeting.

 

In the event that the Company will have a single controlling shareholder (a private entity or a single corporation), who holds more than fifty percent (50%) of the voting rights in the Company, then the majority for the purposes of this section will be a Regular Majority.

 

20.

Salary of Directors

 

20.1.

Directors will not receive compensation from the Company unless the Company decides otherwise. A director is entitled to be reimbursed for its reasonable travel and other expenses related to its participation in meetings of the Board of Directors and the fulfillment of his role as a member of the Board of Directors.

 

 

20.2.

A director that provides the Company with special services or makes special efforts for one of the purposes of the Company will be entitled to compensation from the Company in the amount determined by the Company, and such compensation will be in addition to, or will replace, such director's regular compensation, if any, as determined by the Company.

 

20.3.

The compensation of a director for its service or for its employment in another role requires approval by the audit committee, the Board of Directors and the general meeting, as set forth in Sections 270(3) and 273 of the Companies Law.

 

20.4.

The external directors are entitled to compensation and reimbursement of expenses as set forth by law. Without derogating from the foregoing, exemptions from liability, undertakings of indemnification and insurance pursuant to the Companies Law or Article 30 below will not be considered compensation.

 

21.

Powers of the Board of Directors

 

21.1.

All of the powers and authorities for the management of the Company, excluding the same powers and authorities granted under law to the general meeting, will be granted to the Board of Directors. Without derogating from the generality of the above and the powers of the Board of Directors that are granted thereto under these Articles of Association, the Board of Directors will outline the policy of the Company and supervise the performance of the roles of the Chief Executive Officer and its actions, including:

 

21.1.1.

It will determine the plan of action of the Company, principals for financing and priorities among them;

 

21.1.2.

It will examine the financial state of the Company and determine the credit limit that the Company may take;

 

21.1.3.

It will determine the organizational structure and the compensation policy;

 

21.1.4.

It may resolve to issue a series of bonds;

 

21.1.5.

It will be responsible to prepare and approve the financial statements;

 

21.1.6.

It will appoint and dismiss the Chief Executive Officer;

 

21.1.7.

It will make resolutions regarding actions and transactions requiring its approval under the provisions of Sections 255 and 268 through 275 of the Companies Law;

 

21.1.8.

It may allocate shares and securities convertible to shares up to the limit of the registered share capital of the Company, as set forth in Article 5.7 above;

 

21.1.9.

It may resolve to distribute dividends and to purchase shares of the Company by the Company as stated in Article 33 below;

 

 

21.1.10.

It will express its opinion regarding a special tender offer as set forth in Section 329 of the Companies Law.

 

21.2.

The authorities of the Board of Directors under Articles 21.1.1 through 21.1.10 above may not be delegated to the Chief Executive Officer.

 

21.3.

Without derogating from the powers granted to the Board of Directors under any applicable law or under the Articles of Association, the Board of Directors is granted additional powers as follows:

 

21.3.1.

To appoint, and at its discretion, to remove or suspend a Chief Executive Officer, an officer, other employee or authorized party, whether employed on a permanent or temporary basis or for special services, as the board of directors sees fit from time to time, and to define the authorities and obligations and determine their pay and compensation, and demand guarantees in the cases and amounts as the Board of Directors sees fit.

 

21.3.2.

The Board of Directors may authorize the Chief Executive Officer, temporarily or otherwise, to appoint officers and other employees, to define their authorities and obligations and to determine their pay and terms of employment.

 

21.3.3.

At any time and from time to time, to grant a power of attorney to any person to be a representative of the Company for such purposes and with such powers and authorities, and to exercise discretion (which will not exceed the Board of Directors’ discretion under these Articles of Association) for such period and subject to such terms, as the Board of Directors sees fit from time to time.

 

Each such power of attorney may be granted by the Board of Directors to any company or its members, its board of directors, authorized parties or managers of any company, or to a person determined by any company or corporation.

 

21.3.4.

The Board of Directors may appoint on behalf of the Company an attorney or attorneys in Israel or outside of Israel to represent the Company before any court, arbitration, judicial or quasi-judicial bodies, entities or government, municipal or other bodies in or outside Israel, and to grant any attorney the powers that the Board of Directors sees fit, including the power to delegate its powers, in whole or in part, to another or others.

 

The Board of Directors may delegate this power on a permanent or temporary basis to the Chief Executive Officer.

 

21.3.5.

The Board of Directors may, at its discretion, at any time, borrow or provide guarantees to any amount or amounts in such manners, at such times and on such terms as it sees fit, including by issuing bonds or a series of bonds, whether secured or unsecured, or subject to any mortgage, pledge or any other security of the factory or the property of the Company, in whole or in part, whether existing or in the future, including unpaid share capital.

 

 

22.

Chairman of the Board of Directors

 

22.1.

The Company’s Board of Directors will choose one of its members to serve as chairman of the Board of Directors.

 

22.2.

The chairman of the Board of Directors will be chosen by the members of the Board of Directors at the Board of Directors’ first meeting after the annual general meeting, or at the Board of Directors’ meeting at which he was appointed as director, and shall serve as the chairman of the Board of Directors as long as otherwise decided by the Board of Directors or until the vacation of his office as a director.

 

23.

Convening Meetings of the Board of Directors

 

23.1.

The Board of Directors will convene for meetings according to the needs of the Company, and at least once every three months.

 

23.2.

The chairman of the Board of Directors is entitled to convene the Board of Directors at any time, and to the request of any of the following:

 

23.2.1.

Two directors;

 

23.2.2.

One director – if pursuant to Section 257 of the Companies Law.

 

23.3.

Without derogating from the foregoing, the chairman of the Board of Directors shall convene the Board of Directors if actions by the Board of Directors are necessary due to a notice from or the report of the Chief Executive Officer according to Section 122(d) of the Companies Law, or the report of the auditor of the Company according to Section 169 of the Companies Law.

 

23.4.

If a meeting of the Board of Directors was not convened within 14 days from the request date, as set forth in Article 23.2 above, or from the report date of the Chief Executive Officer or the auditor according to Article 23.3 above, each of the foregoing may convene a meeting of the Board of Directors for the purpose of that matter.

 

23.5.

Notice of the Board of Directors meeting shall be provided to each member of the Board of Directors a reasonable time prior to the meeting.

 

23.6.

The notice will be sent to the address of the director or to another location as directed by the director, all as provided in advance to the Company, and therein shall be noted the date and location of the meeting, as well as a reasonable explanation of the subjects on the agenda.

 

23.7.

Notwithstanding Article 23.2 above, in urgent situations, the Board of Directors may, upon the agreement of a majority of the directors, to convene a meeting without prior notice.

 

 

24.

Board of Directors Meetings and their Management

 

24.1.

The agenda of the Board of Directors meetings will be determined by the chairman of the Board of Directors and shall include the topics determined by the chairman, the topics determined as set forth in Articles 23.2 and 23.3 above and any topic that a director or the Chief Executive Officer requests from the chairman of the Board of Directors, a reasonable time prior to the convening of the Board of Directors meeting, to be included in the agenda.

 

24.2.

The chairman of the Board of Directors will manage the Board of Directors meetings. If the chairman of the Board of Directors was absent from a meeting, the Board of Directors will choose one of its members to manage the meeting and to sign the meeting’s minutes.

 

24.3.

The Board of Directors may conduct meetings by using any means of communication, provided that all of the participating directors can hear one another at the same time.

 

24.4.

The Board of Directors may adopt resolutions even without actually convening, provided that all of the directors entitled to participate in the discussion and vote on the matter brought for discussion, have consented thereto.

 

24.5.

If resolutions were adopted as set forth in Article 24.4 above, the chairman of the Board of Directors will record the resolutions in the minutes book and will affix thereto his signature or the signatures of the directors.

 

24.6.

A legal quorum for the commencement of a Board of Directors meeting shall be either of the following: half of the members of the Board of Directors, or three members of the Board of Directors among which one or more external directors.

 

24.7.

At each meeting of the Board of Directors where a legal quorum was present, the Board of Directors shall be authorized to exercise all of the authorities, powers of attorney and discretion granted at such time to the Board of Directors or generally exercised thereby.

 

25.

Voting at the Meetings of the Board of Directors

 

25.1.

Each director at a meeting of the Board of Directors shall have one vote.

 

25.2.

The resolutions of the Board of Directors shall be passed with a Regular Majority; the chairman of the Board of Directors shall not have an additional vote.

 

25.3.

A director in such capacity shall not enter into voting agreements and such agreements shall be deemed as a breach of the fiduciary duty of the director.

 

25.4.

The minutes approved and signed by the chairman of the meeting or by the chairman of the Board of Directors shall serve as prima facie evidence to the contents thereof.

 

 

26.

Committees of the Board of Directors

 

26.1.

The Company’s Board of Directors may establish committees of the Board of Directors, generally or for a specific matter, and to appoint members thereof from the members of the Board of Directors, and may from time to time terminate the granting of this authority (hereinafter: the “Board of Directors Committee”).

 

26.2.

A decision made or an action performed at the Board of Directors Committee, shall be considered as a decision made or action performed by the Board of Directors, unless the Board of Directors instructs otherwise.

 

26.3.

The Board of Directors Committee shall report to the Board of Directors on an ongoing basis regarding its decisions and recommendations. The decisions or recommendations of the Board of Directors Committee requiring the approval of the Board of Directors will be brought to the attention of the Board of Directors a reasonable time before the discussion by the Board of Directors.

 

26.4.

Articles 24 to 26 shall also apply, mutatis mutandis, to the convening of meetings of the committees and their management.

 

26.5.

The Company’s Board of Directors may not delegate its authorities to the Board of Directors Committee with regard to the following matters, except for the purpose of recommendation only:

 

26.5.1.

Determining the general policy of the Company;

 

26.5.2.

Distribution, as defined in Section 1 of the Companies Law, unless referring to the purchase of the Company’s shares in accordance with the instructions outlined in advance by the Board of Directors;

 

26.5.3.

Determining the position of the Board of Directors in matters that require the approval of the general meeting, or providing an opinion according to Section 329 of the Companies Law;

 

26.5.4.

The allocation of shares or of securities convertible to shares or exercisable to shares, or a series of bonds, excluding the allocation of shares due to the exercise or conversion of the securities of the Company;

 

26.5.5.

The approval of financial statements;

 

26.5.6.

The approval of the transactions and actions requiring the approval of the Board of Directors according to the provisions of Sections 255 and 268 to 275 of the Companies Law.

 

26.6.

The Board of Directors may dissolve Board of Directors Committees appointed thereby, however the dissolution shall not derogate from the validity of decisions of such Board of Directors Committee according to which the Company acted vis-à-vis another person who was not aware of its dissolution.

 

 

27.

Audit Committee

 

27.1.

The Board of Directors of the Company shall appoint an audit committee from among its members and the provisions of Article 26 above shall apply thereto, mutatis mutandis.

 

27.2.

The number of members of the audit committee shall not be less than three and its members will be appointed according to Section 115 of the Companies Law.

 

27.3.

The internal auditor of the Company shall receive notices of the convention of meetings of the audit committee and shall be entitled to participate in them. The internal auditor shall be entitled to request from the chairman of the audit committee to convene the committee for a discussion in a topic that will be detailed in his request, and the chairman of the audit committee will convene it within a reasonable time from the date of the request, if he sees a reason to do so.

 

27.4.

Notice regarding the convention of an audit committee meeting at which a matter relating to the audit of the financial statements will be discussed, shall be provided to the auditor of the Company, who may participate therein.

 

27.5.

The audit committee shall point out the deficiencies in the Company’s business management, inter alia, by consulting with the internal auditor and/or the auditors of the Company and shall propose ways to correct them to the Board of Directors. The audit committee shall decide whether to approve the actions and transactions requiring the approval of the audit committee according to Sections 255 and 268 to 275 of the Companies Law. Additionally, the audit committee shall have the authorities and roles as detailed in Section 117 of the Companies Law.

 

28.

Chief Executive Officer

 

28.1.

The Board of Directors may, from time to time, appoint one or more persons, whether directors or not, as the Chief Executive Officer or Chief Executive Officers of the Company, either for a determined date or an unlimited amount of time, and may, from time to time, in considering the terms of the entire contract between it or them and between the Company, release him, her or them from their office and appoint another or others in his, her or their place.

 

28.2.

The Chief Executive Officer is responsible for the ongoing management of the Company’s matters within the policy determined by the Board of Directors and pursuant thereto, and shall be under the supervision of the Board of Directors. The Chief Executive Officer shall have all of the management and executive authorities granted thereto by Law or these Articles of Association, any management and executive authorities not granted by Law or these Articles of Association to another organ of the Company as well as any authority granted thereto by the Board of Directors.

 

28.3.

The Chief Executive Officer may appoint a person, people or a corporation for the purpose of receiving and holding in trust for the benefit of the Company of any property belonging to the Company or which the Company has an interest in, or for any other purpose, and to perform and execute all of the actions and things required in connection with any such trust, as well as to pay the salaries of the trustee or these trustees;

 

 

28.4.

The Chief Executive Officer may develop, manage, defend, settle, or abandon any legal proceedings on behalf of the Company or against it or against its officers or relating in another manner to its matters as well as to settle or extend the repayment time or to remove any debt or actions or requirements of the Company or against it;

 

28.5.

The Chief Executive Officer may take any action or demand of the Company or against it to arbitration;

 

28.6.

The Chief Executive Officer shall submit to the Board of Directors a report of the ongoing operations of the Company on the dates and in the scope as shall be determined by the Board of Directors. The chairman of the Board of Directors may, at his initiative or according to the decision of the Board of Directors, request from the Chief Executive Officer a report regarding the Company’s business.

 

28.7.

The compensation of the Chief Executive Officer and the terms of his employment shall be as determined from time to time, taking into consideration the terms of any contract between him and the Company and pursuant to the provisions of the Companies Law, by the Board of Directors, and may be by way of a salary or commission in a certain percentage of a dividend, profits or revenues of the Company, or by participation in these profits, or in one or more of these manners. Where the Companies Law requires the approval of the general meeting regarding the contract with an officer, any such contract shall be subject to such approval.

 

28.8.

Subject to the provisions of any applicable law, including Section 92 of the Companies Law, the Board of Directors may, from time to time, delegate to the Chief Executive Officer the authorities granted to the Board of directors by these Articles of Association, as it shall see fit, and may grant authorities which will be exercised for such purposes and needs and at such times and subject to the conditions and limitations, as the Board of Directors sees fit. The Board of Directors may delegate such authorities and continue to hold them in parallel, or delegate them in place of the Board of Directors’ authority, in whole or in part, and may from time to time cancel, change and replace any such authority or all of them entirely.

 

28.9.

The Chief Executive Officer may, with the approval of the Board of Directors, delegate to another, subordinated thereto, from its authorities.

 

29.

Officers in the Company

 

The Board of Directors may from time to time appoint and terminate, and, pursuant to the provisions of any applicable law and as set forth in Article 21.3.5 above, authorize the Chief Executive Officer, regularly or on a one-time basis, to appoint other officers and employees, define their authorities and obligations and determine their compensation and the terms of their employment. The authority of the Board of Directors according to this Article shall not derogate from the authority of the Chief Executive Officer to appoint officers in accordance with the Companies Law. However, an officer terminated by the Board of Directors shall not be reappointed, except by the Board of Directors.

 

 

30.

Liability Insurance, Indemnification and Exemption

 

30.1.

Pursuant to the provisions of the Companies Law, the Company may enter into an officers liability insurance agreement, for liability imposed thereon due to an action performed as an officer of the Company, in respect of each of the following:

 

30.1.1.

The breach of the duty of care towards the Company or towards another person;

 

30.1.2.

The breach of the fiduciary duty towards it, and provided that the officer acted with good faith and had reasonable grounds to assume that the action would not harm the Company’s best interest;

 

30.1.3.

A financial liability imposed thereon for the benefit of another person;

 

30.1.4.

Payments to the injured party from the violation as set forth in Section 52BBB(a)(1)(a) of the Securities Law;

 

30.1.5.

Expenses in connection with an Administrative Proceeding conducted in such officer’s matter, including reasonable litigation expenses and including attorneys’ fees.

 

30.2.

Pursuant to the provisions of the Companies Law, the Company may indemnify an officer thereof in respect of a liability or expense, as detailed below, imposed thereon due to an action performed thereby in his capacity as an officer of the Company:

 

30.2.1.

A financial liability imposed thereon for the benefit of another person according to a judgment, including a judgment granted in a settlement or an arbitration ruling approved by a court;

 

30.2.2.

Reasonable litigation expenses, including attorneys’ fees, which the officer expended due to an investigation or proceeding conducted against him by an authorized authority to conduct an investigation or proceeding, and which ended without the submission of an indictment against him and without any financial liability being imposed on him as an alternative to a criminal proceeding, or which ended without the submission of an indictment against him but with the placement of a financial liability as an alternative to a criminal proceeding for a crime which does not require proving mens rea, or in connection with a financial sanction.

 

30.2.3.

Reasonable litigation expenses, including attorneys’ fees, which the officer expended or were imposed thereon by a court, in a proceeding instituted against him by the Company or on its behalf or by another person, or a criminal indictment from which he was acquitted, or a criminal indictment in which he was charged for a crime which does not require proving mens rea.

 

 

30.2.4.

Payments to the injured party of a violation, as set forth in Section 52BBB(a)(1)(a) of the Securities Law.

 

30.2.5.

Expenses paid in connection with an Administrative Proceeding conducted in his matter, including reasonable litigation expenses, and including attorneys’ fees.

 

30.2.6.

A liability or other expenses in respect of which the Company may indemnify pursuant to the Companies Law.

 

30.3.

The Company may indemnify an officer as set forth above after the occurrence of the indemnifiable event, and may also undertake in advance to indemnify an officer, provided that such undertaking is limited to the types of events that according to the Board of Directors may be indemnified, at the time of providing said undertaking, and in an amount that the Board of Directors determined is reasonable under the circumstances of the matter, for the liability imposed on such officer or an expense paid thereby or that will be imposed thereon, as set forth in Article 30.2 above, due to an action or inaction in his capacity as a director or officer of the Company. The undertaking for indemnification shall set forth the events which are, in the Board of Directors’ opinion, expected in light of the Company’s actual operations and the time of providing the undertaking as well as the amount or criterion which the Board of Directors determined are reasonable under the circumstances.

 

30.4.

Pursuant to the provisions of the Companies Law, the Company is entitled to undertake to indemnify, in advance, any person, including an officer serving on behalf of the Company or at its request as a director or officer of another company (including a foreign company) in which the Company holds shares, directly or indirectly, or that the Company has any interest therein (hereinafter: an “Officer Serving in Another Company”), due to a liability imposed thereon or an expense paid by him or imposed thereon, as set forth above, due to an action or inaction in his capacity as a director or Officer in Another Company.

 

30.5.

A decision regarding indemnifying and/or exempting from liability an officer and regarding the scope of indemnification shall be made by the Board of Directors as well as by any other entity in the Company whose approval is required by any applicable law at the time of such approval.

 

 

30.6.

The above provisions do not and shall not limit the Company in any manner in its engagement in insurance agreements and/or regarding indemnification:

 

30.6.1.

In connection with anyone who is not an officer in the Company, including employees, contractors or consultants of the Company who are not officers;

 

30.6.2.

In connection with the officers in the Company – if the insurance and/or indemnification are not prohibited explicitly according to any applicable law.

 

30.7.

Pursuant to the provisions of any applicable law, the Company may exempt in advance, an officer from his liability, in whole or in part, due to an injury caused to it due to a breach of the fiduciary duty towards it, with the exception of an exemption in advance of a director from his liability towards it due to a breach of the fiduciary duty in distributions.

 

30.8.

“Officer” in this Article 30 means, anyone who served from time to time in the Company as an officer, as this term is defined in Section 1 of the Companies Law, including an officer of the Company, serving on behalf of the Company in another company, including a subsidiary of the Company, and including a private company under the control of any of the abovementioned officers, through which he served as an officer of the Company and/or as an Officer in Another Company.

 

31.

Internal Auditor and Auditor

 

31.1.

Internal auditor:

 

31.1.1.

The Company’s Board of Directors shall appoint an internal auditor in accordance with the proposal of the audit committee.

 

31.1.2.

The chairman of the audit committee shall be the organizational superior of the internal auditor, unless otherwise determined by the Board of Directors and/or the audit committee.

 

31.1.3.

The internal auditor will submit his proposal for an annual or periodic work plan for the approval of the audit committee, and the audit committee will approve it with the changes as it sees fit.

 

31.1.4.

The internal auditor will submit a report of his findings to the chairman of the Board of Directors, the Chief Executive Officer and the chairman of the audit committee; the chairman of the Board of Directors or the chairman of the audit committee may instruct the internal auditor to conduct an internal audit, in addition to the work plan, where an urgent need therefor arises.

 

31.2.

Auditor:

 

31.2.1.

The general meeting will appoint an external auditor for the Company. Such auditor will serve in his position through one year from the general meeting at which he was appointed. The general meeting may in its decision to appoint the auditor to determine that the term of his appointment shall be longer than one year, but in event will the term exceed the third annual general meeting after the annual general meeting in which he was appointed.

 

 

31.2.2.

The Company may appoint several external auditors to jointly perform the audit.

 

31.2.3.

The compensation of the external auditor for the audit work shall be determined by the general meeting that appointed him, or by the Board of Directors if the general meeting did not or if the general meeting authorized the Board of Directors to determine the compensation. The Company’s Board of Directors shall determine the external auditor’s compensation for additional services provided to the Company, which are not audit services. The Board of Directors shall report to the annual general meeting regarding the external auditor’s salary for such additional services.

 

32.

Distributions, Dividends and Bonus Shares

 

32.1.

Distributions, dividends and the allocation of bonus shares shall be, subject to the Companies Law and these Articles of Association, as follows:

 

32.1.1.

The decision regarding a distribution, dividend and allocation of bonus shares will be made by the Company’s Board of Directors;

 

32.1.2.

The distribution of the dividend to the shareholders in the Company shall be performed to each shareholder in the Company in a manner relative to the par value of each share, unless determined otherwise in these Articles of Association, as amended, explicit rules regarding ranking appertaining to dividends with regard to one class of share or another;

 

32.1.3.

The Board of Directors is entitled to deduct from any dividend or other benefits, the sums that a shareholder owes to the Company in respect of the shares in respect of which the dividend or other benefit will be paid or granted, whether such sums are due or not.

 

32.2.

The Company may issue redeemable securities, all subject to Section 312 of the Companies Law and pursuant to the terms of such redeemable securities as will be determined in the issuance. The authority to issue redeemable securities is granted to the Company’s Board of Directors.

 

32.3.

The Board of Directors may, as it shall see fit and beneficial, appoint trustees or representatives for the holders of bearer share certificates who/which for a period of time, as determined by the Board of Directors, did not contact the Company to receive dividends, shares or other benefits of any kind or type, and for those shareholders registered by name that did not notify the Company of a change to their address and did not contact the Company to receive dividends, shares or other benefits throughout the term as stated above. These representatives or trustees will be appointed for realizing, collecting or receiving the dividends, shares and rights as stated, to sign the shares which have yet to be issued that are offered to the shareholders, but they will not be entitled to transfer or assign the shares for which they were appointed or to vote on their behalf or to transfer or assign rights which they are holding, as stated. In the terms of each trust or appointment of a representative, it will be stipulated by the Company that upon the first request by the holder of a share in respect of which the trustees or representatives were appointed, the trustees or representatives will be obligated to return to that holder of a share or to anyone that the Company will instruct for the share in question and all of the rights held thereby for them, all as applicable. Any action or arrangement performed by these representatives or trustees and any agreement between the Board of Directors and these representatives or trustees shall be valid and shall obligate anyone related to the matter.

 

 

32.4.

The Board of Directors may determine from time to time the manner of payment of the dividends or the distribution of bonus shares and any other rights and the arrangements in connection therewith, both to the shareholders registered by name and to the holders of bearer share certificates. Without derogating from the generality of the foregoing, the Board of Directors may pay all of the dividends or funds in respect of the shares by mailing checks to the addresses of the shareholders as registered in the Company’s register of shareholders.

 

33.

Calls for Payment

 

33.1.

The Board of Directors may at times, at its discretion or subject to the terms pursuant to which the shares were allocated, if such terms were determined, submit to the shareholders a call for payment with respect to the portion of the shares that has not been fully paid up by the shareholders, as the Board of Directors shall see fit, and provided that prior notice of at least fourteen days was provided regarding the call for payment, and each shareholder shall be obligated to pay the sum requested therefrom as stated on the dates and at the locations as determined by the Board of Directors.

 

33.2.

Joint holders of a share shall be obligated, jointly and severally to pay the amounts requested by the call for payment and the rates in connection with these calls.

 

33.3.

If the call for payment or the rate arising in respect of the share was not paid, the shareholder or the person to which it was allocated will be obligated to pay the linkage differentials and interest on the sum of the call for payment or the rate as determined by the Board of Directors commencing on the date designated for the repayment and concluding on the payment date. The Board of Directors may however waive the linkage differentials or the interest or a portion thereof.

 

33.4.

Any sum which must be, pursuant to the terms of allocation of the concerned shares, repaid at the time of the allocation or on a predetermined date, whether in respect of the par value of the share or whether a premium thereon, shall be considered under these Articles of Association as sums that have been validly called for payment and the due date is the date of allocation or the predetermined date, as applicable , and in the event of non-payment, all of the Articles hereof regarding the payment of linkage differentials and interest and expenses, forfeiture and the like and all other Articles pertaining thereto shall apply, as though such sum was validly called for payment.

 

 

33.5.

The Board of Directors, if it shall see fit, may accept from a shareholder payment in respect of all or any portion of the amounts unpaid in respect of such shareholder’s shares, in addition to the sums called for payment, and the Board of Directors may also pay to such shareholder interest and linkage differentials on the sums paid in advance or on that part of them exceeding the sum which at the time under discussion was called for payment in respect of the shares in relation to which the payment was performed initially, at a rate that the Board of Directors and the shareholder shall agree on, in addition to dividends which will be paid, if applicable, in respect of that part paid on the share in relation to which the payment was performed initially.

 

34.

Forfeiture of shares

 

34.1.

If a shareholder (hereinafter in this Article: the “Obligated Party”) did not fulfill the call for payment according to Article 33 above, the Board of Directors may, at any time thereafter, forfeit all of the shares in relation to which the Obligated Party was given notice regarding the call for payment.

 

34.2.

Subject to the provisions of any applicable law, the forfeiture of any share will be followed, at the time of the forfeiture, by a termination of any right in the Company and any claim or demand towards it in relation to the share.

 

34.3.

The forfeiture of a share in the Company shall include all of the dividends in respect of that share which were not paid before the forfeiture, even if declared.

 

34.4.

The Board of Directors may sell, reallocate or transfer in another manner any share that was forfeited in the manner that it shall decide, with or without any sum repaid for the share or considered repaid therefor. The shares which were forfeited and not yet sold shall be dormant shares, as defined in Section 308 of the Companies Law.

 

34.5.

If the consideration received for the sale of the shares forfeited exceeds the consideration for which the Obligated Party was obligated, the Obligated Party shall be entitled to the portion which was paid by the Obligated Party in respect of the shares, if any such amounts were paid, provided that the consideration remaining with the Company shall not be less than the consideration to which it was entitled from the Obligated Party with the addition of the expenses ancillary to the sale.

 

34.6.

The Board of Directors may at any time collect the forfeited funds or any part of them, as it shall see fit, but there shall not be any obligation thereon to do so.

 

 

35.

Register of Shareholders

 

35.1.

The Company shall keep a register of shareholders which shall include the following details:

 

35.1.1.

Name, ID no. and address of each shareholder, all as provided to the Company;

 

35.1.2.

The amount of shares and class of shares in the possession of each shareholder, noting their par value and the unpaid portion thereon, if the shares are not fully paid up;

 

35.1.3.

The allocation date of the shares or the date of their transfer to the shareholders, as applicable;

 

35.1.4.

If the shares are marked with serial numbers, the Company shall note, next to the name of the shareholder, the number of shares registered in the shareholder’s name.

 

35.2.

If there were dormant shares, as set forth in Section 308 of the Companies Law, in the Company, the number of such shares shall be recorded in the register and the date on which they became dormant.

 

35.3.

If the Company is keeping an additional register of shareholders, as set forth in Article 37 below, the amount of shares registered in the additional register of shareholders shall be noted as well as their serial numbers, if the shares are marked by serial numbers.

 

35.4.

The Company shall change the registration of ownership in the shares in the register of shareholders, as set forth in Article 36.1, in each of the events listed below:

 

35.4.1.

If the Company received a court order to amend the register;

 

35.4.2.

If it was proven to the Company that conditions by law for assigning the right have been fulfilled;

 

35.4.3.

If another condition was fulfilled, which pursuant to the Articles of Association was sufficient to cause a change in the register of shareholders.

 

35.5.

The Company shall be entitled to close the register of shareholders for a reasonable amount of time as determined by the Board of Directors and provided that it shall not exceed 30 days each year. Regarding the closing of the register of shareholders, the Company shall publish a notice, at least 7 days prior thereto.

 

36.

Register of material shareholders and an additional register of shareholders outside of Israel

 

36.1.

The register of material shareholders shall contain the reports received by the Company pursuant to the Securities Law regarding the holdings of material shareholders of shares in the Company.

 

36.2.

The Company may keep an additional register of shareholders outside of Israel and in this regard all of the provisions of Section 138 of the Companies Law shall apply.

 

 

37.

The Signatory, Stamp and Authority of to Sign

 

37.1.

The Company may determine a rubber stamp or stamps to embed on the documents, and the Board of Directors shall ensure that each such stamp shall be kept in a secure place;

 

37.2.

The Board of Directors may authorize any person to act or sign on behalf of the Company, and their actions or signature shall obligate the Company, provided that such person acted or signed within his/her authority;

 

37.3.

The Board of Directors is authorized to use and hold a stamp outside of Israel, and to instruct the use thereof.

 

38.

Accounting

 

The Board of Directors is responsible for keeping the accounts and the publication of financial statements as determined in Sections 171 to 175 of the Companies Law and any other law applying on the Company.

 

39.

Donations

 

The Company may donate a reasonable sum to a proper cause, even if the donation is not within the Company’s business considerations. The Chief Executive Officer shall be authorized to implement this Article, provided that annual cumulative donations exceeding the higher of USD 15,000 shall be brought for the approval of the Board of Directors.

 

40.

Keeping of Minutes

 

The Company shall conduct minutes of the proceedings in the general meetings, class meetings, Board of Directors meetings and meetings of the committees of the Board of Directors, and shall maintain them in its registered offices for a term of 7 years from the meeting date.

 

41.

Notices

 

Notices and other documents which must be transferred to the shareholders or any of them may be transferred by the Company to all of the shareholders personally or via registered mail in a duly stamped letter, to the location as registered by that shareholder in the register of shareholders or by providing notice to the shareholders or holders of any other kinds of rights by publishing in two daily Hebrew newspapers appearing in Israel in Hebrew and with a reasonable distribution, and such publication shall replace the provision of notices in person or by mail.

 

42.

Forum for Adjudication of Disputes

 

42.1.

Unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America, shall be the exclusive forum for the resolution of any complaint asserting a cause or causes of action arising under the U.S. Securities Act of 1933, as amended, including all causes of action asserted against any defendant to such complaint. For the avoidance of doubt, this provision is intended to benefit and may be enforced by the Company, its officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional or entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering. The foregoing provisions of this Article ‎42 shall not apply to causes of action arising under the U.S. Securities Exchange Act of 1934, as amended.

 

 

42.2.

Unless the Company consents in writing to the selection of an alternative forum, the competent courts in Tel Aviv, Israel shall be the exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s shareholders, or (iii) any action asserting a claim arising pursuant to any provision of the Companies Law or the Securities Law.

 

42.3.

Any person or entity purchasing or otherwise acquiring or holding any interest in shares of the Company shall be deemed to have notice of and consented to the provisions of this Article ‎42.

 

 

 

 

Exhibit 10.1

 

Enlight Renewable Energy Ltd.

 

To:

 

                          

 

Letter of Indemnity

 

1.

General

 

1.1.

In this Letter of Indemnity:

 

“Administrative Proceeding” - a proceeding pursuant to Chapters H3 (Financial Sanction by the Securities Authority), H4 (Administrative Enforcement Measures by the Administrative Enforcement Committee) or I1 (Arrangement for the Avoidance of Initiating Proceedings or for the Termination of Proceedings that are Conditional) of the Securities Law;

 

The “Securities Law” - the Securities Law, 5728-1968;

 

“Officers/Directors of the Company” - including officers and/or directors who serve and/or shall serve in the future in the Company and/or the Company’s subsidiaries and/or affiliated companies.

 

1.2.

(Wherever this was not stated explicitly, in this Letter of Indemnity, the term “officer” - shall include directors). The Company shall provide the Officers and Directors of the Company with an undertaking to indemnify them for any liability or expense imposed upon them due to an action that they performed and/or shall perform in their capacity as officers and/or directors thereof, as detailed in this Letter of Indemnity.

 

1.3.

Terms in this Letter of Indemnity that were not defined herein shall have the meaning ascribed thereto in the Companies Law, 5759-1999 (hereinafter: the “Law”), unless the context requires otherwise.

 

2.

Indemnity Undertaking

 

The Company hereby undertakes to indemnify you for any liability or expense, as detailed below, imposed upon and/or incurred by you due to any action that you performed and/or shall perform in your capacity as an Officer of the Company, subject to the provisions and limitations detailed in this Letter of Indemnity.

 

 

3.

Liabilities and Expenses Subject to the Indemnity

 

The indemnity shall apply for the following liabilities and expenses:

 

3.1.

A financial liability imposed upon you to the benefit of another person by a judgment, including a judgment issued in a settlement and/or an arbitrator’s award approved by a court, provided the maximum indemnity amount does not exceed the amount determined by the board of directors to be reasonable under the circumstances, which is detailed in section 5 below, and provided such financial liability relates to one or more of the events which in the opinion of the board of directors are foreseeable in light of the Company’s activities in practice at the time of giving this undertaking, or any part thereof or anything relating thereto, which are detailed in section 6 below.

 

3.2.

Reasonable litigation expenditures, including attorney fees, which you shall incur due to an investigation or a proceeding conducted against you by an authority authorized to conduct an investigation or proceeding, and which shall end without an indictment being filed against you and without you being imposed with financial liability as an alternative to criminal proceedings, or which shall end without an indictment being filed against you but with you being imposed with financial liability as an alternative to criminal proceedings in an offense that does not require proof of mens rea, or in connection with a financial sanction.

 

In this paragraph - “termination of a proceeding without an indictment being filed on a matter on which a criminal investigation was initiated” and “financial liability as an alternative to criminal proceedings” - as these terms are defined in section 260 of the Companies Law, as amended from time to time.

 

3.3.

Reasonable litigation expenditures, including attorney fees, incurred by you or charged by the court, in proceedings filed against you by the Company or on its behalf or by another person, or in criminal charges from which you were acquitted, or in criminal charges where you were convicted of an offense that does not require proof of mens rea, or other expenses as prescribed by law.

 

In this section: “another person” - including in case of a claim filed against the officer by way of derivative action.

 

3.4.

Expenses that you shall expend in connection with an administrative proceeding conducted on your matter, including reasonable litigation expenditures, which includes attorney fees.

 

 

3.5.

Payment to a party injured by a violation in an administrative proceeding, as provided in section 52BBB(a)1(a) of the Securities Law.

 

3.6.

Indemnity as foregoing in section 3.1 shall not apply to any act that constitutes:

 

3.6.1.

Breach of fiduciary duty towards the Company or its subsidiary or associated company or other entity, unless you acted in good faith and had reasonable grounds to believe that such act would not harm the Company or its subsidiary or associated company or other entity;

 

3.6.2.

Intentional or reckless breach of duty of care, except if negligent only;

 

3.6.3.

Any action by you made with the intention to illegally derive personal profit;

 

3.6.4.

Fine, civil fine, financial sanction or forfeit imposed upon you.

 

3.7.

For the avoidance of doubt, it is clarified that the Company shall not be required to pay, pursuant to this Letter of Indemnity, amounts for any event and/or liability and/or expense, insofar as such amounts were paid in practice to you and/or on your behalf and/or in your place on such matter, in any way, by the Company’s insurer in the framework of a directors and officers liability insurance policy and/or by virtue of any obligation and/or any other indemnification agreement and/or by any person other than the Company.

 

3.8.

Upon the occurrence of an event for which you may be entitled to indemnity pursuant to the provisions of this Letter of Indemnity, the Company shall provide you, from time to time, as an advance payment on account of expenses due to you pursuant to this Letter of Indemnity, amounts that it shall assess, on dates that it shall set, to cover various other expenses and payments entailing management of a legal proceeding and/or administrative proceeding against you, relating to such event, and in addition the Company shall provide you with security interests and/or guarantees that you shall have to provide in the framework of the investigation and/or legal proceeding and/or pursuant to interim decisions, including in arbitration, including for the purpose of replacing foreclosures to be imposed on your assets, in such a way that you shall not be required to pay or finance them yourself, as long as the total of all such amounts, security interests and guarantees shall not exceed the maximum indemnity amount, as defined below, subject to the conditions and provisions set forth in this Letter of Indemnity.

 

In the event the Company provides you and/or in your place any amounts and/or pays you and/or any third party towards whom you were charged an amount in the framework of this Letter of Indemnity, in connection with any proceeding as foregoing, and it later transpires that you are not entitled to indemnification from the Company for such amounts, then such amounts shall be deemed a loan extended to you by the Company, which shall be linked to the consumer price index plus the interest set forth in the Income Tax Regulations (Determining Interest Rate), 5745-1985, as it may be from time to time, and you shall have to return such amounts to the Company within 6 months of the date on which it transpires that you are not entitled to indemnification as foregoing, in order for it not to constitute, in the hands of the loan recipient, a taxable benefit, and pursuant to a payment arrangement to be determined by the Company or, according to the Company’s decision, assign to the Company, within 6 months of the date such charge was cancelled, your full rights to the restitution of the amount from the plaintiff in the proceeding, and perform everything necessary in order for such assignment to be effective and for the Company to be able to exercise it.

 

In the event the Company provides to you and/or in your place any security interests and/or guarantees as foregoing, and it transpires that you are not entitled to indemnification for the action for which the security interests and/or guarantees were given, then the Company shall cause their cancellation, and you shall assist their cancellation inasmuch as you are required to do so by the Company, and if these or part thereof are exercised, then the amount exercised shall be deemed a loan provided to you by the Company, which shall be linked to the consumer price index plus the interest set forth in the Income Tax (Determining Interest Rate) Regulations, 5745-1985, as these may be from time to time, and you shall have to return such amount to the Company within 6 months of the date when it transpired that you are not entitled to such indemnification, in order for it not to constitute in the hands of the loan recipient a taxable benefit, and pursuant to a payment arrangement to be determined by the Company.

 

 

4.

Maximum Indemnity Amount

 

4.1.

The overall and cumulative maximum indemnity amount due from the Company to all Officers of the Company pursuant to all letters of indemnity issued to them by the Company from time to time (hereinafter: the “Letters of Indemnity”) is limited to an amount equal to 25% (twenty-five percent) of the Company’s equity (neutralizing minority interest), according to the Company’s latest audited or reviewed financial statements as known on the date of payment of indemnity in practice (hereinafter: the “Maximum Indemnity Amount”). The indemnity shall be given in the amount of the difference between the amount of the financial liability under the Letter of Indemnity, and the amount received by virtue of the Company’s directors and officers liability insurance policy, as it shall be from to time.

 

4.2.

Should the total of all indemnity amounts that the Company is required to pay on any date, together with the total of all indemnity amounts that the Company has paid up to such date pursuant to the Letters of Indemnity, exceeds the Maximum Indemnity Amount, then the Maximum Indemnity Amount or its balance, as applicable, shall be distributed among the Officers of the Company to be entitled to such indemnity amounts for call for payment that they have submitted to the Company pursuant and according to the terms of the Letters of Indemnity, which were not paid to them before such date (hereinafter: the “Call Amount”), in such a way, that the indemnity amount received in practice by each of the officers as foregoing shall be calculated according to the ratio between the Call Amount of each of the foregoing officers and the Call Amounts of each of the foregoing officers cumulatively, on such date, multiplied by the Maximum Indemnity Amount, or its balance, as applicable.

 

5.

The Events Subject of the Indemnity

 

The indemnity undertaking shall be limited to the following events:

 

5.1.

Any claim and/or demand in connection with an action relating to the Company’s commercial relationships and/or its contractual engagements and/or those of an affiliated company and/or subsidiary of the Company with other parties and/or among themselves, including negotiations and contractual engagements in agreements of any type or kind, including their execution and/or termination, among themselves and/or with external contractors, customers, suppliers, concessionaires, distributors, service providers, manpower contractors or any third party that conducts business of any type with the Company or its subsidiaries or affiliated companies (hereinafter in section 6, jointly and/or severally: the “Company”).

 

 

5.2.

Any claim and/or demand in connection with the issue of the Company’s securities in and/or outside Israel, including, but without derogating from the generality of the foregoing, a public offering of securities pursuant to a prospectus, private placement, issue of bonus shares or a public offering.

 

5.3.

Any claim and/or demand in connection with any decision and/or action relating to the administration of the Company’s businesses, including, but without derogating from the generality of the foregoing, any decision and/or action in connection with a transaction or negotiations for a contractual engagement in a transaction (including an extraordinary transaction), as this term is defined in section 1 of the Companies Law, whether in the ordinary course of business or not in the ordinary course of business of the Company, and any decision and/or action in connection with tender offers and/or with the execution of any investment in the Company and/or purchase or sale of assets, including purchase and/or sale of companies and/or businesses and/or investments in the capital market and/or other investments.

 

5.4.

Any claim and/or demand in connection with any transaction and/or arrangement, including transfer, sale or purchase or lease of assets or liabilities, including, but without derogating from the generality of the foregoing, goods, land, chattels, securities or rights, or the provision or receipt of any right in any of the foregoing, as well as the receipt and/or provision of any option for the sale, lease, transfer or purchase of such assets or liabilities.

 

5.5.

Any claim and/or demand filed by a lender or creditor, including, but without derogating from the generality of the foregoing, any claim and/or demand regarding monies that they borrowed and/or the Company’s debts to them.

 

5.6.

Any claim and/or demand for defects and/or delays in the delivery and/or supply of the Company’s products and services and any claim and/or demand in connection with the use or consumption of the Company’s products or services.

 

5.7.

Any claim and/or demand in connection with the extension or receipt of credit, pledge of assets and liabilities or the provision or receipt of security interests, including contractual engagements in financing agreements with banks and/or other financial entities for the purpose of financing transactions or contractual engagements that are performed, whether directly and/or indirectly, by the Company, as well as any action entailed in such matters.

 

 

5.8.

Any claim and/or demand in connection with actions of reporting and/or notices to any competent authority under any law and/or pursuant to rules or instructions or pursuant to the provisions of the tax laws applicable to the Company, including reports arising from the fact that the Company and/or an affiliated company and/or subsidiary of the Company is a public company whose securities have been offered to the public and/or are listed on a stock exchange in Israel and/or abroad, including the delivery of notices and/or reports and/or abstaining from filing such reports and/or notices and/or provision of information, representations and opinions and/or non-disclosure, whether directly or indirectly, whether or not by omission, to deliver any type of information, representation or opinion, as foregoing, at the required time pursuant to the law and/or in connection with any erroneous or faulty disclosure of such information, representation or opinion to third parties, including competent authorities and government entities.

 

5.9.

Any claim and/or demand filed directly or indirectly in connection with an omission in whole or part, by the Company and/or by the Company’s officers, managers and/or employees, on all matters relating to payment, reporting and/or documentation, by one of the state authorities, a foreign authority, municipal authority and/or any other payment required under the laws of the State of Israel, including payment of income tax, sale tax, betterment tax, transfer tax, excise tax, value added tax, customs, national insurance, salaries and/or withholding wages to employees and/or other withholding, including any type of interest or linkage additions.

 

5.10.

Any claim and/or demand relating to a decision and/or action in connection with work relationships in the company, including relating to the terms of employment or contractual engagement of the Company’s employees with the Company and/or pension plans and/or severance or pension funds and/or loans to employees and/or insurance and/or option plans and other benefits to employees and/or promotion plans, including in connection to occupational safety and hygiene conditions.

 

5.11.

Any claim and/or demand in connection with any decision and/or action relating to any patent, design, trademark or other intellectual property of and/or by the Company.

 

 

5.12.

Any claim and/or demand in connection with any decision and/or action on matters relating, whether directly or indirectly, to the environment and matters relating to the protection of health, manufacturing processes, distribution, transportation, storage, treatment or use of hazardous materials, including for bodily injuries, property damage or environmental damage.

 

5.13.

Any claim and/or demand in connection with any decision and/or action on matters relating, whether directly or indirectly, to antitrust matters, including restraint of trade, mergers and monopolies.

 

5.14.

Any claim and/or demand for any decision and/or action in connection with restructuring or reorganization of the Company, including, but without derogating from the generality of the foregoing, an acquisition, merger, split, change of the Company’s capital, arrangement between the Company and its shareholders or companies that they control, establishment of subsidiaries or affiliated companies, their dissolution or sale, allocation or distribution.

 

5.15.

Any claim and/or demand relating to any decision and/or action in connection with an affiliated company and/or subsidiary.

 

5.16.

Any claim and/or demand due to any decision and/or action in connection with a dividend and/or bonus share distribution in the Company and/or purchase of the shares of the Company and/or any company holding the Company.

 

5.17.

Any claim and/or demand due to any decision and/or action in connection with the filing of bids in tenders and/or issue or receipt of licenses and permits of any type or kind (including business licenses and licenses and approvals required for managing the Company’s business).

 

5.18.

Any claim and/or demand filed due to a decision and/or action relating to the approval of a transaction with an officer and/or with a controlling shareholder of the Company.

 

5.19.

Any claim and/or demand filed by any third party that suffered bodily injury or damage to a business or personal property, including loss of use thereof in the course of any act or omission attributed to the Company, including due to the use of the Company’s products or tools and/or due to renovation activities in the Company.

 

 

5.20.

Any decision and/or action that has led to the failure to acquire adequate insurance arrangements and/or failure to arrange adequate safety arrangements.

 

5.21.

Any administrative, public or judicial action, including, without derogating from the generality of the foregoing, orders, judgments, claims, demands, demand letters, instructions, arguments, investigations, proceedings and/or notices of noncompliance or violation of any action of a government authority and/or other entity that argue noncompliance with the provisions of any law, regulation, order, directive, rule, practice, instruction, license or judgment by the Company and/or by the officers of the Company in the framework of their position in the Company, as long as indemnity for it is not prohibited pursuant to any law.

 

5.22.

Any claim and/or demand that refers, inter alia, to events of the above types, in connection with the officer’s service in the Company and/or in another corporation, only if this was performed in his capacity as an officer and/or employee of the Company.

 

5.23.

Any claim and/or demand filed with respect to the appointment and/or motion for the appointment of an official receiver for the Company’s assets and/or any part of the Company’s assets and/or a dissolution motion against the Company and/or any proceeding for the purpose of a settlement or arrangement with the Company’s creditors.

 

Any provision in this section above that deals with the performance of any action shall be interpreted as also referring to its non-performance or abstaining from performing such action, unless the context of a certain provision does not tolerate such interpretation.

 

6.

Conditions Relating to Indemnity

 

The indemnity pursuant to this Letter of Indemnity shall be subject to meeting the following conditions:

 

6.1.

You shall notify the Company of any investigation and/or legal proceeding and/or administrative proceeding to be initiated against you and/or any other proceeding to be initiated against you by an authority authorized to conduct an investigation or proceeding, and of any written warning and/or any concern or threat that any investigation and/or legal proceeding and/or administrative proceeding and/or any other proceeding as foregoing may be initiated against you, immediately and promptly after first learning of this, and you shall transfer to the Company or to any person as the Company instructs you, promptly, any document delivered to you in connection with such proceeding and/or investigation and any information that comes to your knowledge with respect to such proceeding and/or investigation and its developments. In addition, you must inform the Company regularly about events with respect to which there is a concern they may cause an investigation and/or legal proceeding and/or administrative proceeding to be initiated against you.

 

 

6.2.

The Company shall be entitled to assume management of the investigation and/or legal proceeding and/or administrative proceeding and/or any other proceeding initiated against you by a competent authority, and to conduct it and/or to appoint an attorney, who shall be chosen by the Company for such purpose, to manage such investigation and/or legal proceeding and/or administrative proceeding and/or other proceeding.

 

The Company and/or such attorney, as foregoing, shall be entitled to act, in the framework of such management, at their discretion, and shall also be allowed to compromise in such proceeding and/or take any action to conclude such proceeding.

 

Upon the Company’s request, you shall sign any document authorizing the Company and/or such attorney to manage in your name such proceeding and to represent you in all that this entails.

 

For the avoidance of doubt, it is clarified that the attorney appointed by the Company as foregoing shall act and shall owe fiduciary duty to the Company and to you, and that the Company and/or such attorney shall not be allowed, in the framework of a criminal proceeding, to conclude the legal proceeding and/or investigation as foregoing by way of settlement and/or arrangement and/or admit any of the charges in your name and/or agree to any plea bargain, unless you give your consent to this, provided you shall only refuse to give such consent on reasonable grounds.

 

In addition, the Company and/or the attorney shall not be allowed to conclude a civil proceeding by way of a settlement and/or arrangement, as the result of which you shall be required to pay amounts for which you shall not be indemnified pursuant to this Letter of Indemnity, which shall also not be paid in the framework of the directors and officers liability insurance policy acquired and/or to be acquired by the Company, and/or admit in your name (whether in the framework of a hearing before the court or arbitration or in the framework of a settlement arrangement) the occurrence of any event that is not covered by this Letter of Indemnity and/or by the directors and officers liability insurance policy acquired and/or to be acquired by the Company, other than with your consent, provided you do not refuse to give such consent except on reasonable grounds only.

 

6.3.

You shall cooperate with the Company and/or such attorney and/or the insurer of the Company’s directors and officers liability insurance policy, in any reasonable way as you shall be required by any of them in the framework of their management in connection with such legal proceeding and/or administrative proceeding, as long as the Company and/or such insurer ensure coverage of all entailed expenses, so that you shall not be required to pay or finance them yourself.

 

 

6.4.

The Company shall not be required to indemnify you pursuant to this Letter of Indemnity for any amount that you shall pay pursuant to a settlement or arbitration, unless the Company approved in advance and in writing such settlement or conducting such arbitration, as applicable, and the Company shall not refuse to give its consent as foregoing other than on reasonable grounds only.

 

6.5.

The Company shall not be required to indemnify you pursuant to this Letter of Indemnity for any amount that you could have received in the framework of the Company’s directors and officers liability insurance policy and/or where such payment was prevented due to your action.

 

6.6.

The Company’s indemnification obligations pursuant to this Letter of Indemnity are personal towards you only, and this Letter of Indemnity and/or your rights pursuant thereto are not assignable or transferrable to other(s), except as detailed in section 8 below.

 

6.7.

It is hereby agreed that the court authorized to hear any disputes and/or disagreements on all matters relating to this Letter of Indemnity is the competent court in Tel Aviv-Yafo only.

 

6.8.

On the matter of the Company’s obligation to indemnify for any action that you performed or shall perform in your capacity as an officer and/or employee in a subsidiary of the Company and/or in an affiliated company of the Company and/or in another corporation (hereinafter, jointly and severally: the “Liable Corporation”), the following provisions shall also apply:

 

6.8.1.

The Company shall not be required to pay, pursuant to this Letter of Indemnity, amounts that you shall be entitled to receive and that you receive in practice from the Liable Corporation, in the framework of an insurance policy acquired by the Liable Corporation and/or pursuant to an undertaking in advance to indemnify or pursuant to a permit to indemnify retroactively, issued by the Liable Corporation.

 

 

6.8.2.

If your demand to receive indemnity and/or insurance coverage for an action that you performed by virtue of your position in the Liable Corporation that may be indemnifiable pursuant to this Letter of Indemnity is denied by the Liable Corporation or the insurance company of the Liable Corporation, as applicable, the Company shall pay you pursuant to this Letter of Indemnity amounts that you shall be entitled to pursuant to this Letter of Indemnity, if you are entitled to such amounts and if you assign to the Company your rights to receive them from the Liable Corporation and/or pursuant to the insurance policy of the Liable Corporation, and you authorize the Company to collect such amounts in your name, insofar as such authorization is required for the performance of the provisions of this section. On this matter, you undertake to sign any document required by the Company in order to assign your foregoing rights and authorize the Company to collect such amounts in your name.

 

6.8.3.

For the avoidance of doubt, it is clarified that this Letter of Indemnity shall not grant the Liable Corporation and/or any third party any rights towards the Company, including, without derogating from the generality of the foregoing, the right to claim and/or demand any payment from the Company as participation in the indemnity and/or insurance coverage to be provided to you by the Liable Corporation for an action that you performed by virtue of your position in the Liable Corporation.

 

7.

Applicability

 

The indemnity under this Letter of Indemnity shall apply starting from the approval of the issue of the indemnity undertaking by the general meeting, for the events detailed above that took place also before such date. The indemnity undertaking pursuant to this letter shall apply to you even after the termination of your service as an officer of the Company and/or of subsidiaries and/or affiliated companies of the Company, as long as the actions for which the indemnity undertaking was provided were made and/or shall be made in the period of your service as an officer of the Company and/or of subsidiaries and/or affiliated companies of the Company. The Company’s obligations as foregoing shall also apply to the benefit of your estate, heirs or other substitutes by law.

 

 

8.

Miscellaneous

 

8.1.

The Company’s obligations pursuant to this Letter of Indemnity shall be interpreted broadly and in a manner designed to fulfill them, inasmuch as permissible by law, for the purpose for which they were intended. In the event of any contradiction between any provision of this Letter of Indemnity and a provision of law that may not be stipulated, amended or supplemented, such provision of law shall prevail, however this shall not adversely affect or derogate from the effect of all other provisions of this Letter of Indemnity.

 

8.2.

This Letter of Indemnity shall not derogate from the Company’s right to decide on indemnity retroactively pursuant to the provisions of any law.

 

8.3.

This Letter of Indemnity shall enter into effect upon your signing of a copy thereof in the place intended for such purpose and delivery of the signed copy to the Company.

 

8.4.

The contents of this Letter of Indemnity may not be amended, unless signed by you and the Company. For the avoidance of doubt, it is hereby determined that this Letter of Indemnity does not constitute a contract in favor of a third party, including any insurer. In addition, this indemnity undertaking may not be assigned, and no insurer shall have the right to demand the Company’s participation in any payment that an insurer is obligated to pursuant to the insurance agreement made with it, excluding the deductible.

 

8.5.

This Letter of Indemnity is subject to the provisions of Chapter Three of Part Six of the Companies Law.

 

8.6.

This Letter of Indemnity supersedes any other letter of indemnity that you were given, if any.

 

Date:

 

I hereby confirm receipt of this letter and agree to its terms:

 

Date:

Signature:

 

 

 

Exhibit 10.2

 

Sahar Investments Ltd.

 

Employee Option Allocation Plan – 2010

 

Pursuant to section 102 of the Income Tax Ordinance [New Version], 5721-1961

 

1.

Introduction

 

1.1.

Presented hereunder is a plan for allocating options to the officers and some of the employees of Sahar Investments Ltd., public company no. 520041146 (hereinafter the “Company”), through a trustee, pursuant to the provisions of section 102 of the Income Tax Ordinance [New Version], 5721-1961 (hereinafter the “Plan”). In the framework of the Plan, the Company, pursuant to a resolution of the Company’s board of directors that it shall adopt from time to time, is to allocate to the officers and some of its employees or to officers and employees of an Affiliated Company, as defined below, for no consideration and subject to the terms set forth below in this Plan, a total of up to 14,193,187 nonmarketable options, each of which shall be convertible to one ordinary share of the Company of ILS 0.01 par value, against payment to the Company of the Conversion Price (as defined below).

 

1.2.

The purpose of the Plan is to allow the Company to have the officers and employees of the Company and of an Affiliated Company share in the Company’s success, and to grant those employees an incentive, the financial value of which is linked to the Company’s performance. The Plan is also designed to award officers and employees for their efforts in promoting the Company and its business and in order to strengthen their commitment to the Company in the long term.

 

2.

Definitions

 

2.1.

In this Plan the following terms shall have the definition appearing next to them, unless explicitly stated otherwise in the Plan:

 

		“Options”	-	Up to 14,193,187 nonmarketable options, each of which can be converted, subject to the provisions of the Plan, during the conversion period and against the Conversion Price, to one Conversion Share of the Company.
		“TASE”	-	The Tel Aviv Stock Exchange Ltd.
		“Company’s Board”	-	The Company’s board of directors, including a committee to be appointed by the board of directors for purpose of providing the board of directors with recommendations in connection with executing the Plan and its administration, subject to the provisions of the Company’s articles of association and the provisions of applicable law, insofar as such a committee is appointed.

 

 

		“Company”	-	As defined in section 1.1 above.
		“Affiliated Company”	-	Meaning an “employing company” as defined in section 102(a) of the Ordinance, whether its date of incorporation precedes or follows the approval date of the Plan.
		“Rules”	-	The Income Tax (Tax Benefits when Allocating Shares to Employees) Rules, 5763-2003, as shall be amended from time to time.
		“Conversion Shares”	-	Up to 14,193,187 ordinary shares of the Company par value ILS 0.01 each, to emanate from the options conversion.
		“Trustee”	-	Whoever is appointed by the Company to serve as trustee and approved by the tax authorities, all subject to section 102(a) of the Ordinance.
		“Option Agreement”	-	The agreement to allocate Options pursuant to the Plan, to be executed between the Company and the Offeree, and which shall determine the terms of the allocation of the Options to the Offeree.
		“Offeree/s”	-	Some of the employees of the Company or of an Affiliated Company and/or officers of the Company or of an Affiliated Company and/or directors of the Company or of an Affiliated Company, whose identity shall be determined pursuant to a Company’s Board resolution adopted from time to time, and who are not controlling shareholders of the Company, as such term is defined in section 32(9) of the Ordinance, and who shall not become controlling shareholders of the Company as a result of the allocation under the Plan.
		“Ordinance”	-	The Income Tax Ordinance [New Version], 5721-1961, including its amendments.
		“Allocation Date”	-	Any date to be resolved by the Company’s Board with respect to any allocation of Options under this Plan, when the Company shall allocate warrants to the Trustee on behalf of an Offeree or Offerees. The Allocation Date shall in any event only fall on a day following the approval of the listing of the Conversion Shares that are offered to the Offerees in the framework of the allocation, and after completing all the necessary actions and obtaining all the approvals required under section 102 of the Ordinance and the Rules.

 

 

		“Termination of Employment Date”	-	The earlier of the following dates: (a) The day notice is provided regarding the Offeree’s termination of employment at the Company or Affiliated Company, for any reason whatsoever including and without derogating from the generality of the foregoing in the event of death, permanent loss of 100% competence at work or dismissal.
		“Lock-in Period”	-	A period during which the Offeree shall not be entitled to receive the Options and/or Conversion Shares received by the Trustee therefor and/or any right granted by virtue thereof and/or to sell the Conversion Shares as aforesaid, and which, pursuant to the provisions of section 102 of the Ordinance and the Rules, begins on the Allocation Date, and ends in accordance with the taxation track that the Company’s Board shall select.
		“Trusteeship Period”	-	A period starting on the Allocation Date and ending not before the end of the Lock-in Period or the end of any other minimum period pursuant to the provisions of section 102 of the Ordinance, the Rules and this Plan, during which the warrants and/or Conversion Shares and/or any right granted by virtue thereof shall be held by the Trustee on behalf of the Offeree under the provisions of section 102 of the Ordinance.
		“Conversion Period”	-	The period during which the Offeree shall be entitled to convert the Options he shall be granted under the Plan into Conversion Shares, and which begins on the date such Options are granted to such Offeree pursuant to a board of directors resolution and as stated in section 5.1 of the Plan, and ending on the earlier of the following dates: (a) the end of the Plan period, or (b) 6 months after the Offeree’s Termination of Employment Date, all as long as nothing has been set forth otherwise in the Options Plan and subject to the provisions of section 6 of the Plan below.
		“Period of the Plan”	-	A period starting on the date the Plan is adopted by the Company’s Board and ending 7 years after such date.

 

 

3.

Administration of the Plan

 

3.1.

Subject to the provisions of any law, the Company’s incorporation documents and any other agreement signed between the Company’s shareholders, the Plan shall be administered and executed by the Company’s Board, whose interpretation, implementation and manner of administering the Plan shall be final and binding.

 

3.2.

Without derogating from the generality of the foregoing, the Company’s Board shall have the sole authority to determine and/or change, before the relevant Allocation Date and subject to applicable law, the identity of the Offerees, the terms and provisions of the Option Agreements, the number of Options to be allocated to every Offeree, the Allocation Date, the conversion prices, the Conversion Period, the Lock-in Period and the manner in which and dates when the Offeree shall be entitled to receive the Options allocated to the Trustee on his behalf and/or the Conversion Shares that the Trustee shall receive therefor, the taxation track of the Options pursuant to the provisions of section 102 of the Ordinance, and to resolve questions that may arise in connection with the Plan’s implementation, to change and amend the Plan, to make any other decision and to take any other action required for purposes of administering and executing the Plan.

 

3.3.

Should there be any need to conform the Plan to TASE’s requirements, the Company’s Board shall determine suitable provisions, and shall make appropriate changes to the Plan in accordance with TASE’s requirements, while taking effort to prejudice the Offerees’ rights as little as possible.

 

4.

Trustee

 

4.1.

Subject to completing all of the necessary actions and obtaining all the approvals required under law, the Company shall allocate to the Trustee, on every Allocation Date, for no payment, on behalf of an Offeree or Offerees, all of the Options designated for such Offeree pursuant to a resolution of the board of directors.

 

4.2.

Notwithstanding the foregoing, the Company shall not allocate Options to the Trustee for an Offeree before such Offeree executes an Option Agreement that shall include, among other things, the following provisions:

 

4.2.1.

A declaration regarding the Offeree agreeing to all of the Plan’s terms, including and without derogating from the generality of the foregoing, his agreement to bear all the tax liabilities and other mandatory payments to arise as a result of the allocation of the Options, their conversion into the Conversion Shares, their transfer or transfer of the Conversion Shares and an undertaking to indemnify the Company should action be taken against it for such tax;

 

 

4.2.2.

An undertaking of the Offeree to fulfill the provisions of law with respect to the prohibition to use inside information of the Company;

 

4.2.3.

An undertaking of the Offeree to fulfill the provisions of section 102 of the Ordinance, the Rule and the Plan;

 

4.2.4.

Termination of any prior allocation agreement or undertaking to allocate Options signed between the Company and Offeree, if and insofar such an agreement or undertaking were executed in the past.

 

4.3.

The Trustee shall hold Options and any right granted by virtue thereof, including the Conversion Shares to be received therefor and any right granted thereunder, in trust on behalf of the Offerees, for the duration of the Trusteeship Period.

 

4.4.

Subject to the provisions of section 4.3 above, as long as the Options or Conversion Shares received therefor have not been transferred to the name of the Offeree or any third party, or sold by the Trustee, all pursuant to the instructions of the Offeree, the Trustee shall be registered in the Company’s books as the owner of the Options and/or Conversion Shares, as applicable.

 

5.

Options eligibility

 

5.1.

The Company’s Board shall determine, with respect to every Offeree, the manner in which and the dates when each Offeree shall be granted the right to the Options to be allocated to the Trustee on behalf of such Offeree (vesting) (hereinafter the “Eligibility Date”), and the Company’s Board is permitted to determine that the Options are to be granted to the Offeree in a few installments and on a few Eligibility Dates.

 

5.2.

In the event of the Offeree’s termination of employment, the Offeree shall be entitled solely to those Options the Eligibility Date of which has passed before the Termination of Employment Date as aforesaid, and his eligibility to receive any additional Options shall expire on such date.

 

6.

Conversion of Options

 

6.1.

On every business day during the Conversion Period, subject to obtaining all of the required approvals for such pursuant to law, the Offeree shall be permitted to convert the Options to which he shall be entitled under section 5 above, subject to the provisions of the Option Agreement and in accordance with the terms of the conversion set forth below.

 

 

6.2.

Subject to adjustments pursuant to section 8 below, every Option shall be convertible into one Conversion Share.

 

6.3.

Manner of converting the Options to Conversion Shares

 

Subject to the provisions of section 102 of the Ordinance and to all legal provisions applicable to the Company and/or to the Offerees and to obtaining all the approvals required under applicable law as stated:

 

6.3.1.

Options are to be converted into Conversion Shares by providing written notice to the Company, in form to be determined by the Company’s Board and the Trustee (hereinafter the “Conversion Notice”) regarding the amount of Options that the Offeree seeks to convert into Conversion Shares, including the cash amount that at such time shall be equal to the relevant conversion price, as shall be set forth in the Option Agreement pursuant to a resolution of the Company’s Board.

 

6.3.2.

The Conversion Date shall be the date when the Company is provided the Conversion Notice including the relevant conversion price (hereinafter the “Conversion Date”).

 

6.3.3.

An Offeree seeking to convert Options into Conversion Shares as aforesaid shall immediately upon the Company’s first request and as a precondition for converting the Options as aforesaid execute any document it shall be required to sign pursuant to the Plan, the Company’s articles of association and/or under applicable law, in order to allow the conversion to take place.

 

6.3.4.

A Conversion Notice cannot be amended or cancelled.

 

6.3.5.

The Offeree shall be entitled to convert the Options that he is eligible for in installments; however, he shall not be permitted to convert a fraction of an Option.

 

6.3.6.

An Option that is not converted until the end of the Conversion Period shall immediately expire and not grant its owners any rights whatsoever.

 

6.3.7.

Within three (3) business days of the Conversion Date, provided the relevant conversion price has been paid and all the documents, approvals and payments required from the Offeree as a condition for converting the Options have been submitted and made, the Company shall allocate to the Trustee (on behalf of the Offeree) the Conversion Shares for the Options that he shall convert, and the Trustee shall hold them according to the provisions of the deed of trust.

 

 

6.3.8.

The Trustee shall return the assignment of option deed to the Company in respect of which the Conversion Shares were allocated, and the Company shall provide the Trustee with a new deed of options assignment for the remaining Options that have not yet been converted by the Offeree.

 

6.3.9.

Subject to the Conversion Shares being approved for listing on TASE, immediately after converting the Options (but in any event not before the end of the Lock-in Period), the Company shall contact TASE with a request to have the Conversion Shares listed on TASE.

 

6.4.

Conversion of Options in the event of termination of employment

 

Notwithstanding the provisions in section 6.3 above, the following reservations shall apply to a conversion of the Options:

 

6.4.1.

In the event employment is terminated before commencement of the Conversion Period, the Offeree shall not be entitled to convert the Options to be held by the Trustee on his behalf, and the Options shall expire and not grant the Offeree any right.

 

6.4.2.

In the event employment is terminated during the Conversion Period, the Offeree shall be entitled to convert the Options where all or part of the Eligibility Dates have passed as stated in section 5 above, subject to the Conversion Notice and relevant conversion price having been provided to the Company until the end of the Conversion Period.

 

6.4.3.

Notwithstanding section 6.4.2 above, an Offeree whose employment with the Company or Affiliated Company was terminated following his death or the permanent loss of 100% competence at work, shall be entitled to convert the Options where all or part of the Eligibility Dates have passed as set forth in section 5 above, subject to the Conversion Notice and relevant conversion price having been provided to the Company until the earlier of the following two dates: (a) 12 months from his Termination of Employment Date (as defined above) at the Company or Affiliated Company; (2) end of the Conversion Period.

 

6.4.4.

Notwithstanding section 6.4.2 above, in the event the Offeree committed any of the following: he was convicted in a judgment of having committed embezzlement, theft, or any other offense that involves moral turpitude; a serious disciplinary infraction; and/or a judicial or quasi-judicial court determined that the Offeree violated his fiduciary duty towards the Company, then the Offeree shall not be entitled to convert the Options that were allocated on his behalf, or any one thereof, whose Eligibility Dates have not yet passed pursuant to section 5.1 above, and they shall expire immediately, without providing any right to the Offeree therefor.

 

 

7.

Rights of the Conversion Shares

 

7.1.

The Conversion Shares shall for all intents and purposes have rights equal to the ordinary shares existing in the Company’s capital on the date the Options are allocated pursuant to this Plan.

 

7.2.

Rights as a shareholder

 

7.2.1.

It is hereby clarified that the Offeree is not to be granted any right that is attached to the Conversion Shares until the date the Options have been converted pursuant to section 6 above.

 

After converting the Options to Conversion Shares the Offeree shall be granted any right attached to the Conversion Shares as aforesaid, and the Conversion Shares shall for all intents and purposes have rights that are equal to the ordinary shares of the Company, including the right to receive dividends and to participate in a distribution of bonus shares or any other distribution, where the effective date for the right to receive them is the Conversion Date or thereafter. It is noted that as long as the Conversion Shares are registered to the Trustee’s name, the dividend amount is to be paid to the Trustee (after withholding tax according to law), who shall transfer it to the Offeree after duly withholding tax at source.

 

7.2.2.

As long as the Conversion Shares are held by the Trustee, the Trustee shall be deemed, vis-à-vis the Company and any third parties, to be the owner of the Conversion Shares for all intents and purposes, including and without derogating from the generality of the foregoing for purposes of receiving notices from the Company, and the Trustee shall vote in the general meetings of the Company pursuant to and in accordance with the instructions of the Offeree.

 

7.2.3.

Without derogating from the generality of the foregoing, unless agreed otherwise in writing, the Offerees shall not have any right to limit the other shareholders in selling all or part of their shares and/or a right to demand of the Company and/or its shareholders preferential rights over any other third parties, including a right of first refusal, a tag-along right or a right to join the purchase of Company securities that are being offered to the other shareholders.

 

 

8.

Protection of the Offerees during the Period of the Plan

 

8.1.

The Company shall at all times maintain ordinary shares in its registered share capital of ILS 0.01 par value each, in sufficient number for allocating all of the Conversion Shares to the Offerees pursuant to the Plan.

 

8.2.

Adjustment for changes to the Company’s capital structure

 

8.2.1.

In any event where bonus shares are distributed in a manner that the effective date regarding the distribution of the bonus shares falls before the end of the Conversion Period, and assuming the Offeree is entitled to convert the Options, the number of Conversion Shares that the Offeree is entitled to upon the conversion of the Options shall increase, by adding the number of shares that the Offeree was entitled to receive as bonus shares, had he converted all the Options allocated to the Trustee on his behalf under this Plan and the Option Agreement (including those still in the Trustee’s possession) prior to the effective date as aforesaid.

 

8.2.2.

In any event of the Company making a cash dividend payment to its ordinary shareholders, the conversion price of every Option shall be adjusted according to the TASE guidelines.

 

8.2.3.

In the event of a Company rights issue to the shareholders, an amount equal to the bonus component of the rights shall be deducted from the exercise price of every Option on the “ex-rights” date. In this respect “bonus component of the rights” means: The difference between the share price on TASE pursuant to the rights issue prospectus to serve as a basis for calculating the “ex-rights” share price that is set forth in the prospectus, and the “ex-rights” share price according to the foregoing prospectus.

 

8.2.4.

In any event of a split or consolidation of the Company’s shares such that the effective date with respect to such changes to the Company’s share capital shall fall before the end of the Conversion Period, and assuming the Offeree is entitled to convert the Options, the number of Conversion Shares shall be adjusted by increasing or decreasing the number of shares that the Offeree shall be entitled to upon converting the Options in the number of shares that the Offeree would have been entitled to had he converted all the Options allocated to the Trustee on his behalf according to this Plan and the Option Agreement (including those still in the Trustee’s possession) before the effective date as aforesaid.

 

 

8.3.

Sale of the Company’s assets to a third party or a Company merger

 

8.3.1.

In the event all or a substantial part of the Company’s assets are to be sold to a third party, or in the event the Company is about to merge into or with another company, including a share exchange transaction (hereinafter the third party and other company shall be jointly referred to as the “Absorbing Company”), the Company shall ensure that the Plan is to be adopted by the Absorbing Company, and the Options for Company shares shall be replaced with comparable options of equal value to the shares of the Absorbing Company and/or its subsidiary and/or its parent company.

 

8.3.2.

Notwithstanding the foregoing, in the event the Absorbing Company shall refuse to adopt the foregoing Plan, the Company’s Board shall allow the Offeree, subject to any applicable law, to convert all or part of the Options allocated on his behalf, including Options that the Offeree is not entitled to convert at such time. In such an event, the Company’s Board shall inform the Offeree that he has the possibility of converting the Options as aforesaid, for a duration of 30 days from the day notice is provided. Upon the end of such period the Options shall expire.

 

The Offeree shall bear any tax liability to apply for converting the Options as aforesaid, if and insofar as applicable.

 

9.

Restrictions on exercise – transfer of the Options and/or Conversion Shares

 

9.1.

The Options and/or Conversion Shares, including the rights granted thereunder, shall be held by the Trustee for a period no shorter than the Lock-in Period.

 

9.2.

Without derogating from the other provisions of the Plan and the provisions of applicable law, the Trustee shall not transfer the Options to the Offeree, other than following their conversion to Conversion Shares (i.e. the Trustee shall not transfer Options to the Offeree but rather shares only) and in any event not before the end of the Lock-in Period.

 

9.3.

Without derogating from section 9.2 above, during the Lock-in Period or prior to payment of the tax that applies as stated in section 7 of the Rules, whichever the later, the Options (including the Conversion Shares to be received therefor by the Trustee) shall not be transferable or assignable and they shall not be placed under a pledge, foreclosure or other voluntary charge, and no power of attorney or deed of transfer shall be given for them, whether immediately effective or effective on a future date, except for a transfer by force of a will or pursuant to law; should the Options and/or Conversion Shares that were received therefor be transferred by virtue of a will or pursuant to law as aforesaid, the provisions of section 102 and the provisions of the Rules shall apply to the Offeree’s successors or transferees, as applicable.

 

 

9.4.

After the end of the Lock-in Period every Offeree shall be permitted at any time to request the Trustee to transfer all or part of the Conversion Shares to its name, which are to be received by the Trustee for their conversion, or to sell all or part of the conversion shares as aforesaid, as the Offeree shall order, and the Trustee shall not be required to transfer the Conversion Shares or sell them as aforesaid other than after payment of the tax applicable under section 102 of the Ordinance and pursuant to the Rules, and the Trustee shall have confirmation in respect thereof from the assessing officer at the office where the withholdings file of the Company is managed.

 

9.5.

If according to the terms of the Plan the Offeree is to be allocated bonus shares due to the Options being converted into Conversion Shares, the bonus shares shall be allocated under the Trustee’s name. The Offeree shall be entitled to instruct the Trustee to exercise the bonus shares only after the end of the Lock-in Period.

 

10.

No employment obligation

 

Nothing stated in the Plan shall impose any obligation on the Company or Affiliated Company, as applicable, to employ the Offeree under any terms or at all, and the Company or Affiliated Company shall be permitted to terminate the Offeree’s employment and to alter his terms of employment at any time, subject to the Offeree’s employment agreement and in accordance with applicable law.

 

11.

Tax liabilities

 

11.1.

The Options are to be allocated to the Offerees through the Trustee, in accordance with the provisions of section 102 of the Ordinance. The first taxation track selected by the Company upon adopting the Plan is the capital gains track, and the Company’s Board shall be permitted to alter it from time to time, pursuant to the provisions of section 102 of the Ordinance.

 

11.2.

All the tax liabilities for allocating the Options (whether or not under the provisions of section 102 of the Ordinance), their conversion, sale of the Conversion Shares, transfer of the Conversion Shares to the Offeree’s name and/or other obligations to arise for the Offeree and/or Trustee in connection with the Plan, shall apply in full to the Offeree for whom the Options were allocated.

 

11.3.

The Company (and/or Trustee) shall not bear the tax liability, if any, for the offer to the Offeree and/or anything included in its execution, neither by way of grossing up nor in any other way. Should any action be brought against the Company for any reason in connection with such tax payment, the Offeree shall, under the Options Agreement as set forth in section 4.2.1, undertake to indemnify the Company for its costs in connection with such claim, including and without derogating from the generality of the foregoing, for costs related to its obligation to withhold tax, interest, fines, etc., provided the Company acted reasonably with respect to the tax payments.

 

 

12.

Conditions precedent and interpretation

 

12.1.

The execution of the Plan is subject to the Conversion Shares being listed on TASE. Should this condition not be met, the Plan is to be cancelled.

 

12.2.

The Plan is subject to the completion of all the necessary actions and on obtaining all of the approvals required under section 102 of the Ordinance and the Rules, including the provision of prior notice regarding the Plan to the assessing officer at the office where the Company’s withholdings file is managed.

 

12.3.

In the event of a contradiction between the provisions of the Ordinance and the Rules and the provisions of the Plan, the provisions of the Ordinance and the Rules shall prevail.

 

13.

No exclusivity

 

It is clarified that the adoption of the Plan by the Company’s Board shall not be interpreted as limiting or in any way preventing the Company’s possibilities for incentivizing its employees, at its complete discretion, including and without derogating from the generality of the foregoing, by granting shares or Options in a manner differing from the Plan, insofar as the provision of shares or Options as aforementioned is compatible with the Company’s documents of incorporation and does not contradict any law.

 

 

Amendment 1 to the Option Plan of Enlight Renewable Energy Ltd (“the Plan” and “Enlight”)

 

A.

Introduction:

 

1.

The Company’s Board of Directors determined that the Plan will also apply to allocation of options to employees or consultants of the Company and/or its subsidiaries (direct or indirect) whose place of residence is outside Israel, except as specified explicitly in this Amendment below (“Foreign Offerees”).

 

2.

Unless stated explicitly otherwise, the definitions and terms set forth in this Amendment will have the meaning given to them under the Plan.

 

B.

Allocation to Foreign Offerees

 

1.

If the Company allocates options to Foreign Offerees, then the provision of the Plan will apply with the following changes only:

 

1.1

The options and exercise shares will not be allocated to Foreign Offerees through the Trustee under the Plan in accordance with section 102 of the Ordinance, but the Company may appoint a party to act as the Plan coordinator for the purpose of management thereof.

 

1.2

The provisions of section 102 of the Ordinance and the rules thereunder will not apply to allocation to Foreign Offerees.

 

2.

Notwithstanding the foregoing, if an Offeree may not exercise options (vested) at the time of exercise requested by him, because at that time issuance of shares by the Company would constitute a breach of the listing requirements under the Securities Law (or any other parallel law) in the country of residence of the Offeree, then the allocation will not be made until such impediment is removed, and if the impediment is not removed within 6 months, the options and any right in respect thereof will expire and the parties will examine an alternative compensation mechanism.

 

C.

Subjection to the provisions of foreign law

 

1.

The laws of the State of Israel will apply to all matters relating to the meaning, validity and interpretation of the Plan, also in respect of Foreign Offerees.

 

2.

The Offerees will also be subject to relevant law in their place of residence, including the tax laws in their country of residence (“Destination Country”).

 

3.

The options and exercise shares are not and shall not be listed for trading in the Destination Country.

 

4.

No options and/or other securities shall be issued in the Destination Country as long as they require a prospectus.

 

5.

The Company will act to obtain all approvals required from the relevant regulatory authorities for execution of the Plan in respect of Foreign Offerees, including in the Destination Countries, if and insofar as required. If after investment of reasonable efforts, the Company fails to obtain such regulatory approvals that the Company believes are necessary for execution of the Plan to Foreign Offerees, then the Company will be released from any responsibility.

 

6.

The provisions of this Amendment above do not purport to be an authoritative interpretation of the provision of the law relating to taxes that may apply in respect of granting of the options offered to Foreign Offerees and do not constitute a substitute for legal and professional advice in this regard. As is customary with investment in securities, Offerees should weigh the different tax aspects and tax implications of their investment and consult their professional advisors, including legal and tax advice given their specific data.

 

 

Exhibit 10.3

 

Amendment 1 to the Option Plan of Enlight Renewable Energy Ltd (“the Plan” and “Enlight”)

 

A.

Introduction:

 

1.

The Company’s Board of Directors determined that the Plan will also apply to allocation of options to employees or consultants of the Company and/or its subsidiaries (direct or indirect) whose place of residence is outside Israel, except as specified explicitly in this Amendment below (“Foreign Offerees”).

 

2.

Unless stated explicitly otherwise, the definitions and terms set forth in this Amendment will have the meaning given to them under the Plan.

 

B.

Allocation to Foreign Offerees

 

1.

If the Company allocates options to Foreign Offerees, then the provision of the Plan will apply with the following changes only:

 

1.1

The options and exercise shares will not be allocated to Foreign Offerees through the Trustee under the Plan in accordance with section 102 of the Ordinance, but the Company may appoint a party to act as the Plan coordinator for the purpose of management thereof.

 

1.2

The provisions of section 102 of the Ordinance and the rules thereunder will not apply to allocation to Foreign Offerees.

 

2.

Notwithstanding the foregoing, if an Offeree may not exercise options (vested) at the time of exercise requested by him, because at that time issuance of shares by the Company would constitute a breach of the listing requirements under the Securities Law (or any other parallel law) in the country of residence of the Offeree, then the allocation will not be made until such impediment is removed, and if the impediment is not removed within 6 months, the options and any right in respect thereof will expire and the parties will examine an alternative compensation mechanism.

 

C.

Subjection to the provisions of foreign law

 

1.

The laws of the State of Israel will apply to all matters relating to the meaning, validity and interpretation of the Plan, also in respect of Foreign Offerees.

 

2.

The Offerees will also be subject to relevant law in their place of residence, including the tax laws in their country of residence (“Destination Country”).

 

3.

The options and exercise shares are not and shall not be listed for trading in the Destination Country.

 

4.

No options and/or other securities shall be issued in the Destination Country as long as they require a prospectus.

 

5.

The Company will act to obtain all approvals required from the relevant regulatory authorities for execution of the Plan in respect of Foreign Offerees, including in the Destination Countries, if and insofar as required. If after investment of reasonable efforts, the Company fails to obtain such regulatory approvals that the Company believes are necessary for execution of the Plan to Foreign Offerees, then the Company will be released from any responsibility.

 

6.

The provisions of this Amendment above do not purport to be an authoritative interpretation of the provision of the law relating to taxes that may apply in respect of granting of the options offered to Foreign Offerees and do not constitute a substitute for legal and professional advice in this regard. As is customary with investment in securities, Offerees should weigh the different tax aspects and tax implications of their investment and consult their professional advisors, including legal and tax advice given their specific data.

 

 

 

Exhibit 10.4

 

Execution Version

 

ENLIGHT RENEWABLE ENERGY LTD.

 

2010 EMPLOYEE OPTION Allocation Plan

 

U.S. SUB-PLAN

 

1.             Purposes of the U.S. Sub-Plan. This U.S. Sub-Plan is an addendum to the Enlight Renewable Energy Ltd. (previously known as Sahar Investment Ltd.) 2010 Employee Option Allocation Plan, as amended, including the first amendment (the “Plan”), adopted by the Board to provide for the grant of Options to eligible persons in the United States or who are or may be subject to United States taxes. Options granted under the U.S. Sub-Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant of the Option and subject to the applicable provisions of Section 422 of the Code and the regulations promulgated thereunder, including, without limitation, the requirement that the shareholders of the Company approve this U.S. Sub-Plan, and in specific the ISO pool under Section 3 below. Any Option granted as an Incentive Stock Option at a time when the applicable requirements of Section 422 of the Code and regulations thereunder have not been met will automatically be classified as a Nonstatutory Stock Option. Terms used herein but not otherwise defined shall have the meanings assigned to them in the Plan. Except as modified by the U.S. Sub-Plan, all provisions of the Plan shall be incorporated into the U.S. Sub-Plan as if fully set forth herein. Notwithstanding the foregoing and below, the exercise of the Options under the U.S. Sub-Plan will generally be executed through a cashless exercise mechanism according to which the Offeree will receive cash denominated in new Israeli Shekel (ILS) equivalent in value to the Shares exercised net the exercise price, withholdings and other deductions, as detailed under the Option Agreement.

 

2.             Definitions. The following definitions shall apply to grants made pursuant to the U.S. Sub-Plan:

 

(a)           “Administrator” means the Board or a Committee.

 

(b)          “Applicable Laws” means all applicable laws, rules, regulations and requirements, including, but not limited to, all applicable United States federal or state laws, any Stock Exchange rules or regulations, and the applicable laws, rules or regulations of any other country or jurisdiction where Options are granted under the U.S. Sub-Plan or U.S. Offerees reside or provide services, as such laws, rules, and regulations shall be in effect from time to time.

 

(c)           “Board” means the Board of Directors of the Company.

 

(d)           “California Offeree” means an U.S. Offeree whose Option and/or Conversion Shares are issued in reliance on Section 25102(o) of the California Corporations Code.

 

(e)           “Cause” for Termination of Employment means “Cause” as defined in the employment agreement between an Offeree and the Company or a Related Company, or if an Offeree does not have such and employment agreement, means a conviction in a judgment of embezzlement, theft, or another offense involving dishonor; a commitment of a serious breach of discipline; and/or a court or quasi-judicial court ruling that the Offeree breached his or her fiduciary duty towards the Company or a Related Company.

 

(f)            “Code” means the United States Internal Revenue Code of 1986, as amended.

 

(g)          “Committee” means a committee of directors or other individuals satisfying Applicable Laws appointed by the Board to administer the U.S. Sub-Plan in accordance with Section 5 below.

 

 

(h)           “Company” means Enlight Renewable Energy Ltd., an Israeli company (no. 520041146), formerly known as Sahar Investment Ltd.

 

(i)            “Disability” means “disability” within the meaning of Section 22(e)(3) of the Code.

 

(j)            “Employee” means any person employed by the Company or a Related Company, with the status of employment determined pursuant to such factors as are deemed appropriate by the Company in its sole discretion, subject to any requirements of Applicable Laws, including the Code.

 

(k)           “Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

 

(l)            “Fair Market Value” means, as of any date, the per share fair market value of the Shares, as determined by the Administrator in good faith on such basis as it deems appropriate and applied consistently with respect to U.S. Offerees. Whenever possible, the determination of Fair Market Value for an applicable date shall be based upon the per share closing price for the Shares on the Stock Exchange on which they are listed, if any, as reported in such source as the Administrator deems reliable. The determination of Fair Market Value may be based on any reasonable method permitted under Section 409A of the Code, including, without limitation, by using the average trading price over a period of days; provided that the number of days does not exceed 30 calendar days.

 

(m)          “Incentive Stock Option” means an Option intended to, and which does, in fact, qualify as an incentive stock option within the meaning of Section 422 of the Code.

 

(n)           “Nonstatutory Stock Option” means an Option that is not intended to, or does not, in fact, qualify as an Incentive Stock Option.

 

(o)           “Officer” means a non-Employee officer of the Company or a Related Company.

 

(p)           “Option” means an Option (as defined in the Plan), which is granted pursuant to the U.S. Sub-Plan.

 

(q)           “Option Agreement” means an Option Agreement used by the Administrator to grant Options under the U.S. Sub-Plan.

 

(r)            “Parent” means any company (other than the Company) in an unbroken chain of companies ending with the Company if, at the time of grant of the Option, each of the companies other than the Company owns shares or interests possessing 50% or more of the total combined voting power of all classes of shares or interests in one of the other companies in such chain. A company that attains the status of a Parent on a date after the adoption of the U.S. Sub-Plan shall be considered a Parent commencing as of such date.

 

(s)           “Section 409A of the Code” means Section 409A of the Code and any final Treasury Regulations and Internal Revenue Service guidance thereunder, as each may be amended from time to time.

 

(t)            “Securities Act” means the United States Securities Act of 1933, as amended.

 

(u)           “Share” means an ordinary share of the Company, as adjusted in accordance with the Plan and the U.S. Sub-Plan, including any addendum thereto.

 

 

(v)           “Stock Exchange” means any stock exchange or consolidated share price reporting system on which prices for the Shares are quoted at any given time.

 

(w)          “Subsidiary” means any company (other than the Company) in an unbroken chain of companies beginning with the Company if, at the time of grant of the Option, each of the companies other than the last company in the unbroken chain owns shares or interests possessing 50% or more of the total combined voting power of all classes of shares or interests in one of the other companies in such chain. A company that attains the status of a Subsidiary on a date after the adoption of the U.S. Sub-Plan shall be considered a Subsidiary commencing as of such date.

 

(x)            “Tax-Related Items” means any or all applicable national, local or other income tax, social insurance or other social contributions, national insurance, social security, payroll tax, fringe benefits tax, payment on account, withholding, required deductions or payments or other tax-related items.

 

(y)           “Ten Percent Holder” means a person who owns shares or interests representing more than 10% of the voting power of all classes of shares or interests of the Company or any Parent or Subsidiary measured as of an Option’s date of grant.

 

(z)            “U.S. Offeree” means an Offeree who is granted an Option under the U.S. Sub-Plan.

 

(aa)         “U.S. Sub-Plan” means this addendum to the Enlight Renewable Energy Ltd. 2010 Employee Option Allocation Plan, as amended.

 

3.             Effectiveness and Term. The U.S. Sub-Plan shall become effective upon its adoption by the Board and shall continue in effect for a term of 10 years from such date unless sooner terminated pursuant to the Plan. If and to the extent required under Applicable Laws, the U.S. Sub-Plan shall be subject to the approval of the Company’s shareholders within 12 months before or after this U.S. Sub-Plan is adopted by the Board, in the manner and to the degree required under Applicable Laws.

 

4.             Shares Subject to the U.S. Sub-Plan. Subject to the provisions of Section 8 below, the maximum aggregate number of Shares that may be issued under the U.S. Sub-Plan is 14,193,187 Shares, all of which Shares may be issued under the U.S. Sub-Plan pursuant to Incentive Stock Options and which are the same Shares that are reserved for issuance under the Plan.  The Shares issued under the U.S. Sub-Plan may be authorized, but unissued, or reacquired Shares.  If an Option should expire or become unexercisable for any reason without having been exercised in full, the unissued Shares that were subject thereto shall, unless the U.S. Sub-Plan shall have been terminated, continue to be available under the U.S. Sub-Plan for issuance pursuant to future Options.  In addition, any Shares which are retained by the Company upon exercise of an Option in order to satisfy the exercise or purchase price for such Option or any withholding taxes due with respect to such Option shall be treated as not issued and shall continue to be available under the U.S. Sub-Plan for issuance pursuant to future Options.  Shares issued under the U.S. Sub-Plan and later forfeited to the Company due to the failure to vest or repurchased by the Company at the original purchase price paid to the Company for the Shares shall again be available for future grant under the U.S. Sub-Plan.  Notwithstanding the foregoing, subject to the provisions of Section 8 below, in no event shall the maximum aggregate number of Shares that may be issued under the U.S. Sub-Plan pursuant to Incentive Stock Options exceed the number set forth in the first sentence of this Section 4 plus, to the extent allowable under Section 422 of the Code and the Treasury Regulations promulgated thereunder, any Shares that again become available for issuance pursuant to the remaining provisions of this Section 4.

 

 

5.             Administration of the U.S. Sub-Plan.

 

(a)           General. The U.S. Sub-Plan shall be administered by the Board, a Committee appointed by the Board, or any combination thereof, as determined by the Board in compliance with Applicable Laws, including (if applicable), Rule 16b-3 promulgated under the Exchange Act.

 

(b)           Additional Powers of the Administrator. Subject to the provisions of the U.S. Sub-Plan, in addition to the powers provided in the Plan, the Administrator shall have the authority, in its sole discretion:

 

(i)             To determine Fair Market Value in accordance with Section 2(l) above.

 

(ii)            To allocate Options.

 

(iii)           To approve Option Agreements (and forms of Option Agreements) to be used under the U.S. Sub-Plan.

 

(iv)           To prescribe, amend or rescind rules and regulations relating to the U.S. Sub-Plan, including adopting addenda to the U.S. Sub-Plan, as it may consider necessary or appropriate for the purpose of granting Options to U.S. Offerees, which Options may contain such terms and conditions as the Administrator deems necessary or appropriate to accommodate differences in local law, tax policy or custom (including those applicable U.S. Offerees who do not reside in the United States), which may deviate from the terms and conditions set forth in this U.S. Sub-Plan. Such rules and regulations shall supersede the terms of the U.S. Sub-Plan to the extent necessary to accommodate such differences but shall not otherwise affect the terms of the U.S. Sub-Plan as in effect for any other purpose.

 

(v)            To correct any defect, supply any omission or reconcile any inconsistency in Plan, the U.S. Sub-Plan and any Option Agreement.

 

(vi)           To amend any outstanding Option, Option Agreement or agreement related to any Conversion Shares, provided that no amendment shall be made that would materially and adversely affect the rights of any U.S. Offeree without his or her consent, unless otherwise required by Applicable Laws.

 

(vii)         To grant more than one Option to an U.S. Offeree and to allow an Option to be partially exercised, in each case without the cancellation of the prior Option allocation or requiring a new Option Agreement to be entered into.

 

(viii)        To construe and interpret the terms of the U.S. Sub-Plan, any Option Agreement, and any agreement related to any Conversion Shares, which constructions, interpretations and decisions shall be final and binding on all U.S. Offerees.

 

6.             Options.

 

(a)           Type of Option; Eligibility. Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. Nonstatutory Stock Options may be granted to U.S. Offerees who are Employees and Officers. Incentive Stock Options may only be granted to U.S. Offerees who are Employees of the Company, a Parent or a Subsidiary.

 

 

(b)           Term of Option. The term of each Option shall be the term stated in the Option Agreement; provided that the term shall be no more than 10 years from the date of grant thereof or such shorter term as may be provided in the Option Agreement and provided further that, in the case of an Incentive Stock Option granted to a person who at the time of such grant is a Ten Percent Holder, the term of the Option shall be 5 years from the date of grant thereof or such shorter term as may be provided in the Option Agreement. The “date of grant” of an Option is the date on which the Administrator effectively grants the Option, or such other date the Administrator determines.

 

(c)           Exercise Price. The per Share “exercise price” (i.e. the Conversion Price) for the Shares to be issued pursuant to the exercise of an Option shall be such price as is determined by the Administrator and set forth in the Option Agreement, but shall be subject to the following:

 

(i)             In the case of an Incentive Stock Option:

 

(A)              Granted to an Employee who at the time of grant is a Ten Percent Holder, the per Share exercise price shall be no less than 110% of the Fair Market Value on the date of grant.

 

(B)              Granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value on the date of grant.

 

(ii)            Except as provided in subsection (iii) below, in the case of a Nonstatutory Stock Option, the per Share exercise price shall be such price as is determined by the Administrator, provided that, if the per Share exercise price is less than 100% of the Fair Market Value on the date of grant, it shall otherwise comply with all Applicable Laws, including Section 409A of the Code.

 

(d)           Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above pursuant to a merger or other corporate transaction.

 

(e)           Procedures and Requirements for Exercise. Notwithstanding the foregoing and below, the exercise of the Options under the U.S. Sub-Plan and the Plan will generally be executed in accordance with a net-exercise mechanism, according to which the exercise of the Options into cash denominated in new Israeli Shekel (ILS) equivalent in value to shares shall be performed through a cashless exercise mechanism, as detailed under the Option Agreement. An Option shall be exercised in such manner and in accordance with such terms and conditions as provided in the Plan, this U.S. Sub-Plan and the Option Agreement. Notwithstanding any other provision of the U.S. Sub-Plan or any agreement entered into by the Company pursuant to the U.S. Sub-Plan, the Company shall not be obligated, and shall have no liability for failure, to issue or deliver any Conversion Shares under the U.S. Sub-Plan unless such issuance or delivery would comply with the Plan, the U.S. Sub-Plan, the Option Agreement, Company policies and Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel.

 

(f)            Permissible Consideration. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator in accordance with Applicable Laws (and, in the case of an Incentive Stock Option and to the extent otherwise required by Applicable Laws, shall be determined at the time of grant).

 

 

(g)           Incentive Stock Options.

 

(i)             USD $100,000 Limitation. Notwithstanding any designation under Section 6(a) above, to the extent that the aggregate Fair Market Value of Shares with respect to which Options designated as Incentive Stock Options are exercisable for the first time by any U.S. Offeree during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds USD $100,000, such excess options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(f), Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares subject to an Incentive Stock Option shall be determined as of the date of the grant of such option.

 

(ii)            Non-Transferability. Incentive Stock Options may not be sold, pledged, encumbered, assigned, hypothecated, or disposed of or otherwise transferred in any manner other than by will or by the laws of descent or distribution. The designation of a beneficiary (if such designation is permitted by the Administrator) by a U.S. Offeree will not constitute a transfer. An Option may be exercised during the lifetime of an U.S. Offeree, only by such U.S. Offeree.

 

(iii)            Post-Termination Exercises. To the extent that an Option is otherwise treated as an Incentive Stock Option, and despite anything to the contrary in the Plan, to retain treatment as an Incentive Stock Option, the Option must be exercised within three (3) months after an U.S. Offeree’s Termination of Employment, unless such Termination of Employment is due to the U.S. Offeree’s death or Disability, in which case the Option must be exercised within twelve (12) months after such Termination of Employment. In the event of an U.S. Offeree’s death within 3 months following the U.S. Offeree’s Termination of Employment, to retain treatment as an Incentive Stock Option, the Option must be exercised within twelve (12) months following such date of death.

 

7.             Taxes.

 

(a)           Withholding Requirements. Prior to the delivery of any Conversion Shares pursuant to the exercise of an Option or prior to any time the Option or Conversion Shares are subject to Tax-Related Items, the Company and/or the Related Company who is the U.S. Offeree’s employer will have the power and the right to deduct or withhold, or require an U.S. Offeree to remit to the Company or a Related Company, an amount sufficient to satisfy any Tax-Related Items or other items required to be withheld or deducted or are otherwise applicable with respect to such Option or Conversion Shares. The Company shall not be required to issue any Conversion Shares under the U.S. Sub-Plan until such obligations are satisfied.

 

(b)            Payment of Tax-Related Items. The Administrator, in its sole discretion and pursuant to such procedures as it may specify, may permit an U.S. Offeree (or in the case of the U.S. Offeree’s death, the person holding or exercising the Option) to satisfy all or part of his or her Tax-Related Items by such methods as are determined by the Administrator in accordance with Applicable Laws, the Plan, the U.S. Sub-Plan and specified in the Option Agreement (and, in the case of an Incentive Stock Option and to the extent otherwise required by Applicable Laws, as shall be determined at the time of grant). The Fair Market Value of the Shares to be withheld or delivered will be determined based on such methodology that the Company deems to be reasonable and in accordance with Applicable Laws. Any payment of taxes by surrendering Shares to the Company may be subject to restrictions of Applicable Laws, including, but not limited to, any restrictions required by rules of the United States Securities and Exchange Commission.

 

(c)            Compliance With Section 409A of the Code. Except as otherwise specifically determined in the sole discretion of the Administrator, Options will be designed and operated in such a manner that they are either exempt from the application of, or comply with, the requirements of Section 409A of the Code such that the grant and exercise will not be subject to the additional tax or interest applicable under Section 409A of the Code. The U.S. Sub-Plan and each Option and Option Agreement under the U.S. Sub-Plan are intended to meet the requirements of Section 409A of the Code (or an exemption therefrom) and will be construed and interpreted in accordance with such intent. To the extent that the grant of an Option or the exercise thereof, is subject to Section 409A of the Code, the Option will be granted, exercised or otherwise administered in such a manner that will meet the requirements of Section 409A of the Code (or an exemption therefrom), such that the grant, exercise or administration will not be subject to the additional tax or interest applicable under Section 409A of the Code. In no event will the Company or any Related Company be responsible for or reimburse an U.S. Offeree for any taxes, interest or other penalties incurred as a result of applicable of Section 409A of the Code or any state law of similar effect.

 

 

8.             Adjustments Upon Changes in Capitalization. Notwithstanding any provision of the Plan, including section 8 of the Plan, no adjustment shall be made (including adjustment for dividends, bonus shares or other rights for which the record date is earlier than the date the Option has been exercised) to the terms or conditions of an Option under the terms of the Plan unless the adjustment would not otherwise cause adverse tax consequences to the Offeree under Section 409A of the Code.

 

9.             Amendment and Termination of the U.S. Sub-Plan. The Board may at any time amend or terminate the U.S. Sub-Plan, but no amendment or termination shall be made that would materially and adversely affect the rights of any U.S. Offeree under any outstanding Option without his or her consent, unless otherwise required by Applicable Laws. In addition, to the extent necessary and desirable to comply with Applicable Laws, the Company shall obtain approval of holders of capital shares with respect to any U.S. Sub-Plan amendment in such a manner and to such a degree as is required under Applicable Laws. Termination of the U.S. Sub-Plan will not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Options granted under the U.S. Sub-Plan prior to the date of such termination.

 

10.           Conditions Upon Issuance of Shares. As a condition to the vesting or exercise of an Option or the issuance of the Conversion Shares, the Company may require the U.S. Offeree to make certain representations and agreements at the time such vesting, exercise or issuance (including agreements to delay the exercise of an Option), that such U.S. Offeree is in compliance with the terms and conditions of the U.S. Sub-Plan, the Plan, the Option Agreement, the Company’s policies and/or Applicable Laws or to ensure such compliance. Notwithstanding any other provision of the U.S. Sub-Plan or any agreement entered into by the Company pursuant to the U.S. Sub-Plan, the Company shall not be obligated, and shall have no liability for failure, to issue or deliver any Shares under the U.S. Sub-Plan unless such issuance or delivery would comply with such terms and conditions, policies and Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority will not have been obtained.

 

11.           Approvals and Information to U.S. Offerees. To the extent necessary and desirable to comply with Applicable Laws, the Company shall obtain any approvals and provide any such additional information to U.S. Offerees in such a manner and to such a degree as required by Applicable Laws. In the event the Company is relying on the exemption provided by Rule 12h-1(f) under the Exchange Act, the Company shall provide the information described in Rule 701(e)(3), (4) and (5) of the Securities Act, to all holders of Options in accordance with the requirements thereunder until such time as the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. The Company may request that holders of Options agree to keep the information to be provided pursuant to this Section confidential. If the holder does not agree to keep the information to be provided pursuant to this Section confidential, then the Company will not be required to provide the information unless otherwise required pursuant to Rule 12h-1(f)(1) of the Exchange Act.

 

 

CALIFORNIA ADDENDUM

 

U.S. Sub-Plan

 

(California Offerees)

 

This California Addendum applies to U.S. Offerees whose Option and/or Conversion Shares are issued in reliance on Section 25102(o) of the California Corporations Code (“California Offerees”). Terms used herein but not otherwise defined shall have the respective meanings assigned to them in the U.S. Sub-Plan.

 

1.             Notwithstanding anything stated to the contrary, the grant of the Option, the exercise of an Option and the issuance of Conversion Shares to a California Offeree must be exempt from registration under the Securities Act pursuant to Rule 701 promulgated under the Securities Act (“Rule 701”).

 

2.             The following rules shall apply to an Option in the event of a California Offeree’s Termination of Employment:

 

(a)           If such Termination of Employment was for reasons other than death, “Permanent Disability” (as defined below), or Cause, the California Offeree shall have at least 30 days after the Date of Termination of Employment to exercise his or her Option to the extent the California Offeree is entitled to exercise the Option on his or her Date of Termination of Employment, provided that in no event shall the Option be exercisable after the expiration of the term as set forth in the Option Agreement.

 

(b)           If such termination was due to death or Permanent Disability, the California Offeree shall have at least 6 months after the Date of Termination of Employment to exercise his or her Option to the extent the California Offeree is entitled to exercise the Option on his or her Date of Termination of Employment, provided that in no event shall the Option be exercisable after the expiration of the term as set forth in the Option Agreement.

 

“Permanent Disability” for purposes of this California Addendum shall mean the inability of the California Offeree, in the opinion of a qualified physician acceptable to the Company, to perform the major duties of the California Offeree’s position with the Company or Related Company because of the sickness or injury of the California Offeree.

 

3.             Notwithstanding anything to the contrary in Section 8 of the U.S. Sub-Plan, the Administrator shall in any event make such adjustments as may be required by Section 25102(o) of the California Corporations Code.

 

4.             Notwithstanding anything to the contrary, no Option shall be exercisable on or after the 10th anniversary of the date of grant and any Option Agreement shall terminate on or before the 10th anniversary of the date of grant.

 

5.             Notwithstanding anything stated to the contrary, no Option may not be sold, pledged, encumbered, assigned, hypothecated, or disposed of or otherwise transferred in any manner other than by will or by the laws of descent or distribution, to a revocable trust, or as permitted by Rule 701.

 

6.             Notwithstanding anything stated to the contrary, the U.S. Sub-Plan must be approved by a majority of the outstanding securities entitled to vote of the Company by the later of (a) within twelve (12) months before and after the U.S. Sub-Plan is adopted by the Board, or (b) prior to or within twelve (12) months of the granting of options or issuance of securities in California (under all Company plans and agreements) to greater than 35 California Offerees.

 

 

 

Exhibit 10.5

 

 

 

Enlight Renewable Energy Ltd.

 

Office Holder Compensation Policy

 

August 2021

 

  

Enlight Renewable Energy Ltd. (hereinafter - the “Company”)

 

Office Holder Compensation Policy

 

1.

Overview

 

1.1.

A compensation policy (hereinafter - the “Compensation Policy”), as defined in the Companies Law, 1999 (hereinafter - the “Companies Law” or the “Law”), is a policy regarding the terms of office and employment (as such terms are defined in the Companies Law from time to time) of the Company’s office holders.

 

1.2.

Among other things, the Compensation Policy is based on the provisions of Amendment 20 to the Law, relating to compensation policies for public company office holders.

 

1.3.

The Compensation Policy takes under consideration the Company’s characteristics, business strategy, objectives, area of activity, and the Company’s interest in recruiting and retaining highly qualified office holders.

 

1.4.

Before its re-approval, the Compensation Policy and its various components were discussed at Compensation Committee meetings, with the advice of professional advisors of the Company, and after discussions during which committee members made comments, asked questions and received answers from the Company’s management and its professional advisors on various issues concerning the Compensation Policy, the Compensation Committee recommended to the Company’s Board of Directors to approve the Compensation Policy. The Company’s Board of Directors approved the Compensation Policy, having considered and delibrated the Compensation Committee’s recommendation. The Compensation Policy is subject to the approval of the Company’s shareholders at a general meeting, as set forth in Section 267A of the Companies Law.

 

1.5.

The Compensation Policy sets forth a ceiling for the Company office holders’ terms of office and employment. The policy is declarative and does not establish any liability of the Company toward its office holders. The Company is not obligated to grant the office holders any or all of the components included in the policy, in whole or in part, and the policy does not entitle the office holders to any rights, whether directly or indirectly. The Company will only be bound by the employment agreements entered into between it and its office holders.

 

2.

Objectives of the Compensation Policy

 

2.1.

The Company acknowledges the vital importance of the human element in all Company ranks, and particularly its executive rank. Hence, the Company considers it very important to establish a suitable and appropriate compensation policy for Company office holders, including by creating the right incentives to promote the Company’s short-term and long-term goals, its work plans, and its policy, taking into consideration, among other things, the office holders’ areas of responsibility and the risks that affect the Company’s activity.

 

2.2.

The Company has adopted the Compensation Policy pursuant to the following objectives:

 

2.2.1.

Helping to achieve the Company’s goals and work plans in the long-term, and make sure that the Company office holders’ interests, are, subject to any applicable law, identical to and reflect those of the Company shareholders, to the extent possible.

 

2.2.2.

Increasing the Company office holders’ sense of identification with the Company and its activity by implementing a program intended to ensure that the Company’s success entails, inter alia, each office holder’s individual success.

 

2.2.3.

Raising the Company office holders’ satisfaction and motivation to promote the Company’s affairs and further its business capabilities.

 

2.2.4.

Recruiting and retaining high-quality Company office holders for the long-term.

 

  

3.

The Considerations and Guidelines in Setting the Compensation Policy

 

3.1.

In setting the Compensation Policy, the Company considered the considerations set forth in Section 267B(A) of the Companies Law, including:

 

3.1.1.

Promoting the Company’s long-term goals, work plans, and policy.

 

3.1.2.

Creating suitable incentives for the Company’s office holders, taking into consideration, among other things, the Company’s risk management policy;

 

3.1.3.

The office holders’ high level of responsibility and the complexity of the office holders’ duties.

 

3.1.4.

The Company’s size, profitability, and the nature of its operations.

 

3.1.5.

Regarding terms of office and employment that include variable components – the office holder’s contribution to achieving the Company’s goals and maximizing its profits over the long-term, and the office holder’s role in the Company.

 

3.2.

Additionally, when determining the terms of the office holders’ compensation, the Compensation Committee and Board of Directors may set relevant criteria in addition to the guidelines and considerations set forth and required under the Companies Law, and may consider data in addition to the data set forth below in light of the Company’s best interest, condition, and plans.

 

4.

Main Principles of the Compensation Policy

 

4.1.

Compensation components

 

The aggregate compensation for Company office holders includes the following components:

 

4.1.1.

Base wage or salary – for details, see Section 6 below.

 

4.1.2.

Fringe social benefits and other benefits – for details, see Section 10 below.

 

4.1.3.

Variable compensation:

 

(a)

An annual cash bonus – for details, see Section 7 below.

 

(b)

A retention bonus – for details, see Section 8 below.

 

(c)

A sale or merger bonus – for details, see Section 9 below.

 

(d)

Equity compensation – for details, see Section 10 below.

 

(e)

End of service terms – severance exceeding the ceiling set forth in the Law, an adjustment period, advance notice or any other benefit granted to office holders in connection with the end of their roles with the Company.

 

4.2.

Definitions:

 

4.2.1.

The “Base Wage” or “Salary”: the gross monthly wage.

 

4.2.2.

The “Fixed Compensation” or “Wage Cost”: the Base Wage, plus social benefits and other benefits, in terms of cost to the Company.

 

4.2.3.

“Variable Compensation”: the variable compensation in cash and the variable equity compensation.

 

4.2.4.

The “Compensation Package”: the total cost of the compensation in terms of employment cost, including the Wage Cost and bonuses.

 

4.2.5.

“Office holder” - as defined by the Companies Law (i.e., CEO, main business manager, deputy CEO, VP, CFO, and any other office holder in the Company irrespective of their title, as well as a director or manager who reports directly to the CEO).

 

 

5.

Manner of Determining Compensation

 

When reviewing and approving an office holder’s terms of office and employment, the Compensation Committee and Board of Directors will consider the following (in whole or in part, based on relevance):

 

5.1.

All compensation components, including the monthly salary, related benefits, retirement bonuses (as the term is defined in the Law from time to time), and any benefit, payment, or payment commitment or commitments to grant such a benefit, as applicable, granted for such employment or appointment.

 

5.2.

The economic value of the entire compensation package and all its components, while taking into consideration the Company’s business results, and, if the compensation package is tied to certain objectives, examining such objectives.

 

5.3.

To the extent possible, the compensation components will be challenging, but will not encourage taking risks exceeding the Company’s desired risk levels.

 

5.4.

To ensure congruence between the overall compensation components set forth in the policy, Company organs  will be presented with, and will discuss the approval of, all compensation components of each Company office holder. Additionally, the wage ranges and the other terms of office and employment for Company office holders will be determined, inter alia, according to the comparable data for office holders in companies that are similar to the Company, to the extent possible, as set forth below (hereinafter, the “Peer Company Data”). The Peer Company Data will relate to the components of the office and employment terms, to the extent possible and to the extent the information is available.

 

5.5.

The Peer Company Data will be prepared by the Company or by an external consultant, which decision will be in the Compensation Committee’s discretion, based on a methodology that the Company considers appropriate and reasonable. Additionally, the Peer Company Data will be prepared separately for the base salary and for the aggregate compensation, to the extent relevant and if such information is available. In such review, the Company’s performance will also be taken into consideration, so that the relationship between the Company’s performance and its relative position among the companies to which it is being compared will be reviewed, based on predetermined parameters.

 

5.6.

The comparison will be carried out with respect to compensation granted to office holders holding a similar position in at least 3 publicly traded companies and/or private companies that have the following characteristics (in whole or in part, or additional criteria as the Compensation Committee finds suitable): (a) their equity is similar to the Company’s equity; (b) their operating profit is comparable to the Company’s operating profit; (c) their total assets are similar to the Company’s total assets; (d) they have a similar turnover; (e) their market value is similar to the Company’s market value; and (f) they are in the same area of activity as the Company.

 

5.7.

The office holder’s education, skills, expertise, professional experience, work and contribution to achieving the Company’s business goals and meeting its work plans (in such office holder’s current or previous position).

 

5.8.

The office holder’s role, areas of responsibility, and previous wage agreements. Additionally, as relevant, the comparable data regarding the Company’s previous or present office holders in the same position or in similar positions will be taken into consideration, with respect to all components of the office and employment terms. Also, and to the extent relevant, any substantial changes that occurred in the office holder’s authorities and areas of responsibility during the year will be considered.

 

 

5.9.

The ratio of the office holders’ terms of office and employment, and the wages1 paid to all other Company employees and contractors employed by the Company (as these terms are defined in the Law from time to time), and in particular, the ratio to these employees’ mean and median wages, and the effect of the gaps in such wage data on labor relations within the Company.

 

5.10.

The Compensation Committee and the Board of Directors will review the above ratio and note if they believe the ratio is appropriate and suitable considering, among other things, the Company’s nature, size, staff composition and area of activity, and if these ratios might adversely affect labor relations within the Company.

 

5.11.

As of the date of this Compensation Policy’s adoption, the ratio between the different Base Wages of office holders in the Company Base Wages and all other Company employees’ mean and median wages, and the ratio between the office and employment terms (Wage Cost plus bonuses) for each Company office holder and the mean and median Wage Cost for all other Company employees are as follows:

 

Job title		The ratio of the Base Wages to the mean salary				The ratio of the Base Wages to the median salary				The ratio of the office holders’ Wage Cost, including bonuses and options, to the average Wage Cost in the Company				The ratio of the Wage Cost, including bonuses and options for Company office holders to the Company’s median Wage Cost
The Company’s CEO			3.15				3.21				7.45				9.28
Chief Financial Officer			2.04				2.11				3.02				4.02
VP Engineering and Contracting			2.18				2.26				3.91				5.13
VP Business Development			2.30				2.37				5.05				6.51
VP Development in Israel			1.80				1.87				2.37				3.18
VP Regulation and Community Relations			1.74				1.81				1.95				2.64
VP Operations			1.67				1.74				1.56				2.13
VP Global Development			1.71				1.78				3.12				4.03

 

To calculate the cost ratios, strict ratios were taken into consideration, while taking into consideration the monthly salary and related costs, bonuses (assuming that targets are fully met) and the cost of options in the coming year, etc. With respect to the other employees of the Company, the aggregate employment cost and related benefits were taken into consideration, excluding bonuses and/or costs of option grants.

 

The Compensation Committee and Board of Directors estimate that these ratios are appropriate and reasonable in light of the Company’s characteristics, and they will not adversely affect labor relations within the Company².

 

Given that the Company is growing, members of the Compensation Committee and

 

1	“Wages” – as this term is defined in the Companies Law from time to time; at present, the income for which national insurance premiums are paid under Chapter 15 of the National Insurance Law [Combined Version], 1995.

 

2	The maximum ratios consider the equity compensation made to the Company officers.

  

 

Board of Directors in the Company believe that the Company should have, on the one hand, determined reasonable and appropriate salary ratios between the office holders and all Company employees, and on the other hand, determined salary ratios that match the nature of the Company’s operations and advanced growth. Due to the growth in the Company’s activity and staff number from year to year, it is clear that shifts in the Company’s staff number may have a material effect on salary ratios, without diminishing the Company employees’ motivation and sense of identification with its activity and operations.

 

In light of the above, the Company’s Compensation Committee and Board of Directors determined that the above salary ratios will be deemed reasonable if they do not exceed 3.5 times the above-described ratios (and the maximum ratios for new office holders will be examined based on the above-described CFO’s ratios). Any deviation from the above will be brought before the Compensation Committee and Board of Directors for renewed discussion and a determination as to whether such deviation requires any changes, and the Company will disclose material deviations. The Compensation Committee and Board of Directors believe this maximum ratio is reasonable and fair in light of the Company’s character, its area of activity and its size during this policy’s applicability period, and consequently, the extent of responsibility imposed on the Company’s senior office holders.

 

5.12.

The ratio of the variable components to the fixed components granted to the office holder.   The desired ratio between the variable components and the fixed components granted to different Company office holders in a given year will be as follows:3

  

Job title		Fixed components (including related benefits) (%)		Variable benefits (bonuses and options) (%)
The Company’s CEO		20%-60%		40%-80%
VP Engineering and Contracting; VP Business Development, Marketing and Sales;		20%-65%		35%-80%
Other VPs		25%-70%		30%-75%

 

This refers only to the planned ratio, assuming bonuses are granted as set forth in this policy. The actual ratio in a given year between the compensation package components might be different because of underperformance or overperformance, which may affect the variable compensation, as set forth in this policy. In addition, due to the unique character of the Company’s activity and the importance of retaining its many fixed work interfaces, the Company considers it important to reinforce the fixed office holder compensation components, and accordingly, the above ratios were determined as part of the overall considerations.

 

If the Company deviates from the above ratio by more than 5% from the above-described gaps (i.e., a 7% deviation from the upper limit or a 5% deviation from the lower limit), then such deviation will be brought before the Compensation Committee and Board of Directors for further discussion and a determination as to whether such deviation requires any changes, and the Company will disclose material deviations. The Company organs deemed deviations within these limits as reasonable.

 

3

We emphasize that this refers only to the planned ratio, assuming bonuses are made as stated in this policy. The actual ratio in a given year between the compensation package components might be different because of underperformance or over-performance, that might affect the variable compensation, as stated in this policy.

 

 

6.

Basic salary

 

The salary of an office holder is a fixed component, determined (to the extent possible) by the day their employment term commences, and will be revised from time to time according to the Compensation Policy.

 

6.1.

The CEO and the Office Holders’ Salaries

 

6.1.1.

The Company’s CEO and other office holders’ salaries will be determined based on the relevant considerations and criteria appearing in Sections 2, 3, and 5 above, and will be approved by the Company’s competent organs , according to the applicable law.

 

Based on these considerations, the Company office holders’ highest monthly Base Wages were determined, as set forth below⁴:

 

Job title		Maximum (in NIS) (gross)
The Company’s CEO5			118,000
VP Engineering and Operation; VP of Business Development, Marketing and Sales;			80,000
Other VPs			65,000

 

The Compensation Committee and Board of Directors will review such highest monthly Base Wages as part of the annual review of the Compensation Policy under Section 16 below, and these will be updated to the extent necessary, including in comparison with the Peer Company Data and taking into consideration the Company’s business position and its staff, or other considerations.

 

If the Company deviates from the above by more than 5%, such deviation will be brought before the Compensation Committee and Board of Directors for further discussion and a determination as to whether any changes are required, and the Company will disclose such material deviations. The Company organs  considered any deviation within the above set forth limits as reasonable.

 

6.2.

Compensation of directors

 

6.2.1.

The Company directors (outside directors and otherwise6) will be paid an annual compensation, a participation compensation, and reimbursement of expenses according to the provisions of the Companies Regulations (Outside Director Compensation and Expenses Rules), 2000 (hereinafter, the “Compensation Regulations”), based on the Company’s classification according to such regulations. The wages determined may not exceed the maximum compensation permitted under the Compensation Regulations.

 

4

To clarify, the Company may enter into management agreements with the officers’ wholly owned companies, and all provisions of this Compensation Policy also apply to them. The management fee will be governed by the provisions that apply to the monthly salary, and the maximum management fees will be equal to the maximum employment cost assuming labor relations.

 

5	The maximum value of the CEO’s compensation package may not exceed NIS 8 million a year, and the calculation of the options’ value will be made for the award date, linearly over the vesting period.

 

 

6.2.2.

The amounts will be paid plus linkage differentials, as set forth in Regulation 8 of the Compensation Regulations, and will be updated from time to time as set forth in the Compensation Regulations.

 

6.2.3.

The foregoing notwithstanding, a director’s (not including an outside director and/or an independent director) non-acceptance or waiver of the compensation that they are entitled to according to the Compensation Regulations will not be deemed a deviation from this policy.

 

6.2.4.

The Company may grant the Chairman of its Board of Directors compensation that may not exceed NIS 60,000 a month (payable through an invoice), plus an equity component according to the standards set forth in this policy.7

 

7.

Annual Cash Bonus

 

7.1.

The Company’s Compensation Policy is based, among other things, on the assumption that the Company office holders’ compensation must be tied to the Company’s business results8 and reflect the Company’s various strategic goals and each office holders’ personal contribution to achieving such goals.

 

7.2.

This bonus is intended to compensate the office holders for their accomplishments and contributions to achieving the Company’s goals throughout the period for which the bonus is paid.

 

7.3.

The Company's office holders will be entitled to an annual performance-based bonus contingent on meeting certain goals. Eligibility for the bonus will be determined mainly on measurable quantitative criteria, however, eligibility may also be partly determined by qualitative criteria that is not measurable. The structure of the goals and weights attributed will be determined by the Compensation Committee and the Board of Directors every year in advance, no later than the end of March of that year. The goals and weights attributed will be structured individually and separately for each of the Company's office holders.

 

7.4.

The amount of the bonus to be distributed each year will be based on the extent to which goals are achieved, as set out below.

 

7.4.1.

Bonus structure - the bonus will be composed of three components:

  

	a.	Based on Company goals	-	Goals applicable to the bonus plans for all the Company's office holders in a particular year, including the Company's CEO.
	b.	Based on personal goals	-	Targets suited to the role of the applicable office holder and the targets and specific matters that the Company wishes to advance that year.
	c.	Discretionary bonus component	-	The Company’s office holders will be entitled to a bonus component that is not measurable, based on a qualitative evaluation of their performance by their supervising office holder.

  

7	The above is a payment for a 33% appointment percentage, and it will be adapted proportionally based on an increase or a decrease in the appointment percentage.

 

8	The Company’s outcomes will be according to the Company’s audited financial statements.

  

 

7.4.2.

As part of the annual bonus component that is based on the Company’s goals, two or more Company goals will be determined, which will be measurable quantitative goals that are contingent on achievement of the Company's long-term business goals and objectives, including the following:

 

a.

The volume of new transactions closed, according to megawatt parameters or equivalent parameters based on the relevant activity segment;

 

b.

Average economic internal rate of return (EIRR);

 

c.

Periodic profitability rates (operating profit and/or net profit);

 

d.

Operating profit parameters (EBITDA, FFO);

 

e.

Rates of growth in the volume of activities;

 

f.

Achieving project performance indicators. (1) Meeting the construction/development schedule - the compensation rate in respect of this component will be gradual with several “grades” determined in the timetable, and the rate will increase with the grades in a manner that is incentivizing; (2) Achieving savings in construction budgets - the compensation rate in respect of this component will be determined on a graded basis while establishing a number of quantitative financial thresholds reflecting savings in the project budget, and each threshold will be awarded a different compensation rate, in an ascending grade; (3) Implementation of advanced management tools, processes, and control to be defined by the Company’s Compensation Committee and Board of Directors individually and their proper implementation will be as meeting this target;

 

g.

Goals referring to improvement in the price of the Company's shares or referring to the trading volume of the shares and the identity of the shareholders;

 

h.

Capital raising, debt cycle, and/or capital structure improvement goals;

 

i.

Goals referring to organizational development;

 

j.

The Company's Board of Directors may determine specific compensation goals for office holders (by March of each year), the achievement of which the Board of Directors believes will serve as a strategic goal for the Company and/or a milestone that is a substantial leap forward in achieving the Company's strategy in one of the following areas of activity: (i) achieving a significant milestone (such as signing financing agreements, financial closing or commercial operation or obtaining other material approvals for a project) in a transaction and/or a specific project, which are material to the Company (based on standard accounting tests); (ii) mergers and acquisitions of renewable energy projects and/or renewable energy companies; (iii) raising capital for the Company's activities, when achieving this goal in a number of salaries to be defined as a success-based bonus contingent on a minimum rate of amounts successfully raised to be determined by the Company’s Compensation Committee and Board of Directors; (iv) winning a tender for a substantial project (based on standard accounting tests); and (v) developing entry into new areas of activity.

 

Such goals will be based on the Company's strategy as reflected in the annual budget determined and approved annually by the Company’s Compensation Committee and Board of Directors (no later than the end of March of that year) (hereinafter,the “Annual Budget"), and will be adjusted to the Company's performance in the year with respect to which the bonus is paid. For the Company’s CEO, only Company goals can be determined. If required by applicable law, for certain office holders or certain types of goals, the goals will also be approved by the general meeting.

 

 

7.4.3.

In addition, up to five measurable personal goals will be determined for each office holder, to be determined individually, based on the office holder's position and contribution to the Company's business and based on the Company's long-term strategic work plan and the work plans of the department to which the office holder belongs. These goals may include, for example:

 

a.

Contribution to the achievement of strategic targets set for the office holders in their area of activity;

 

b.

An indicator of completing milestones in significant projects and/or in the development, licensing, and planning process of significant projects;

 

c.

Signing agreements and transactions in the Company’s area of activity, based on indicators and volume to be defined annually;

 

d.

Achieving regulatory goals, regulatory milestones, and goals that are related to the Company's regulatory interfaces;

 

e.

Contribution to the signing of financing agreements, such as senior debt and/or mezzanine debt transactions for the purpose of starting projects, investing in projects, or acquiring activities;

 

f.

Achieving savings goals in project construction budgets, as well as in operating, maintenance, and/or development expenses;

 

g.

Achieving goals in the sale and disposal of the Company's profitable assets;

 

h.

Achieving goals related to characterization and implementation of management and control tools, and improving the Company's management and control processes;

 

i.

In addition, office holders involved in development and/or regulation may also be entitled to specific bonuses for full or partial completion of complex processes developed by the Company, based on milestones to be determined by the Company (hereinafter, “Development Bonuses").

 

The internal division between the relative weight attributed to the quantitative estimates based on Company goals and the personal quantitative goals will be adjusted individually for each office holder, based on the characteristics of their position, areas of responsibility, and the extent of their influence on the achievement of the Company's goals and its profits.

 

7.4.4.

The weight attributed to the personal goals of each VP will be between 20% and 60% of all the goals for office holders (not including the Development Bonuses). In addition, if an office holder does not reach the minimum threshold of any of the personal goals, such officer holder will not be entitled to a bonus in that year, even if the Company/Group achieves its goals.

 

7.4.5.

The discretionary bonus component will be based on the evaluation of the Board of Directors. The weight attributed to this goal will not exceed 20%.  It is clarified that, subject to applicable law, the Board of Directors, at the recommendation of the Compensation Committee, may increase the discretionary component of the annual bonus for office holders reporting directly to the CEO and also determine that this will be the only component for calculating the performance-based bonus for the relevant office holder.

 

7.4.6.

In addition to the annual bonus described above, the Board of Directors may, after receiving the recommendation of the Compensation Committee and without requiring any other approvals, decide that the Company will pay any of the office holders (who report directly to the CEO) a bonus for special projects or special achievements, arising from the activities of the office holders and their contribution to the Company, based on the Company's long-term strategic work plan (in this Section 7.4.6, this includes achieving material strategic goals and signing strategic agreements that are material to the Company's activities, such as: (i) a merger and/or acquisition of an activity on a material scale (exceeding 20% of Group  assets and/or its installed capacity and/or its equity); (ii) raising capital/debt in an amount exceeding NIS 350 million; (iii) winning and/or investing in and/or selling a project and/or reaching a significant milestone in a project of a substantial scope, which the Board of Directors considers an extraordinary achievement that may have a material effect on indicators in the Company's activity; and (iv) achieving an extraordinary performance indicator that is significantly higher (more than 15% in excess of the upper threshold deteremined by the Board of Directors for a specific annual goal in the goals set out in Sections 7.4.2-7.4.3 above, and as set out in Section 7.4.9 below (hereinafter,the “Special Bonus”).

 

 

7.4.7.

It is clarified that in any event, the Special Bonus will not exceed five monthly salaries for an office holder. It should be clarified that discretionary compensation for the CEO exceeding three monthly salaries  will be brought to the general meeting for approval. Notwithstanding the above, the portion of the discretionary components of the bonus component as set out in Section 7.4.5 above, may be higher, up to the maximum amount permitted by the Law, as may be the case from time to time.

 

7.4.8.

The Board of Directors will have discretion and flexibility in determining the weights and goals, and the weights and goals will be discussed annually as set out above, based on the recommendations of the Compensation Committee in the matter. For this matter, the Compensation Committee and the Board of Directors will take into consideration the recommendation of the Company’s CEO reagrding the goals and weights pertaining to the VPs and the recommendation of the Chairman of the Board of Directors regarding the goals and weights pertaining to the CEO.

 

7.4.9.

The provisions set out below will be used to determine the goals and assess whether they have been met:

 

§

Each goal will be assigned a relative weight that determines its importance and its weight in the determination of the bonus budget.

 

§

A quantitative target threshold (indicator) will be determined for each measurable target, to be derived from the work plan (budget) or directly from the area that requires change or improvement.

 

§

If the goal is a parameter included in or derived from the budget, the goal will be considered to have been met in full only if the quantitative target threshold set in or derived from the budget is met.

 

§

Each goal will receive a separate score indicating compliance with the goal and the bonus will be calculated pro rata to the relative weight of such goal.

 

§

A lower quantitative threshold will also be set for each goal. For performance below the lower threshold no bonus will be paid with respect to such specific target.

 

§

A bonus of 60% of the specific weight attributed to a specific goal will be granted for reaching the low threshold, and for performance exceeding this threshold, a bonus of between 60% and 100% will be granted, to be calculated on a linear basis (for the difference between the goal and the lower threshold). If the goal is met, a score of 100% will be given with respect to this indicator.

 

§

If goals are met at a rate of 90%-100%, such goals will be considered to have been fully met, subject to the discretion of the Compensation Committee and the Board of Directors regarding the implementation of this mechanism.

 

§

An upper threshold will be determined for each goal for performance that exceedsthe goal. If the upper threshold is reached or exceeded, a bonus of 125% of the specific weight attributed to said goal will be given, and for performance between the goal and the upper threshold, a bonus of between 100% and 125% will be given, to be calculated on a linear basis (linearly for the difference between the goal and the upper threshold).

 

 

7.5.

Notwithstanding the above, the Compensation Committee and the Board of Directors may, in individual cases, approve a discretionary bonus, subject to a limit of up to three monthly salaries , for personal achievements, specific achievements in the year or advancing of material/strategic matters, and/or may delegate their authority to do so, subject to the Law.

 

7.6.

Notwithstanding the above, an immaterial change in the terms of office and employment of an office holder reporting directly to the CEO of the Company will not require the approval of the Compensation Committee if the CEO has approved the change and all the following have been fulfilled:

 

7.6.1.

An immaterial change in the employment terms of an office holder as set out in Section 272(C) of the Law, not to exceed 5% per year, compared with the preceeding year, will be approved by the Company’s CEO and any other organ  of the Company that is required pursuant to the Law (based on the minimum required forum);

 

7.6.2.

The terms of office and employment are in accordance with the Company’s Compensation Policy.

 

7.7.

Annual bonus - general provisions

 

7.7.1.

Notwithstanding the provisions in this Section 7, the annual bonus will not be granted to any office holder who does not meet the minimum threshold, which will be determined every year with respect to each goal (lower threshold).

 

7.7.2.

If payment of bonuses results in providing grounds for immediate repayment of any series of debentures issued or to be issued by the Company.

 

7.7.3.

In the event that a term of office ends, the Board of Directors may grant an office holder, at its discretion and with reference to the circumstances of retirement, the annual bonus for the full year in which the term of office ended.

 

7.7.4.

Every year, upon approval of the bonuses plan, the Compensation Committee and Board of Directors may establish additional quantitative or other thresholds, taking into account the Company's targets, strategy and position, which, if fulfilled, annual bonuses will not be granted to any of the Company's office holders.

 

7.8.

Restrictions applicable to the annual bonus

 

In addition, annual bonuses, if granted, will be subject to the following restrictions:

 

7.8.1.

The total amount of the annual bonus (for all components of the annual/variable bonus, including the special bonus as defined above) will be limited as follows:

 

(a)

CEO: not to exceed 10 monthly salaries  (excluding the special bonus as set out in Section 7.4.6 above, excluding meeting excellence thresholds exceeding 100%).

 

(b)

Other office holders: not to exceed eight monthly salaries  (excluding the Special Bonus as set out in Section 7.4.6 above, excluding meeting excellence thresholds exceeding 100%).

 

(c)

Development bonuses: not to exceed four monthly salaries  per year (in addition to the above bonuses).

 

 

7.8.2.

The amount of the actual annual bonuses granted to all of the Company's office holders with respect to a specific year will not exceed 3% of the Company's revenues from the sale of electricity based on the fixed-assets model. In the event of deviations therefrom, the annual bonuses will be paid pari passu.

 

7.8.3.

An annual bonus will be granted to office holders who were employed by, or provided services to, the Company for at least 12 (twelve) months prior to the approval of the financial statements for that year, unless the office holder resigned or was dismissed due to circumstances that revoke such office holder’s right to severance pay. Notwithstanding the aforesaid, with respect to new office holders employed in the Company for less than 12 months, the Board of Directors may, at the recommendation of the Company's CEO, determine to grant a bonus in proportion to such office holders’ period of employment by the Company.

 

7.8.4.

The Compensation Committee may disregard effects of the Company's financial results arising from changes in the accounting policy of the Company or Group . Disregarding such effects may increase or decrease the bonus, depending on the type of accounting change and its effect. Disregarding such effects will be performed when, shortly before the approval of the bonuses, the Company’s independent auditors submit an opinion regarding the accounting changes made in the past financial year with respect to which bonus are determined, and the implications of these changes on the goals relevant to the bonuses. The opinion will be presented to the Compensation Committee and will serve as a basis for its decision regarding whether to disregard the implications of the accounting changes for the purpose of calculating the bonuses of the office holders.

 

It is clarified that the Compensation Committee will only exercise its powers under this section in the following cases: (a) a change in the accounting standards and/or the accounting policy and/or the accounting principles applicable to the financial statements of the Company and/or companies whose financial statements are consolidated and/or included in the financial statements of the Company (hereinafter,the "Statements"), which will apply due to external circumstances and which directly affect the calculation of the compensation goals established in the relevant year; and (b) application of an accounting principle and/or accounting policy to the Statements, in accordance with the guidelines of a competent authority, which have a direct effect on the calculation of the compensation goals established in the relevant year.

 

7.8.5.

When approving the budget, the Board of Directors may determine a closed list of extraordinary events and, if any of these events occurs during the year, the Compensation Committee may eliminate their effect when calculating the targets for the bonus. These are events that, when approving the budget, it is uncertain whether they will occur during the year and it was decided not to take them into account when preparing the budget; however, if they occur, they are likely to have a material effect on the financial results.

 

7.8.6.

The Compensation Committee and the Board of Directors may, at their discretion, reduce the amount of the bonus due to an office holder, when there are special circumstances that justify such a reduction.

 

7.8.7.

An office holder entitled to a bonus based on any financial information, will undertake to return to the Company any amounts paid on the basis of information that turned out to be erroneous and were restated in two consecutive annual financial statements following approval of the bonus in the Company's financial statements. An office holder will consent in writing to the Company’s deduction of any amount such office holder owes the Company from any amount due to such office holder from the Company, subject to the Law.

 

7.8.8.

The annual bonus, if determined, will be paid to office holders once a year, after the Company’s Board of Directors approves the financial statements of the relevant year and based on the Company's actual results for such year; if the annual bonus requires calculation, such calculation will be based on the financial statements of the relevant year.

 

7.8.9.

In special cases, the CEO may approve a payment in advance, which will be attributed to the annual bonus to which an office holder will be entitled, provided that such advance payment does not exceed two monthly salaries. It is clarified that if, at the end of that year, the office holder is not entitled to the bonus or is only entitled to a lower bonus than the advance amount, the Company will demand from the office holder to return such advance payment.

 

7.8.10.

Further to the provisions above in this Section 7, the bonus program may contain other provisions by which a mechanism will be established to reschedule or condition some of the annual bonus payments, based on achieving long-term measurable goals, over a period of two or three calendar years, as well as rules for calculating the entitlement to such a multi-annual bonus, at the end of the multi-annual measuring period. The rules and conditions for such a multi-annual bonus will be set and presented to the Company’s competent organs  for approval, in accordance with applicable law.

 

 

8.

Retention Bonus

 

Because of the unique character of the Company’s activity and the importance of retaining its office holders, the Company’s Board of Directors and Compensation Committee may determine retention bonuses for office holders, in a total amount of: (a) NIS 600,000 for the Company’s CEO, to be accrued gradually over a period of up to three years; (b) NIS 500,000 for each of the VP of Marketing, Sales, and Business Development and the VP of Engineering and Operations, to be accrued gradually over a period of up to 3 years; (c) NIS 300,000 for each of the Company’s CFO and VP of Development, to be accrued gradually, over a period of up to 3 years. Multiple simultaneous “retention” plans will not be granted to the same office holder.

 

9.

Equity compensation

 

9.1.

Subject to obtaining the approval of the Company’s competent organs , the Company may offer the office holders to participate in the Company’s share option allotment plan.9

 

9.2.

The purpose of granting options to Company employees is, among other things, to further the Company’s interests by allowing employees, office holders, directors, consultants, and other selected service providers serving the Company or its affiliates (as the term is defined in the options plan), to acquire equity interests in the Company or increase their equity interests, as applicable, by granting them options, thus providing such offerees another incentive to start or continue working for, or engage with, the Company or its affiliate, as applicable, and foster the offerees’ sense of being a partial owner of the Company and incentivize such offeree’s interest in the success of the Company and the affiliate with which the offeree is employed or with which they are engaged.

 

9.3.

The approved plan will be determined based on the relevant considerations and criteria set forth in Sections 2, 3, and 5 above, and it will include the following provisions:

 

9.3.1.

The number of options issued pursuant to the plan, the method of granting the allocation to the different offerees, and the number of additional share options to be allocated among the office holders who may join the Company throughout the plan’s effectiveness period.

 

9.3.2.

The issued options will be allocated among the office holders in one of the following tax routes at the Company’s discretion, and subject to the relevant limitations and restrictions under applicable statutes: (a) options in the trustee route, under Section 102 of the Income Tax Ordinance [New Version], 1961 (hereinafter, the “Ordinance”); (b) options in the non-trustee route under Section 102 of the Ordinance; or (c) options under Section 3(I) of the Ordinance.

 

9.3.3.

When granting share-based compensation, the exercise price will be higher than the share price on the award date, so that it provides a suitable incentive to maximize the Company’s long-term value, and in any case, may not fall below the average price in the 30 trading days before the award.

 

9.3.4.

The maximum value in annual terms10 (to be calculated on the award date, divided by the number of vesting years, equally) of the equity option grants to an office holder (including the Company’s CEO) may not exceed 85% of the aggregate salary (gross, including the related expenses and annual bonuses) paid to such office holder.

 

9.3.5.

The maximum potential dilution of all equity awards by the Company shall be 10%.11

 

9	For details on the options plan the Company passed, see the transaction report the Company published on March 15, 2010 (Ref. No. 2010-01-415413).

 

10	According to the Black and Scholes model or another value considered for accounting purposes.

 

  

9.3.6.

The vesting period will not be shorter than three years (i.e., may not exceed one third for each year). The Company may approve the accelaeration of vesting periods of the entire issued equity based compensation that has not yet vested, in the event of a change of control of the Company and/or a merger and acquisition transactions of the Company.

 

9.3.7.

The expiration date of options will not be less than one year after they vest, but will not exceed 10 years from the allocation date (subject to provisions regarding expiration upon an office holder’s end of emplyment or engagement to provide services).

 

9.3.8.

The possibility to condition all or some of the options’ vesting, granted to any recipient, on achieving goals, including long-term goals, which will be determined on the allotment date.

 

9.3.9.

The Board of Directors may accelerate the vesting period of options, in whole or in part, including in the event that control of the Company changes or Company shares are delisted from any exchange, all according to the option plan.

 

9.3.10.

The option plan will include conditions regarding an employee’s departure under different circumstances (switching between companies in the Group,  resignation, dismissal, or death and disability).

 

9.3.11.

The option plan will set forth terms to adapt the exercise price in the event of distributions, rights offerings, etc.

 

9.3.12.

The consideration for exercising the options may be performed in a cashless mechanism, whereby the offeree is entitled only to receive such number of shares from the Company reflecting the economic value that the offeree would have received from exercising the stock options according to the shares’ market price, less their exercise price. The Board of Directors may adopt the mechanism at any time.

 

10.

Related Social Benefits and Rewards

 

If an office holder’s terms of office or employment include provisions in connection with the matters set forth below, such terms will be determined according to the relevant considerations and criteria in Sections 2, 3, and 5 above, and according to the terms set forth below:

 

10.1.

The Main Related Benefits Granted to All Office Holders (Not Including Directors)12

 

10.1.1.

The office holders employed at the Company are entitled to the Company’s standard provisions to an executive insurance policy, disability insurance, and a study fund.

 

10.1.2.

Company office holders are entitled to sick days, vacation days, and convalescence days, according to the Company’s standard policy for senior employees and according to their seniority in the Company, and in any case, not less than that set forth in any applicable statute and not more than 28 vacation days for every work year.

 

11	The number of shares for the purpose of dilution will be calculated based on the value of the options granted according to the obtain valuation – divided by the expected share price upon exercise according to the Black and Scholes model or the binomial model. The stock options will be converted using the “net exercise” mechanism (cashless exercise), which means that the number of shares resulting from exercising the stock options will be less than the number of stock options converted. The number of shares on a fully diluted basis is calculated based on the Black and Scholes model or the binomial model. The dilution is calculated without debentures or options allotted in public offerings or offerings to institutional investors.
12	That said in this policy does not detract from granting a material benefit to the officers.

   

 

10.1.3.

The Company may provide each office holder with a vehicle to perform their duties. If such a vehicle is made available to an office holder, the Company will bear the fixed expenses of maintaining the vehicle, according to the Company’s procedures. The office holder will bear the tax imposed due to the benefit to the office holder resulting from the use of the vehicle, and must also pay all fines or tickets imposed due to using the vehicle, if any, but the Company may gross up such tax and/or expenses.

 

10.1.4.

If the office holder’s office and employment terms include a mobile phone, the office holder will be entitled to reimbursement of mobile phone related expenses, as the Company may decide and in its exclusive discretion. The office holder will pay any tax that may apply to such office holder due to the use of the mobile phone, but the Company may gross up such tax and/or expenses.

 

10.1.5.

If the office holder’s office and employment terms include reimbursement of expenses, the office holder will be entitled to be reimbursed for the reasonable expenses incurred while performing such office holder’s job, against receipts, in accordance with the Company’s policy.

 

10.1.6.

If the office and employment terms include living expenses abroad for overseas travel, the Company will pay the overseas living expenses for the office holder throughout their overseas stay for work purposes, according to Company procedures.

 

10.1.7.

Company office holders may be entitled, in accordance with and subject to such office holder’s personal employment terms, to full severance pay upon the end of the employee-employer relationship, for any reason whatsoever, including resignation, and excluding dismissal “under serious circumstances”, as defined below. Alternatively, office holders may be entitled to severance pay under Section 14 of the Severance Pay Law, 196313.

 

10.1.8.

Subject to the Compensation Committee’s approval, the Company may grant to office holders additional benefits, not to exceed 10% of the monthly cost of such office holder’s relevant fixed component (annualized).

 

10.2.

Insurance and Indemnity

 

The Company has obtained insurance to cover its present and/or future directors’ and office holders’ liability, from time to time, including the directors who are the controlling shareholder or the controlling shareholder’s relatives.

 

Without derogating from the provisions of any applicable law, the Compensation Committee may approve, from time to time and as long as this Compensation Policy is effective, the Company’s entrance into an insurance policy to cover the office holders’ and directors’ liability, for present or future office holders and directors in the Company and in the Company’s subsidiaries/subsidiary partnerships from time to time, as long as the total annual coverage under the policy for a particular year does not exceed USD 45,000,000 per claim and for the insurance period, provided that such insurance is made on market terms and may not substantially affect the Company’s profitability, property, or liabilities, and for premiums and with deductibles that are on market terms at such times which may not have a material effect on the Company’s profitability, property, or liabilities, and according to offers received from parties independent of the Company.

 

Indemnity undertakings according to the provisions of the Company’s articles of association, in the same form and terms for all Company office holders, including the directors who are the controlling shareholder or the controlling shareholder’s relatives.

 

According to the provisions of the Company’s articles of association, the maximum aggregate amount in which the Company may indemnify all office holders may not exceed 25% of the Company’s equity, according to the Company’s most recent financial statements on the date of actual indemnification payment.

 

13	As of the authorization of this policy, the Company’s serving officers are entitled to full severance upon the termination of the employee-employer relationship for any reason whatsoever, including following their resignation, and not including upon dismissal under “serious circumstances”.

 

 

11.

Terms for end of tenure

 

11.1.

An office holder will be entitled to advance notice of termination of employment, as set forth in the employment agreement or the service agreement between the Company and such office holder, in accordance with the below (and no less than the minimum required under any applicable law):

 

Job title	Maximum period
CEO, VP of Marketing, Sales, and Business Development; VP of Engineering and operation14	Up to 6 months
Other office holders (not including directors)	Up to 4 months

 

11.2.

The prior notice period will be determined according to the relevant considerations and criteria in Sections 2, 3, and 5 above, and will be approved by the Company’s competent organs, according to the provisions of any applicable law.

 

11.3.

The Company’s office holders may be entitled to all benefits under their respective employment agreements or to the redemption of such benefits, as though they had continued being Company employees, even if the prior notice period (or part of it) is redeemed.

 

11.4.

During the prior notice period, the office holder must continue to perform such office holder’s job at the Company (according to the Company’s decision).

 

11.5.

The office holders’ terms of office and employment will include a provision under which the Company may dismiss the office holder without prior notice in cases that revoke such officer holder’s entitlement to severance pay, which include embezzlement, theft, a criminal offense involving moral turpitude, a violation of the duty of confidence and/or noncompete clause, a severe disciplinary violation, a breach of trust, and a fundamental breach of the agreement (“Dismissal Under Serious Circumstances”).

 

11.6.

Retirement bonus

 

11.6.1.

In addition to the prior notice period, the Company may approve a retirement/adjustment bonus to the CEO, VP of Marketing, Sales, and business development, and the VP of Engineering and Operations, in an amount not to exceed six monthly salaries , in the event of dismissal by the Company (excluding Dismissal Under Serious Circumstances), or their resignation, as the case may be. Only an office holder’s monthly salary will be taken into consideration for the purpose of a retirement mbonus (i.e. benefits, other grants and bonuses, etc. are excluded), multiplied by the number of months granted to that office holder.

 

11.6.2.

Other office holders might be entitled to retirement bonuses in an amount not to exceed two monthly salaries  (additional to the prior notice, as set forth above).

 

11.6.3.

The retirement bonuses will be brought before the Company’s competent organs  for approval, in accordance with applicable law, before entry into the employment agreement or the service agreement, and they will be determined according to the relevant considerations and criteria set forth in Sections 2, 3, 5 above, and subject to the office holders’ satisfaction of all the following conditions:

 

14

At present, this applies to the Company’s founders, Gilad Yavetz, Zafrir Yoeli and Amit Paz, and shall apply in the event of a change of their position in the Company as well. Beyond that, the above also applies to all other Company officers holding these positions.

 

 

11.6.3.1.

They have been a Company employee or have been providing services to the Company for at least 3 years;

 

11.6.3.2.

During such office holder’s employment period, the office holder made a material contribution to advance the Company's business and to maximize its profits.

 

11.6.3.3.

The circumstances of the office holder’s retirement do not justify revoking such office holder’s severance.

 

11.6.3.4.

The Company’s CEO (or the Chairman of the Board of Directors, if the CEO is retiring) recommended paying the retirement bonus based on the Company’s performance in the relevant period.

 

12.

Commercial Protections

 

The employment agreements and the services agreements entered into with office holders will include provisions intended to protect the Company’s intellectual property rights, and confidentiality and noncompete clauses, which will be adapted to the relevant office holder according to the position’s sensitivity and the importance for the Company.

 

13.

Other General Provisions

 

13.1.

The office holders to whom the Compensation Policy applies may be Company employees or independent contractors providing services to it. If the office holder provides services to the Company as an independent contractor, the provisions of the Compensation Policy will apply, mutatis mutandis, and the compensation to the office holder will be paid against invoices, and the compensation components will be normalized, so that overall, they will financially match the provisions of this policy, provided that the foregoing does not adversely affect the Company’s best interest, condition, and plans.

 

13.2.

The provisions of this Compensation Policy shall not derogate from any present and/or future provision of any applicable law, including, without derogating from the generality of the foregoing, the provisions of the Companies Law, and/or the regulations and/or orders promulgated thereunder, and any relief, exemption and/or additional discretion granted to any of the Company organs , as set forth in any such statutory provision, including provisions adopted into law after the approval of this policy, they will apply to the Company and be considered part of this Compensation Policy, after the Compensation Committee or the Company Board of Directors decide to add them, in whole or in part, to this policy – without requiring shareholders approval therefor.

 

13.3.

The Compensation Committee and Board of Directors may approve a deviation of up to 5% per calendar year, from any maximum amount, limitation, or other provisions stated in this policy, and such a deviation will be considered compliant with the Compensation Policy. The foregoing does not apply to sections of the Compensation Policy with respect to which a specific deviation threshold has been determined.

 

13.4.

However, immaterial changes to the office and employment terms of office holders who report directly to the CEO and who are not controlling shareholders shall require only the Compensation Committee’s prior approval, provided that the Compensation Committee determines that the change to the employment terms is immaterial. For that purpose, it has been determined that the total immaterial changes in the office and employment terms of such office holder, which will be approved by the Compensation Committee for any reporting year, may not exceed 5% (in real terms), relative to all office and employment terms of the office holder’s which were approved by the Company’s competent organs, for that reporting year.

 

14.

Validity

 

The Compensation Policy will be valid for three years from the date of its approval by the general meeting, as set forth above, in accordance with Section 267A(D) of the Law.

  

The foregoing notwithstanding, the Company Board of Directors will occasionally, and not less than every year, review the Compensation Policy and its compliance with applicable law, provided there has been a material change to the circumstances existing at the date of the policy’s adoption, or for other reasons. Subject to Section 14.2 above, changes to the Compensation Policy, if any, will be approved in accordance with applicable law.

 

In addition, the Compensation Committee will review from time to time the implementation of the Compensation Policy, and if the Compensation Committee deems it appropriate, the Compensation Committee will recommend to the Board of Directors to update the Compensation Policy.

 

 

 

 

Exhibit 10.6

 

[English Summary of Original Hebrew Agreement]

 

The following is a summary of the terms of material provisions of the Credit Agreement Framework (the "Agreement") entered into on July 5, 2021 and amended on March 8, 2022 between Bank Leumi Le-Israel B.M. (the "Lender") and Enlight Renewable Energy Ltd. (the "Company").

 

·

Dates of agreement: Valid from July 5, 2021 to January 5, 2023.

 

·

Scope of available credit: Company may request up to NIS 150M / USD 45.8M.

 

·

Credit requests: Funding will be transferred within two business days of a request by the Company.

 

·

Repayment terms:

 

-

Annual interest rate on outstanding credit amount is one of the following (at the Company's election): (1) variable rate equal to prime rate plus 0.4%, (2) fixed rate equal to linked government bonds rate plus 1.8% or (3) variable rate equal to LIBOR plus 2.05%.

 

-

Outstanding interest due to be paid quarterly.

 

-

Company repayment of principal amount required in one payment 60 month after the funding day.

 

-

Early repayment of any outstanding credit amount is permitted.

 

·

Securities and obligations:

 

-

Company required on quarterly basis to provide Lender with published financial results and report on compliance with agreement covenants.

 

-

Lender may transfer its rights under the agreement to certain entities defined in the agreement.

 

-

Company pledges to maintain rating of at least Baa3.il.

 

-

Negative pledge required on some of the Company's assets and on the assets of Company subsidiaries regarding any credit or receipts received by such subsidiaries under the Agreement, according to terms defined in the Agreement.

 

 

·

Company covenants:

 

-

Maintain minimum equity, as presented in the Company's financial results, of NIS 1.25 billion (the "Minimum Equity Covenant").

 

-

Debt to capital ratio will not exceed 65% during any two consecutive quarters (the "Debt to Capital Covenant").

 

-

Debt to EBITDA ratio will not exceed 15 during any two consecutive quarters (the "Debt to EBITDA Covenant").

 

-

Capital to balance sheet ratio in the Company's non-consolidated financial results will not be less than 25% during any two consecutive quarters (the "Capital to Balance Sheet Covenant").

 

·

Limitations on dividend distributions:

 

-

Company permitted to distribute dividends only if in compliance with the Minimum Equity Covenant, Debt to Capital Covenant and Debt to EBITDA Covenant.

 

-

In addition, the Capital to Balance Sheet Covenant must not have be less than 28% during any two consecutive quarters.

 

-

There must have been no event requiring immediate repayment of outstanding credit amounts.

 

-

Dividend payments must not exceed 70% of the net profit of the Company in the calendar year preceding the distribution.

 

·

Commissions:

 

-

0.2% of the total scope of available credit will be paid by July 12, 2021.

 

-

0.4% of the unused credit on an annual basis during credit availability, in accordance with the terms provided in the agreement.

 

·

Immediate repayment of outstanding credit amounts: The Company is subject to immediate repayment, at the option of the lender, of outstanding credit amounts in the event of non-compliance with financial covenants, violation of any other obligations in the Agreement or appearance on a sanctions list maintained by the United Nations, United States, European Union or Israel.

 

 

·

Breaches of the Agreement and obligation to notify Lender of breaches of the Agreement: Lender must be notified of breaches of the Agreement by the Company, which include non-compliance with financial covenants or violation of any other obligations in the Agreement.

 

·

Remedies in the event of violation of the Agreement: In the event of violation of the Agreement by the Company, remedies available to the Lender include:

 

-

Immediate repayment (as detailed above);

 

-

Interest rate increases of 0.25% for each breach of the Agreement, and interest rate increases of 0.50%, 0.75% and 1.00% for each level decline in the Company's rating (with a cumulative maximum interest rate increase as a result of such breaches and/or declines in the Company's rating equal to 1.25%); and

 

-

Other remedies according to the law.

 

In addition to the above, the Agreement includes a number of standard and other terms and conditions not summarized above, including various representations and declarations; a pledge of non-repayment of loans provided to the Company by certain interested parties/shareholders; various conditions precedent; and the obligation to notify Lender in the event of certain Company legal proceedings.

 

 

 

Exhibit 10.7

 

[English Summary of Original Hebrew Agreement]

 

The following is a summary of the terms of material provisions of the Credit Agreement Framework (the "Agreement") entered into on July 5, 2021 between Bank Hapoalim B.M. (the "Lender") and Enlight Renewable Energy Ltd. (the "Company").

 

·

Dates of agreement: Valid from July 5, 2021 to January 31, 2023.

 

·

Scope of available credit: Company may request up to NIS 250M / USD 76.4M.

 

·

Credit requests: Funding will be transferred within three business days of a request by the Company.

 

·

Repayment terms:

 

-

Annual interest rate on outstanding credit amount requested in NIS is one of the following (at the Company's election): (1) variable rate equal to prime rate plus 0.40%, (2) fixed rate equal to linked government bonds rate plus 1.75% or (3) fixed rate equal to government bonds rate plus 1.70%.

 

-

Annual interest rate on outstanding credit amount requested in USD is variable rate equal to LIBOR plus 2.20%.

 

-

Outstanding interest due to be paid quarterly.

 

-

On short terms extensions of credit, defined as those with a due date of up to 12 months, Company repayment of principal amount required in one payment 12 month after the funding day.

 

-

On long terms extensions of credit, defined as those with a due date of 12 to 60 months, Company repayment of principal amount required in one payment 60 month after the funding day.

 

-

Early repayment of any outstanding credit amount is permitted.

 

 

·

Securities and obligations:

 

-

Company required on quarterly basis to provide Lender with published financial results and report on compliance with agreement covenants.

 

-

Company pledges to maintain rating of at least Baa3.il or BBB.

 

·

Company covenants:

 

-

Maintain minimum equity, as presented in the Company's financial results, of NIS 1 billion (the "Minimum Equity Covenant").

 

-

Debt to capital ratio will not exceed 70% during any two consecutive quarters.

 

-

Debt to EBITDA ratio will not exceed 18 during any two consecutive quarters.

 

-

Capital to balance sheet ratio in the Company's non-consolidated financial results will not be less than 20% during any two consecutive quarters (the "Capital to Balance Sheet Covenant").

 

·

Commissions:

 

-

0.4% of the total scope of available credit will be paid by July 8, 2021.

 

-

0.5% of the unused credit on an annual basis during credit availability, in accordance with the terms provided in the agreement.

 

·

Limitations on dividend distributions: Company permitted to distribute dividends only if doing so is in compliance with legal requirements and each of the following conditions are met:

 

-

Dividend payments must not exceed 70% of the net profit of the Company as provided in its consolidated financial statements for the period prior to the decision regarding the distribution;

 

-

After the distribution, the Minimum Equity Covenant will be met; and

 

 

-

Capital to balance sheet ratio in the Company's non-consolidated financial results will not be less than 28%.

 

·

Power to reduce the scope of available credit or cancel the Agreement: Following a cure period of 14 days, the Lender may reduce the scope of available agreement under the Agreement or cancel the Agreement in the event of an event that provides the Lender with the right to demand immediate repayment.

 

·

Breaches of the Agreement: Breaches by the Company of the Agreement include changes in the Company's structure without the Lender's advance consent; non-compliance with financial covenants or violation of any other obligations in the Agreement; false representations and declarations that were not cured within 14 days; and Company failure to maintain a rating for more than 90 days.

 

·

Remedies in the event of violation of the Agreement: In the event of violation of the Agreement by the Company, remedies available to the Lender include:

 

-

Interest rate increases of 0.25% for not providing additional information at the Lender's request (with a cumulative maximum interest rate increase as a result of such failures to provide additional information equal to 1.00%);

 

-

Interest rate increases of 0.50% and 0.75% for each level decline in the Company's rating (with a cumulative maximum interest rate increase as a result of such declines in the Company's rating equal to 1.25%); and

 

-

Other remedies according to the law.

 

In addition to the above, the Agreement includes a number of standard and other terms and conditions not summarized above, including various representations, declarations and conditions precedent; and the obligation to notify Lender of changes in the Company's structure, changes in accounting principles in Company financial reports and in the event of certain Company legal proceedings.

 

 

 

 

 

Exhibit 21.1

 

Subsidiaries of Enlight Renewable Energy Ltd.

 

Name	State or Other Jurisdiction of Incorporation or Organization
Clenera Holdings, LLC	Delaware
Clenera DevCo, LLC	Delaware
Clenera, LLC	Nevada
Vjetroelektrana Lukovac d.o.o. za Proizvodnju Električne Energije	Croatia
SE Kolarina d.o.o.	Croatia
SE Raštević d.o.o.	Croatia
SE Benkovac d.o.o.	Croatia
AUREUS SOLIS d.o.o.	Croatia
MO-BO Energija d.o.o.	Croatia
Enlight Eshkol Vered Cyprus Limited	Cyprus
NEG Nordic Energies - GermanyVerwaltungsgesellschaft mbH	Germany
NEG Nordic Energies - Germany GmbH & Co. KG	Germany
Megujulohaz Kft.	Hungary
Danuba Energies Kft.	Hungary
Iberian Energies Kft.	Hungary
Nordic Energies Kft.	Hungary
Enlight EU energies Kft.	Hungary
Raaba ACDC	Hungary
Movilim Renewable Energies EU Ltd.	Hungary
Raaba Green Ltd.	Hungary
Raaba Flow Korlátolt Felelősségű Társaság	Hungary
Enlight Energy Ireland Limited	Ireland
Tullynamoyle Wind Farm 3 Limited	Ireland
Enlight Revivim Ein Gedi Management Ltd	Israel
Eshkol Ella-Kramim-Enlight, Limited Partnership	Israel
Eshkol Brosh-Idan-Enlight, Limited Partnership	Israel
Eshkol Zait -Zait Yarok-Enlight, L.P.	Israel
Sde Nehemia-Enlight, Limited Partnership	Israel
Talmey Bilu Green Energies Ltd	Israel
Enlight-Eshkol Ella, Limited Partnership	Israel
Enlight-Eshkol Brosh, Limited Partnership	Israel
Enlight Eshkol Geffen, Limited Partnership	Israel
Enlight Eshkol Hadas, Limited Partnership	Israel
Enlight Eshkol Vered, Limited Partnership	Israel
Enlight Movilim, Limited Partnership	Israel
Enlight-Eshkol Zait, Limited Partnership	Israel
Hadar-Enlight, Limited Partnership	Israel
Ruah Avigail-Enlight, Limited Partnership	Israel
Ruah Hanan-Enlight, Limited Partnership	Israel
Enlight Yanuach Wind Energy 1 LP	Israel
Enlight Yanuach Wind Energy 2 LP	Israel
Enlight Kisra Wind Energy LP	Israel
Hila-Enlight, Limited Partnership	Israel
Enlight-Eshkol Mimun Green, Limited Partnership	Israel
Enlight-Eshkol Mimun, L.P.	Israel

 

 

Movilim Management Enlight M.A. Ltd.	Israel
Mivtahim Green Energies Ltd	Israel
Eshkol Havazelet - Halutzyut Enlight L.P.	Israel
M.A. Movilim Renewable Energies, Limited Partnership	Israel
Greenlight Wind, Limited Partnership	Israel
Enlight Kramim, Limited Partnership	Israel
Enlight Kidmat Tzvi, Limited Partnership	Israel
Orsol Energy 3 (A.A) LP	Israel
Enlight Eshkol Dekel Limited Partnership	Israel
A.N. Faran Solar, Limited Partnership	Israel
Enlight Faran Management Ltd	Israel
Enlight Kidmat Tzvi Management Ltd	Israel
Emek Habacha Wind Energy Ltd.	Israel
Enlight Eshkol Havazelet, L.P.	Israel
Enlight Shdema Ltd	Israel
Tlamim-Enlight Renewable Energy, Limited Partnership	Israel
Eshkol Gefen-Barbur-Enlight, Limited Partnership	Israel
Netic Energies - Alternative Electrical Energies Ltd	Israel
Perot Hagolan – Enlight LP	Israel
Talmei Yafeh Sun, Limited Partnership	Israel
Dorot Sun, Limited Partnership	Israel
Talmei Yafeh Power Ltd	Israel
Dorot Solar Power Ltd	Israel
Enlight - Shira Holdings Ltd	Israel
Enilght Assets Ltd	Israel
Nurit – Enlight, Limited Partnership	Israel
Ruah Harduf-Enlight, Limited Partnership	Israel
Tlamim Enlight Ltd	Israel
Enlight - Beit Rimon Management Ltd	Israel
Israeli Wind Energy A.R. Ltd	Israel

 

 

Enlight Beit Shikma, Limited Partnership	Israel
Enlight Nofar Energy, Limited Partnership	Israel
Enlight Kramim Management Ltd	Israel
Enlight Ravivim Ltd	Israel
Ruah Shikma – Enlight, Limited Partnership	Israel
Enlight - Aveeram Enterprise, Limited Partnership	Israel
Karmey Haruah, Limited Partnership	Israel
Ruach Beresheet, Limited Partnership	Israel
E.A Avital Wind Energy Ltd	Israel
E.A. Alon Wind Energy Ltd	Israel
E.A. Sapir Wind Energy Ltd	Israel
Enlight-Aviram Wind Initiatives LP	Israel
Enlight- Yatir Wind Initiatives Ltd	Israel
Maale Gilboa - Enlight Holdings Ltd	Israel
Gilboa 1 Enlight-Aveeram, Limited Partnership	Israel
E.A. Lavi Wind, Limited Partnership	Israel
Winds Valley, Limited Partnership	Israel
A.E. Shikma Wind Energy Ltd	Israel
Kadarim Enlight Management Ltd	Israel
Kadarim Enlight Solar, Limited Partnership	Israel
Enlight Eco 4, Limited Partnership	Israel
Enlight - Shaked Management Ltd	Israel
Enlight Beit Ha-Shita Management Ltd	Israel
Enlight Beit Ha-Shita Solar Energy, Limited Partnership	Israel
Enlight - Management Kosovo Ltd	Israel
Danuba Power, Limited Partnership	Israel
Enlight - Shomria Management Ltd	Israel
Enlight - Shomria Solar, Limited Partnership	Israel
The Iberian Wind, Limited Partnership	Israel
Enlight - Management Spain Ltd	Israel

 

 

Enlight Tamar Ltd	Israel
Enlight - Management Sweden Ltd	Israel
Nordic Wind, Limited Partnership	Israel
Mey Golan - Enlight Management Ltd	Israel
Mey Golan - Enlight Floating Energy, Limited Partnership	Israel
Enlight Eco 1, Limited Partnership	Israel
Enlight Eco 2, Limited Partnership	Israel
Enlight Eco 3, Limited Partnership	Israel
Summer Flow, LP	Israel
Enlight - Eshkol Mimun Blue, Limited Partnership	Israel
Orsun Energy 3, LP	Israel
Orsun 3 Ltd	Israel
Enlight Tkuma Management Ltd	Israel
Enlight Tkuma Renewable Energy, Limited Partnership	Israel
Enlight Lilach, Limited Partnership	Israel
Core Capital Management Ltd	Israel
Enlight Fruits Of The Sun, Limited Partnership	Israel
Enlight Iris, Limited Partnership	Israel
Enlight Ein Habesor Management Ltd	Israel
Enlight Ein Habesor, LP	Israel
Enlight Maccabi Management Ltd	Israel
Enlight Maccabi, Limited Partnership	Israel
Enlight-Hartzit, Limited Partnership	Israel
Enlight Sde Nitzan Management Ltd	Israel
Enlight Sde Nitzan, LP	Israel
Enlight Revivim Renewable Energy, Limited Partnership	Israel
Enlight Revivim Management Ltd	Israel
Enlight Maccabi 2, Limited Partnership	Israel
E.N. Nir Akiva Management Ltd	Israel
Bananot Hahof Enlight Management Ltd	Israel

 

 

Bananot Hahof Enlight, Limited Partnership	Israel
Enlight Revivim Ein Gedi, Limited Partnership	Israel
E.N. Mahanayim Management Ltd	Israel
Enlight Reim Management Ltd.	Israel
Enlight Reim Renewable Energy LP	Israel
Enlight Lavi Management Ltd.	Israel
Enlight Lavi LP	Israel
Nardò Solar Energy S.r.l.	Italy
Genzano Solar Energy S.r.l.	Italy
Gravina 2 San Felice Solar Energy S.r.l.	Italy

 

 

Montemilone Solar Energy S.r.l.	Italy
Stel Renewable Energies S.r.l.	Italy
SOWI Kosovo L.L.C.	Kosovo
Balkan Energies Co-Operation U.A.	Netherlands
Balkan Energies Croatia 1 B.V.	Netherlands
Balkan Energies Serbia 1 B.V.	Netherlands
Balkan Energies Serbia 2 B.V.	Netherlands
ENG Wind Corporation Limited	Scotland
EW-K-Wind d.o.o Belgrade	Serbia
Enlightnes PV Operations d.o.o.	Serbia
Enlightnes PV Park d.o.o.	Serbia
Enlight K2-Wind d.o.o.	Serbia
Wind Park Crepaja d.o.o.	Serbia
Generacion Eolica Castilla La Mancha S.L.	Spain
Generacion Eólica Castilla La Mancha – Iberian Energy Spain, S.L.	Spain
HARO SOLAR 1, S.L.	Spain
Enlight Energia Renovable Espana S.L.	Spain
Haro Solar 3, S.L.	Spain
Peral Solar 1, S.L.	Spain
Mw Eolico, S.L.	Spain
Vindpark Malarberget i Norberg AB	Sweden
Prime Green Energy Infrastructure Fund S.A., SICAV-RAIF	Sweden
Björnberget Vindkraft AB	Sweden

 

 

 

Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the use of our report dated July 19, 2022, with respect to the consolidated financial statements of Enlight Renewable Energy Ltd., included herein and to the reference to our firm under the heading “Experts” in the prospectus.

 

/s/ Somekh Chaikin
Somekh Chaikin
Member Firm of KPMG International
Tel Aviv, Israel
January 20, 2023

 

 

 

Exhibit 107

 

Calculation of Filing Fee Tables

 

Form F-1
(Form Type)

 

Enlight Renewable Energy Ltd.
(Exact Name of Registrant as Specified in its Charter)

 

Table 1: Newly Registered Securities

 

		Security Type		Security Class Title		Fee Calculation or Carry Forward Rule		Maximum Aggregate Offering Price(1)(2)				Fee Rate				Amount of Registration Fee
Newly Registered Securities
Fees to Be Paid		Equity		Ordinary Shares, par value NIS 0.1 per share		Rule 457(o)		$	100,000,000				0.0001102			$	11,020
		Total Offering Amounts						$	100,000,000							$	11,020
		Total Fees Previously Paid															—
		Total Fee Offsets															—
		Net Fee Due						$	100,000,000							$	11,020

 

(1)	Includes offering price of any additional shares that the underwriters have the option to purchase.

(2)	Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended.