o
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
N/A
(Translation of Registrant’s
name into English)
|
Israel
(Jurisdiction of incorporation
or organization)
|
Title of Each Class
|
Name of Each Exchange on Which Registered
|
Ordinary Shares,
par-value NIS 0.65 each
|
The Nasdaq Global Market
|
4
|
|
4
|
|
4
|
|
5
|
|
5
|
|
5
|
|
5
|
|
18
|
|
29
|
|
29
|
|
40
|
|
51
|
|
61
|
|
63
|
|
64
|
|
80
|
|
81
|
|
82
|
|
82
|
|
82 | |
82
|
|
83
|
|
83
|
|
83
|
|
83
|
|
84
|
|
84 | |
84
|
|
84
|
|
84
|
|
85
|
|
85
|
|
85
|
|
85
|
Consolidated Statement of Operations Data: |
Year Ended December 31,
|
|||||||||||||||||||
2009
|
2010
|
2011
|
2012
|
2013
|
||||||||||||||||
(U.S. dollars in thousands, except per share data)
|
||||||||||||||||||||
Fixed income from real estate
|
$ | 272 | $ | 1,650 | $ | 12,479 | $ | 13,676 | $ | 13,711 | ||||||||||
Costs and expenses:
|
||||||||||||||||||||
Cost of real estate operation
|
11 | 59 | 1,869 | 1,966 | 2,199 | |||||||||||||||
Real estate depreciation and amortization
|
115 | 695 | 2,153 | 2,569 | 3,369 | |||||||||||||||
General and Administrative
|
1,175 | 1,502 | 3,057 | 2,068 | 1,870 | |||||||||||||||
Total costs and expenses
|
1,301 | 2,256 | 7,079 | 6,603 | 7,438 | |||||||||||||||
Operating income (loss)
|
(1,029 | ) | (606 | ) | 5,400 | 7,073 | 6,273 | |||||||||||||
Gain on bargain purchase
|
- | - | 4,412 | - | - | |||||||||||||||
Equity share in earnings (losses) of associates, net
|
- | - | - | (32 | ) | (172 | ) | |||||||||||||
Other loss
|
- | (600 | ) | - | (100 | ) | 384 | |||||||||||||
Financial income (loss), net
|
617 | 304 | (7,481 | ) | (1,243 | ) | (1,343 | ) | ||||||||||||
Net income (loss) before taxes on income
|
(412 | ) | (902 | ) | 2,331 | 5,698 | 5,142 | |||||||||||||
Taxes on income
|
- | (43 | ) | (481 | ) | (1,643 | ) | (1,518 | ) | |||||||||||
Net income (loss) from continuing operations
|
(412 | ) | (945 | ) | 1,850 | 4,055 | 3,624 | |||||||||||||
Net income (loss) from discontinued operations
|
472 | 5,399 | (51 | ) | - | - | ||||||||||||||
Net income
|
$ | 60 | $ | 4,454 | $ | 1,799 | $ | 4,055 | $ | 3,624 | ||||||||||
Net income attributable to non-controlling interest
|
- | - | 2,038 | 2,478 | 2,159 | |||||||||||||||
Net income (loss) attributable to Optibase LTD
|
$ | 60 | $ | 4,454 | $ | (239 | ) | $ | 1,577 | $ | 1,465 | |||||||||
Net earnings (loss) per share :
|
||||||||||||||||||||
Basic and Diluted net earnings (loss) per share from continuing operations
|
$ | (0.12 | ) | $ | (0.3 | ) | $ | (0.07 | ) | $ | 0.41 | $ | 0.38 | |||||||
Basic and diluted net earnings (loss) per share from discontinued operations
|
$ | 0.145 | $ | 1.65 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||
Basic and diluted net earnings (loss) per share
|
$ | 0.02 | $ | 1.35 | $ | (0.07 | ) | $ | 0.41 | $ | 0.38 | |||||||||
Weighted average number of shares used in computing basic
and diluted net earnings (loss) per share (in thousands):
|
||||||||||||||||||||
Basic
|
3,307 | 3,311 | 3,642 | 3,818 | 3,822 | |||||||||||||||
Diluted
|
3,308 | 3,311 | 3,642 | 3,820 | 3,826 |
Year Ended December 31,
|
||||||||||||||||||||
2009
|
2010
|
2011
|
2012
|
2013
|
||||||||||||||||
(U.S. dollars in thousands)
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 28,651 | $ | 30,260 | $ | 22,945 | $ | 19,142 | $ | 18,811 | ||||||||||
Working capital
|
29,621 | 26,415 | 16,361 | 11,985 | 10,112 | |||||||||||||||
Real estate property net
|
22,080 | 32,353 | 192,173 | 194,826 | 209,761 | |||||||||||||||
Total assets
|
63,350 | 64,726 | 219,885 | 224,882 | 238,748 | |||||||||||||||
Long term loans, including current maturities
|
18,262 | 19,589 | 126,135 | 126,895 | 127,741 | |||||||||||||||
Capital Stock
|
126,299 | 126,378 | 131,478 | 131,568 | 138,813 | |||||||||||||||
Total shareholders’ equity
|
$ | 35,238 | $ | 40,392 | $ | 61,261 | $ | 66,552 | $ | 78,924 |
|
·
|
The purchase or failure to purchase real-estate assets;
|
|
·
|
Changes in rent prices for our properties;
|
|
·
|
Changes in presence of tenants and tenants' insolvency;
|
|
·
|
Changes in the availability, cost and terms of financing;
|
|
·
|
The ongoing need for capital improvements;
|
|
·
|
Changes in foreign exchange rates;
|
|
·
|
Changes in interest rates; and
|
|
·
|
General economic conditions, particularly in those countries or regions in which we operate.
|
|
·
|
Availability of funding resources for the acquisition of new real estate assets;
|
|
·
|
General market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors;
|
|
·
|
Seizure of a substantial business opportunity by our competitors or us;
|
|
·
|
Changes in interest rates;
|
|
·
|
Changes in foreign exchange rates;
|
|
·
|
The entering into new businesses;
|
|
·
|
Quarterly variations in our results of operations or in our competitors’ results of operations; and
|
|
·
|
Changes in earnings estimates or recommendations by securities analysts.
|
|
·
|
Additional operating expenses without additional revenues;
|
|
·
|
Potential dilutive issuances of equity securities;
|
|
·
|
The incurrence of debt and contingent liabilities;
|
|
·
|
Amortization of bargain purchase gain and other intangibles;
|
|
·
|
Impairment charges; and
|
|
·
|
Other acquisition-related expenses.
|
|
·
|
employment levels;
|
|
·
|
availability of financing for homebuyers and for real estate investors/funds;
|
|
·
|
interest rates;
|
|
·
|
consumer confidence and expenditure;
|
|
·
|
levels of new and existing homes for sale;
|
|
·
|
demographic trends;
|
|
·
|
urban development and changes;
|
|
·
|
housing demand;
|
|
·
|
local laws and regulations; and
|
|
·
|
acts of terror, floods or earthquakes.
|
|
·
|
even if we enter into an acquisition agreement for a property, it is usually subject to customary conditions to closing, including due diligence investigations to our satisfaction;
|
|
·
|
we may be unable to finance acquisitions on favorable terms or at all;
|
|
·
|
acquired properties may fail to perform as we expected;
|
|
·
|
we may not be able to obtain adequate insurance coverage for new properties; and
|
|
·
|
we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and therefore our results of operations and financial condition could be adversely affected.
|
|
·
|
liabilities for clean-up of undisclosed environmental contamination;
|
|
·
|
claims by tenants, vendors or other persons arising from dealing with the former owners of the properties;
|
|
·
|
liabilities incurred in the ordinary course of business; and
|
|
·
|
claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties.
|
|
·
|
an inability to acquire a desired property because of competition from well-capitalized real estate investors, including publicly traded and privately held REITs, private real estate funds, domestic and foreign financial institutions, life insurance companies, sovereign wealth funds, pension trusts, partnerships and individual investors; and
|
|
·
|
an increase in the purchase price for such acquisition property, in the event we are able to acquire such desired property.
|
|
·
|
The judgment was rendered by a court which was, according to the laws of the state of the court, competent to render the judgment;
|
|
·
|
The judgment can no longer be appealed;
|
|
·
|
The obligation imposed by the judgment is enforceable according to the rules relating to the enforceability of judgments in Israel and the substance of the judgment is not contrary to public policy; and
|
|
·
|
The judgment is executory in the state in which it was given.
|
|
·
|
The judgment was obtained by fraud;
|
|
·
|
There was no due process;
|
|
·
|
The judgment was rendered by a court not competent to render it according to the laws of private international law in Israel;
|
|
·
|
The judgment is at variance with another judgment that was given in the same matter between the same parties and which is still valid; or
|
|
·
|
At the time the action was brought in the foreign court a suit in the same matter and between the same parties was pending before a court or tribunal in Israel.
|
·
|
purchase of real estate mainly in Central and Western Europe, North America and Israel;
|
·
|
developing and improving existing real estate;
|
·
|
maximize the leasing of existing properties to commercial users;
|
·
|
increase and develop unused building rights in our existing properties; and
|
·
|
acquire additional commercial, residential and other real estate assets in light of market conditions, while diversifying our real estate property base.
|
Property
|
Location
|
Acquisition
date
|
Company Stake
|
Nature of Rights
|
Property Type
|
Net
Rentable
Square Meters
Excluding
Redevelopment
Space
(1)
|
Annualized
Rent
($000)
(2)
|
Rate of Occupancy
(3)
|
Annualized
Rent per
Occupied
Square
Meter
($)
(4)
|
NOI ($000)
(5)
|
Centre des Technologies Nouvelles (CTN)
|
Geneva, Switzerland
|
March 2, 2011
|
51%
|
Ownership with land lease
|
Commercial
|
34,271
|
11,328
|
96
|
344
|
9,785
|
Rümlang
|
Rümlang, Switzerland
|
October 29, 2009
|
100%
|
Ownership
|
Commercial
|
12,500
|
1,827
|
95
|
153
|
1,612
|
Miami, Florida*
|
Miami, Florida
|
2010-2013
|
100%
|
Ownership
|
Residential - Condominium Units
|
5,741
|
1,148
|
75
|
267
|
115
|
Portfolio Total/ Weighted Average
|
-
|
-
|
-
|
-
|
-
|
52,512
|
14,303
|
94
|
291
|
11,512
|
Thousands US$ | ||||
Net operating income NOI (Non-GAAP):
|
||||
CTN
|
9,785 | |||
Rumlang
|
1,612 | |||
Miami
|
115 | |||
Total (“NOI”) (Non-GAAP)
|
11,512 | |||
less:
|
||||
Real estate depreciation and amortization
|
3,369 | |||
General and administrative
|
1,870 | |||
Operating
income
|
6,273 |
Property
|
Location
|
Acquisition
date
|
Company Stake
|
Nature of Rights
|
Property Type
|
Net
Rentable
Square Feet
Excluding
Redevelopment
Space
(1)
|
Annualized
Rent
($000)
(2)
|
Rate of Occupancy
(3)
|
Annualized
Rent per
Occupied
Square
Feet
($)
(4)
|
2 Penn Center Plaza
|
Philadelphia, Pennsylvania
|
October 12,2012
|
19.66%
|
Beneficial interest in the owner of the property
|
Commercial
|
505,595
|
10,260
|
81
|
25
|
Texas Shopping Centers Portfolio
|
Houston, Dallas, San Antonio, Texas
|
December 31,2012
|
4%
|
Beneficial interest in the portfolio
|
Commercial
|
2,402,465
|
26,899
|
92
|
12
|
Portfolio Total/ Weighted Average
|
-
|
-
|
-
|
-
|
-
|
2,908,060
|
37,159
|
90
|
14
|
Number of tenants whose
leases will expire
*
|
Total area covered
by these leases
|
Area covered
by these leases (%)
|
Annual rent
at expiration ($000)
|
Percent of Annual rent at expiration (%)
|
||||||||||||||||
2014
|
7 | 611 | 1.8 | 253 | 2.2 | |||||||||||||||
2015
|
6 | 6,278 | 18.3 | 1,951 | 17.2 | |||||||||||||||
2016
|
8 | 7,998 | 23.3 | 2,772 | 24.5 | |||||||||||||||
2017
|
8 | 5,638 | 16.5 | 1,756 | 15.5 | |||||||||||||||
2018
|
9 | 3,479 | 10.2 | 1,299 | 11.5 | |||||||||||||||
Thereafter
|
4 | 8,969 | 26.1 | 3,297 | 29.1 | |||||||||||||||
Sub-total
|
42 | 32,973 | 96.2 | 11,328 | 100 | |||||||||||||||
Vacant
|
- | 1,298 | 3.8 |
N.A
|
N.A
|
|||||||||||||||
Total
|
42 | 34,271 | 100 | 11,328 | 100 |
*
|
The leases with the tenants described in the above table include notice periods ranging from one to twelve months and some leases with no break options at all.
|
Number of tenants whose
leases will expire*
|
Total area covered
by these leases
|
Area covered
by these leases (%)
|
Annual rent
at expiration ($000)
|
Percent of Annual rent at expiration (%)
|
||||||||||||||||
2014
|
5 | 5,770 | 46.2 | 973 | 53.2 | |||||||||||||||
2015
|
3 | 4,211 | 33.7 | 577 | 31.6 | |||||||||||||||
2016
|
1 | 192 | 1.5 | 25 | 1.4 | |||||||||||||||
2017
|
2 | 370 | 3 | 52 | 2.9 | |||||||||||||||
2018
|
3 | 1,379 | 11 | 200 | 10.9 | |||||||||||||||
Thereafter
|
- | - | - | - | - | |||||||||||||||
Sub-total
|
14 | 11,922 | 95.4 | 1,827 | 100 | |||||||||||||||
Vacant
|
- | 578 | 4.6 |
N.A
|
N.A
|
|||||||||||||||
Total
|
14 | 12,500 | 100 | 1,827 | 100 |
*
|
The leases with the tenants described in the above table include notice periods ranging from April 2014 and through May 2018, with notice periods ranging from three to six months and one lease with no break options at all.
|
|
·
|
the acquisition of a stake in an office building located at 485 Lexington Avenue in Manhattan, New York, which was terminated;
|
|
·
|
the acquisition of a commercial building located in Rümlang, Switzerland;
|
|
·
|
the acquisition of 21 apartments in a residential property located in Miami, Florida;
|
|
·
|
the acquisition of a 51% stake in a Swiss company holding a commercial property in Geneva, Switzerland;
|
|
·
|
the acquisition of approximately 20% beneficial interest in the owner of a commercial office building in Philadelphia;
|
|
·
|
the acquisition of an approximately 4% beneficial interest in a portfolio of shopping centers in Texas;
|
|
·
|
the acquisition of three penthouses in a residential property located in Miami, Florida; and
|
|
·
|
the acquisition of twelve luxury condominium units located in Miami Beach, Florida.
|
Year Ended December 31
|
||||||||||||
2011
|
2012
|
2013
|
||||||||||
Fixed income real estate
|
100.0 | % | 100.0 | % | 100 | % | ||||||
Costs and expenses:
|
||||||||||||
Cost of real estate operations
|
15 | 14.4 | 16 | |||||||||
Real estate depreciation and amortization
|
17.3 | 18.8 | 24.6 | |||||||||
General and administrative
|
24.5 | 15.1 | 13.6 | |||||||||
Total costs and expenses
|
56.8 | 48.3 | 54.2 | |||||||||
Operating income
|
43.2 | 51.7 | 45.8 | |||||||||
Gain on bargain purchase
|
35.5 | - | - | |||||||||
Equity share in losses of associates, net
|
- | (0.2 | ) | (1.3 | ) | |||||||
Other income (expenses), net
|
- | (0.7 | ) | 2.8 | ||||||||
Financial expenses, net
|
(60 | ) | (9.1 | ) | (9.8 | ) | ||||||
Income before provision for tax
|
18.7 | 41.7 | 37.5 | |||||||||
Provision for tax
|
(3.9 | ) | (12 | ) | (11.1 | ) | ||||||
Net income from continuing operations
|
14.8 | 29.7 | 26.4 | |||||||||
Loss from Discontinued Operations
|
(0.4 | ) | - | - | ||||||||
Net income
|
14.4 | 29.7 | 26.4 | |||||||||
Net income attributable to non-controlling interest
|
16.3 | 18.1 | 15.7 | |||||||||
Net income (loss) attributable to Optibase
|
(1.9 | ) | 11.6 | 10.7 |
v
|
Long-lived assets including intangible assets
|
v
|
Investment in companies
|
v
|
Goodwill and bargain purchase gain
|
v
|
Business combination
|
v
|
Contingencies; and
|
v
|
Income Taxes.
|
Payments Due by Period
(USD in thousands)
|
||||||||||||||||||||
Contractual Obligations
|
Total
|
Less than 1 year
|
1- 3 years
|
4-5 years
|
After 5 years
|
|||||||||||||||
Long-Term Debt
|
127,742 | 2,669 | 8,007 | 5,338 | 111,728 | |||||||||||||||
Capital Lease Obligations
|
7,374 | 118 | 353 | 235 | 6,668 | |||||||||||||||
Lease Obligations
|
103 | 56 | 47 | -- | -- | |||||||||||||||
Purchase Obligations
|
-- | -- | -- | -- | -- | |||||||||||||||
Severance pay
|
-- | -- | -- | -- | -- | |||||||||||||||
Other Long-Term Obligations
|
-- | -- | -- | -- | -- | |||||||||||||||
Total Contractual Cash
Obligations
|
135,219 | 2,843 | 8,407 | 5,573 | 118,396 |
Amount of Commitment Expiration Per Period
(USD in thousands)
|
||||||||||||||||||||
Other Commercial Commitments
|
Total
|
Less than 1 year
|
1- 3 years
|
4-5 years
|
After 5 years
|
|||||||||||||||
Lines of Credit
|
-- | -- | -- | -- | -- | |||||||||||||||
Standby Letters of Credit
|
-- | -- | -- | -- | -- | |||||||||||||||
Guarantees
|
144 | -- | 144 | -- | -- | |||||||||||||||
Standby Repurchase Obligations
|
-- | -- | -- | -- | -- | |||||||||||||||
Other Commercial Commitments
|
-- | -- | -- | -- | -- | |||||||||||||||
Total Commercial Commitments
|
144 | -- | 144 | -- | -- |
Name
|
Age
|
Position
|
||
Alex Hilman
|
61
|
Executive Chairman of the board of directors
|
||
Amir Philips
|
46
|
Chief Executive Officer
|
||
Shlomo (Tom) Wyler
|
62
|
Chief Executive Officer of Optibase Inc.
|
||
Yakir Ben-Naim
|
42
|
Chief Financial Officer
|
||
Orli Garti Seroussi
(1)(2)(3)
|
53
|
Director
|
||
Danny Lustiger
(1)(3)
|
46
|
Director
|
||
Chaim Labenski
(1)(2)(3)
|
66
|
Director
|
(1)
|
Member of our audit committee
|
(2)
|
External director
|
(3)
|
Member of our compensation committee
|
v
|
A breach of the duty of care vis-a-vis us or vis-a-vis another person;
|
v
|
A breach of the fiduciary duty vis-a-vis us, provided that the director or officer acted in good faith and had a reasonable basis to believe that the act would not harm us;
|
v
|
A monetary obligation imposed on him or her in favor of another person;
|
v
|
Financial liability imposed on him for payment to persons or entities harmed as a result of violations in Administrative Proceedings, as detailed in section 52(54)(A)(1)(a) of the Israeli Securities Law;
|
v
|
Expenses incurred by him in connection with Administrative Proceedings (as defined above) he was involved in, including reasonable litigation fees, and including attorney fees; or
|
v
|
Any other matter in respect of which it is permitted or will be permitted under applicable law to insure the liability of our director or officer.
|
v
|
Any financial liability he or she incurs or imposed on him or her in favor of another person in accordance with a judgment, including a judgment given in a settlement or a judgment of an arbitrator, approved by a court.
|
v
|
Reasonable litigation expenses, including legal fees, incurred by the director or officer or which he or she was ordered to pay by a court, within the framework of proceedings filed against him or her by or on behalf of Optibase, or by a third party, or in a criminal proceeding in which he or she was acquitted, or in a criminal proceeding in which he or she was convicted of a felony which does not require a finding of criminal intent.
|
v
|
Reasonable litigation expenses, including legal fees he or she incurs due to an investigation or proceeding conducted against him or her by an authority authorized to conduct such an investigation or proceeding, and which was ended without filing an indictment against him or her and without being subject to a financial obligation as a substitute for a criminal proceeding, or that was ended without filing an indictment against him, but with the imposition of a financial obligation, as a substitute for a criminal proceeding relating to an offence which does not require criminal intent, within the meaning of the relevant terms in the Companies Law.
|
v
|
Financial liability he or she incurs for payment to persons or entities harmed as a result of violations in Administrative Proceedings, as detailed in section 52(54)(A)(1)(a) of the Securities Law. For this purpose "Administrative Proceeding" shall mean a proceeding pursuant to Chapters H3 (Imposition of Monetary Sanction by the Israel Securities Authority), H4 (Imposition of Administrative Enforcement Means by the Administrative Enforcement Committee) or I1 (Settlement for the Avoidance of Commencing Proceedings or Cessation of Proceedings, Conditioned upon Conditions) of the Securities Law, as shall be amended from time to time.
|
v
|
Expenses that he or she incurs in connection with Administrative Proceedings (as defined above) he was involved in, including reasonable litigation fees, and including attorney fees.
|
v
|
Any other obligation or expense in respect of which it is permitted or will be permitted under law to indemnify a director or officer of Optibase.
|
|
v
|
a breach of the fiduciary duty, except for a breach of the fiduciary duty vis-à-vis the company with respect to indemnification and insurance if the director or officer acted in good faith and had a reasonable basis to believe that the act would not harm the company;
|
|
v
|
an intentional or reckless breach of the duty of care, except for if such breach was made in negligence;
|
|
v
|
an act done with the intention of unduly deriving a personal profit; or
|
|
v
|
a fine imposed on the directors or officers.
|
|
v
|
the maximum coverage amount under each policy shall not exceed the higher of: (i) US $10,000,000; or (ii) 25% of our shareholders equity based on our most recent financial statements at the time of approval by our compensation committee;
|
|
v
|
the maximum yearly premium to be paid by us for each policy shall not exceed 1% of the aggregate coverage of such policy;
|
|
v
|
the terms of the policy shall comply with our compensation policy for directors and officers; and
|
|
v
|
the purchase of the policy (including any renewal or extension) shall be approved by our compensation committee (and, if required by law, by our board of directors) which shall determine whether the coverage amount and the relevant premium sums are reasonable considering our exposures, the scope of coverage and market conditions and that the policy reflects the current market conditions, and it shall not materially affect our profitability, assets or liabilities.
|
|
(i)
|
the director holds an academic degree in one of these areas: economics, business administration, accounting, law or public administration;
|
|
(ii)
|
the director holds an academic degree or has other higher education, all in the main business sector of the company or in a relevant area for the board position; or
|
|
(iii)
|
the director has at least five years’ experience in one or more of the following or an aggregate five years’ experience in at least two or more of these: (a) senior management position in a corporation of significant business scope; (b) senior public office or senior position in the public sector; or (c) senior position in the main business sector of the company.
|
|
(i)
|
accounting issues and accounting control issues characteristic to the segment in which the company operates and to companies of the size and complexity of the company;
|
|
(ii)
|
the functions of the external auditor and the obligations imposed on such auditor;
|
|
(iii)
|
preparation of financial reports and their approval in accordance with the companies law and the securities law.
|
|
(i)
|
the majority of shares voted for the election includes the majority of the shares of non-controlling shareholders or with no personal interest excluding a personal interest not resulting from relation with controlling shareholders, voted at the meeting; or
|
|
(ii)
|
the total number of shares to total amount of shareholders listed in subsection (i) above, who voted against the election of the external director does not exceed two percent (2%) of the aggregate voting rights of the company.
|
Name of Beneficial Owner
|
No. of Ordinary Shares
Beneficially Owned
(1)
|
Percentage of Ordinary Shares Beneficially Owned
|
||||||
The Capri Family Foundation
(2)
|
3,725,055 | 72.82 | ||||||
Shareholding of all directors and officers as a group (7 persons)
(3)
|
279,087 | 5.35 |
Beneficial Owner –
|
Date of filing
|
No. Of Shares Beneficially Held
|
||||
Shlomo (Tom) Wyler
|
June 30, 2011
|
1,976,107 | * | |||
Shlomo (Tom) Wyler
|
November 21, 2012
|
159,218 | ** |
**
|
Excluding outstanding options to purchase 20,000 Ordinary Shares which have expired on December 16, 2011, and including 2,400 vested restricted shares.
|
Beneficial Owner –
|
Date of filing
|
No. Of Shares Beneficially Held
|
||||
Gesafi Real Estate S.A*
|
September 8, 2011
|
401,220 | ||||
Gesafi Real Estate S.A
|
August 12, 2011
|
488,220 | ||||
Gesafi Real Estate S.A
|
June 14, 2012
|
627,185 | ||||
Gesafi Real Estate S.A
|
November 21, 2012
|
1,127,185 | ||||
Gesafi Real Estate S.A
|
February 3, 2014
|
0 | ** |
*
|
To the best of our knowledge, 100% of the equity interest of Gesafi Real Estate S.A, or Gesafi, is held by The Capri Family Foundation, or Capri. The beneficiaries of Capri are the children of Mr. Shlomo (Tom) Wyler, the Chief Executive Officer of our subsidiary, Optibase Inc.
|
**
|
The information is based on Amendment No. 5 to Schedule 13D filed with the SEC on February 3, 2014, by Gesafi and Capri, pursuant to the powers of the councillors of Capri, Gesafi transferred 1,127,185 ordinary shares held by it to Capri without consideration, as follows: 5,000 ordinary shares on November 8, 2013, 8,000 ordinary shares on November 12, 2013 and 1,114,185 ordinary shares on November 19, 2013.
|
Beneficial Owner –
|
Date of filing
|
No. Of Shares Beneficially Held
|
||||
The Capri Family Foundation*
|
November 21, 2012
|
1,297,290 | ||||
The Capri Family Foundation
|
February 3, 2014
|
3,725,055 | ** |
*
|
To the best of our knowledge, the beneficiaries of The Capri Family Foundation are the children of Mr. Shlomo (Tom) Wyler, the Chief Executive Officer of our subsidiary, Optibase Inc.
|
**
|
The information is based on Amendment No. 5 to Schedule 13D filed with the SEC on February 3, 2014, by Gesafi and Capri, pursuant to the powers of the councillors of Capri, Gesafi transferred 1,127,185 ordinary shares held by it to Capri without consideration, as follows: 5,000 ordinary shares on November 8, 2013, 8,000 ordinary shares on November 12, 2013 and 1,114,185 ordinary shares on November 19, 2013. The additional 1,300,580 ordinary shares held by Capri were acquired by Capri on December 31, 2013 pursuant to the Flamingo Agreements and the Continuum Agreement, as described in Item 7.B. “Related Party Transactions” below, in order to effectuate the sale of 12 luxury condominium units located in Miami Beach, Florida to our subsidiaries.
|
|
(a)
|
First, to repay partners who loaned sums to other limited partners who defaulted on their capital contributions;
|
|
(b)
|
Second, to partners that have made voluntary loans to the Partnership;
|
|
(c)
|
Third, to repay the partners their capital contributions; and
|
|
(d)
|
Fourth, to the partners in accordance with their percentage interests in the Partnership.
|
Nasdaq
|
||||||||
Year
|
High
|
Low
|
||||||
2009
|
$ | 7.5 | $ | 4.65 | ||||
2010
|
$ | 8 | $ | 6 | ||||
2011
|
$ | 8.75 | $ | 4.95 | ||||
2012
|
$ | 6.45 | $ | 4.51 | ||||
2013
|
$ | 6.9 | $ | 4.51 | ||||
2012 | ||||||||
First Quarter
|
$ | 6.45 | $ | 5.25 | ||||
Second Quarter
|
$ | 6.4 | $ | 5.4 | ||||
Third Quarter
|
$ | 6.35 | $ | 5.4 | ||||
Fourth Quarter
|
$ | 6.45 | $ | 4.51 | ||||
2013 | ||||||||
First Quarter
|
$ | 6.25 | $ | 5.1 | ||||
Second Quarter
|
$ | 6 | $ | 4.51 | ||||
Third Quarter
|
$ | 6.54 | $ | 5.2 | ||||
Fourth Quarter
|
$ | 6.9 | $ | 5.4 | ||||
2014 | ||||||||
First Quarter
|
$ | 6.47 | $ | 5.25 | ||||
Second Quarter (Until April 28, 2014)
|
$ | 5.8 | $ | 5.15 | ||||
Most Recent Six Months
|
High
|
Low
|
||||||
October 2013
|
$ | 6.9 | $ | 5.74 | ||||
November 2013
|
$ | 6.8 | $ | 5.6 | ||||
December 2013
|
$ | 6.48 | $ | 5.4 | ||||
January 2014
|
$ | 6.03 | $ | 5.47 | ||||
February 2014
|
$ | 6.15 | $ | 5.8 | ||||
March 2014
|
$ | 6.47 | $ | 5.63 |
v
|
the avoidance of any conflict of interest between the director’s or officer’s position with the company and any other position he or she fulfills or with his or her personal affairs;
|
v
|
the avoidance of any act in competition with the company’s business;
|
v
|
the avoidance of exploiting any of the company’s business opportunities in order to gain a personal advantage for himself or for others; and
|
v
|
the disclosure to the company of any information and documentation relating to the company’s affairs obtained by the director or officer due to his or her position with the company.
|
v
|
broker-dealers,
|
v
|
financial institutions,
|
v
|
certain insurance companies,
|
v
|
investors liable for alternative minimum tax,
|
v
|
tax-exempt organizations,
|
v
|
non-resident aliens of the U.S. or taxpayers whose functional currency is not the U.S. dollar,
|
v
|
persons who hold the ordinary shares through partnerships or other pass-through entities,
|
v
|
investors that actually or constructively own 10 percent or more of our voting shares, and
|
v
|
investors holding ordinary shares as part of a straddle or a hedging or conversion transaction.
|
v
|
an individual who is a citizen or, a resident of the United States for U.S. federal income tax purposes;
|
v
|
a partnership, corporation or other entity created or organized in or under the laws of the United States or any political subdivision thereof;
|
v
|
an estate whose income is subject to U.S. federal income tax regardless of its source;
|
v
|
a trust if: (a) a court within the United States is able to exercise primary supervision over administration of the trust, and (b) one or more United States persons have the authority to control all substantial decisions of the trust; or
|
v
|
a trust, if the trust were in existence and qualified as a "United States person," within the meaning of the Code, on August 20, 1996 under the law as then in effect and elected to continue to be so treated.
|
|
·
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and asset dispositions;
|
|
·
|
provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
|
·
|
provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
|
2012
|
2013
|
|||||||
Audit fees
(1)
|
112 | 104 | ||||||
Audit-related fees
(2)
|
14 | -- | ||||||
Tax fees
(3)
|
-- | 61 | ||||||
All other fees
(4)
|
-- | -- | ||||||
Total
|
126 | 165 |
(1)
|
Audit fees consist of fees billed for the annual audit services engagement and other audit services, which are those services that only the external auditor can reasonably provide, and include the group audit; statutory audits; comfort letters and consents; attest services; and assistance with and review of documents filed with the SEC.
|
(2)
|
Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements or that are traditionally performed by the external auditor, and include consultations concerning financial accounting and reporting standards; internal control reviews of new systems, programs and projects; review of security controls and operational effectiveness of systems; review of plans and control for shared service centers, due diligence related to acquisitions; accounting assistance and audits in connection with proposed or completed acquisitions; and employee benefit plan audits.
|
(3)
|
Tax fees include fees billed for tax compliance services, including the preparation of original and amended tax returns and claims for refund; tax consultations, such as assistance and representation in connection with tax audits and appeals, tax advice related to mergers and acquisitions, transfer pricing, and requests for rulings or technical advice from taxing authority; tax planning services; and expatriate tax planning and services.
|
(4)
|
All other fees include fees billed for training; forensic accounting; data security reviews; treasury control reviews and process improvement and advice; and environmental, sustainability and corporate social responsibility advisory services.
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets
|
F-3 - F-4
|
Consolidated Statements of Operations
|
F-5
|
Consolidated Statements of Comprehensive Income
|
F-6
|
Statements of Changes in Shareholders’ Equity
|
F-7
|
Consolidated Statements of Cash Flows
|
F-8 - F-9
|
Notes to Consolidated Financial Statements
|
F-10 - F-41
|
Page
|
|
F-2
|
|
F-3 - F-4
|
|
F-5
|
|
F-6
|
|
F-7
|
|
F-8 - F-9
|
|
F-10 - F-41
|
Kost Forer Gabbay & Kasierer
3 Aminadav St.
Tel-Aviv 6706703, Israel
|
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
|
Tel-Aviv, Israel
|
KOST FORER GABBAY & KASIERER
|
April 29, 2014
|
A Member of Ernst & Young Global
|
December 31,
|
||||||||
2013
|
2012
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$ | 18,811 | $ | 19,142 | ||||
Restricted cash
|
144 | 134 | ||||||
Trade receivables
|
279 | 148 | ||||||
Other accounts receivable and prepaid expenses (Note 5)
|
138 | 217 | ||||||
Total assets attributed to discontinued operations (Note 1c)
|
675 | 980 | ||||||
Total
current assets
|
20,047 | 20,621 | ||||||
LONG-TERM INVESTMENTS:
|
||||||||
Long-term deposits (Note 9)
|
61 | 50 | ||||||
Investments in companies and associates (Note 6)
|
7,738 | 7,993 | ||||||
Total
long-term investments
|
7,799 | 8,043 | ||||||
PROPERTY AND OTHER ASSETS, NET
|
||||||||
Real Estate Property, net (Note 3)
|
209,761 | 194,826 | ||||||
Other assets, net (Note 4)
|
1,141 | 1,392 | ||||||
Total
property, equipment and other assets
|
210,902 | 196,218 | ||||||
Total
assets
|
$ | 238,748 | $ | 224,882 |
April 29, 2014
|
||||
Date of approval of the
|
Amir Philips
|
Alex Hilman
|
||
financial statements
|
Chief Executive Officer.
|
Executive Chairman of the board of directors
|
Year ended
December 31,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Fixed income from real estate rent
|
$ | 13,711 | $ | 13,676 | $ | 12,479 | ||||||
Costs and expenses:
|
||||||||||||
Cost of real estate operations
|
2,199 | 1,966 | 1,869 | |||||||||
Real estate depreciation and amortization
|
3,369 | 2,569 | 2,153 | |||||||||
General and administrative
|
1,870 | 2,068 | 3,057 | |||||||||
Total
costs and expenses
|
7,438 | 6,603 | 7,079 | |||||||||
Operating income
|
6,273 | 7,073 | 5,400 | |||||||||
Gain on bargain purchase (Note 1b(1))
|
- | - | 4,412 | |||||||||
Equity share in losses of associates, net
|
(172 | ) | (32 | ) | - | |||||||
Other income (loss) (Note 6)
|
384 | (100 | ) | - | ||||||||
Financial expenses, net (Note 12)
|
(1,343 | ) | (1,243 | ) | (7,481 | ) | ||||||
Income before taxes on income
|
5,142 | 5,698 | 2,331 | |||||||||
Taxes on income (Note 10)
|
1,518 | 1,643 | 481 | |||||||||
Net income from continuing operations
|
3,624 | 4,055 | 1,850 | |||||||||
Net loss from discontinued operations (Note 1c)
|
- | - | (51 | ) | ||||||||
Net income
|
3,624 | 4,055 | 1,799 | |||||||||
Net income attributable to non-controlling interest
|
2,159 | 2,478 | 2,038 | |||||||||
Net income (loss) attributable to Optibase LTD.
|
$ | 1,465 | $ | 1,577 | $ | (239 | ) | |||||
Net earnings (loss) per share:
|
||||||||||||
Basic and diluted net earnings (loss) per share from continuing operations
|
$ | 0.38 | $ | 0.41 | $ | (0.07 | ) | |||||
Basic and diluted net earnings (loss) per share
|
$ | 0.38 | $ | 0.41 | $ | (0.07 | ) | |||||
Weighted average number of shares used in computing
basic net earnings (loss) per share:
|
3,822,032 | 3,818,198 | 3,641,935 | |||||||||
Weighted average number of shares used in computing
diluted net earnings (loss) per share:
|
3,825,610 | 3,820,233 | 3,641,935 |
Year ended December 31,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Net income
|
$ | 3,624 | $ | 4,055 | $ | 1,799 | ||||||
Less: net earnings attributable to non-controlling interests
|
2,159 | 2,478 | 2,038 | |||||||||
Net earnings (loss) attributable to Optibase LTD.
|
1,465 | 1,577 | (239 | ) | ||||||||
Other comprehensive income:
|
||||||||||||
Change in foreign currency translation adjustment
|
1,477 | 1,172 | (305 | ) | ||||||||
Less: other comprehensive income (loss) attributable to non-controlling interests
|
624 | 491 | (131 | ) | ||||||||
Other comprehensive income (loss) attributable to Optibase LTD.
|
853 | 681 | (174 | ) | ||||||||
Comprehensive income
|
5,101 | 5,227 | 1,494 | |||||||||
Less: comprehensive income attributable to non-controlling interests
|
2,783 | 2,969 | 1,907 | |||||||||
Comprehensive income (loss) attributable to Optibase LTD.
|
$ | 2,318 | $ | 2,258 | $ | (413 | ) |
Ordinary
shares
|
Additional
paid-in
capital
|
Treasury
Shares
|
Accumulated
other comprehensive income (loss)
|
Accumulated
Deficit
|
Total
shareholders'
equity of Optibase Ltd.
|
Non-controlling interests
|
Total
shareholders'
equity
|
|||||||||||||||||||||||||
Balance as of January 1, 2011
|
$ | 650 | $ | 125,728 | $ | (1,074 | ) | $ | 479 | $ | (85,391 | ) | $ | 40,392 | $ | - | $ | 40,392 | ||||||||||||||
Issuance of ordinary shares
|
94 | 4,906 | - | - | - | 5,000 | - | 5,000 | ||||||||||||||||||||||||
Stock-based compensation related to options and unvested shares
|
- | 120 | - | - | - | 120 | - | 120 | ||||||||||||||||||||||||
Issuance of treasury shares upon vesting of shares
|
- | (20 | ) | 120 | - | (100 | ) | - | - | - | ||||||||||||||||||||||
Other comprehensive income
|
- | - | - | (174 | ) | - | (174 | ) | (131 | ) | (305 | ) | ||||||||||||||||||||
Non-controlling interests
|
- | - | - | - | - | - | 14,255 | 14,255 | ||||||||||||||||||||||||
Net income (loss)
|
- | - | - | - | (239 | ) | (239 | ) | 2,038 | 1,799 | ||||||||||||||||||||||
Balance as of December 31, 2011
|
744 | 130,734 | (954 | ) | 305 | (85,730 | ) | 45,099 | 16,162 | 61,261 | ||||||||||||||||||||||
Stock-based compensation related to options and unvested shares
|
- | 117 | - | - | - | 117 | - | 117 | ||||||||||||||||||||||||
Issuance of treasury shares upon vesting of shares
|
- | (27 | ) | 133 | - | (106 | ) | - | - | - | ||||||||||||||||||||||
Other comprehensive income
|
- | - | - | 681 | - | 681 | 491 | 1,172 | ||||||||||||||||||||||||
Non-controlling interests
|
- | - | - | - | - | - | (53 | ) | (53 | ) | ||||||||||||||||||||||
Net income
|
- | - | - | - | 1,577 | 1,577 | 2,478 | 4,055 | ||||||||||||||||||||||||
Balance as of December 31, 2012
|
744 | 130,824 | (821 | ) | 986 | (84,259 | ) | 47,474 | 19,078 | 66,552 | ||||||||||||||||||||||
Issuance of ordinary shares
|
244 | 6,909 | - | - | - | 7,153 | - | 7,153 | ||||||||||||||||||||||||
Stock-based compensation related to options and unvested shares
|
- | 118 | - | - | - | 118 | - | 118 | ||||||||||||||||||||||||
Issuance of treasury shares upon vesting of shares
|
- | (26 | ) | 133 | - | (107 | ) | - | - | - | ||||||||||||||||||||||
Other comprehensive income
|
- | - | - | 853 | - | 853 | 624 | 1,477 | ||||||||||||||||||||||||
Net income
|
- | - | - | - | 1,465 | 1,465 | 2,159 | 3,624 | ||||||||||||||||||||||||
Balance as of December 31, 2013
|
988 | 137,825 | (688 | ) | 1,839 | (82,901 | ) | 57,063 | 21,861 | 78,924 |
Year ended
December 31,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$ | 3,624 | $ | 4,055 | $ | 1,799 | ||||||
Loss from discontinued operations
|
- | - | 51 | |||||||||
Income from continued operation
|
$ | 3,624 | $ | 4,055 | $ | 1,850 | ||||||
Adjustments required to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
3,369 | 2,569 | 2,220 | |||||||||
Impairment of an investment in company
|
- | 100 | - | |||||||||
Stock-based compensation related to options and unvested shares
|
118 | 117 | 120 | |||||||||
Gain from a bargain purchase
|
- | - | (4,412 | ) | ||||||||
Decrease (Increase) in trade receivables
|
(134 | ) | 577 | 1,216 | ||||||||
Equity share in losses of associates, net
|
172 | 32 | - | |||||||||
Increase (decrease) in deferred tax liabilities
|
44 | 159 | (579 | ) | ||||||||
Increase (decrease) in other long-term liabilities
|
(1,254 | ) | (792 | ) | 3,319 | |||||||
Decrease in land lease liabilities
|
(91 | ) | (81 | ) | - | |||||||
Decrease in other accounts receivable and prepaid expenses
|
79 | 1,073 | 1,371 | |||||||||
Increase (decrease) in accrued expenses and other accounts payable
|
1,615 | (597 | ) | (3,200 | ) | |||||||
Net cash provided by continuing operations
|
7,542 | 7,212 | 1,905 | |||||||||
Net cash used in discontinued operations
|
(123 | ) | (427 | ) | (70 | ) | ||||||
Net cash provided by operating activities
|
7,419 | 6,785 | 1,835 | |||||||||
Cash flows from investing activities:
|
||||||||||||
Purchase of equipment
|
- | - | (5 | ) | ||||||||
Investment in short-term deposit
|
- | - | (1,065 | ) | ||||||||
Proceeds from (investment in) long-term lease deposits
|
(11 | ) | (5 | ) | 101 | |||||||
Investment in real estate property
|
(5,795 | ) | (210 | ) | (1,187 | ) | ||||||
Increase in restricted cash
|
(10 | ) | (3 | ) | (131 | ) | ||||||
Acquisition of Eldista, net (c)
|
- | - | (20,684 | ) | ||||||||
Proceeds from (Investments in) associates
|
83 | (8,025 | ) | - | ||||||||
Net cash used in investing activities
|
(5,733 | ) | (8,243 | ) | (22,971 | ) |
Year ended
December 31,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Cash flows from financing activities:
|
||||||||||||
Issuance of shares capital
|
- | - | 5,000 | |||||||||
Proceeds from long term bank loans
|
- | - | 106,441 | |||||||||
Repayment of long term bank loans
|
(2,580 | ) | (2,553 | ) | (91,847 | ) | ||||||
Repayment of loan to non-controlling interests
|
- | (53 | ) | (5,618 | ) | |||||||
Net cash provided by (used in) financing activities
|
(2,580 | ) | (2,606 | ) | 13,976 | |||||||
Exchange differences on balances of cash and cash equivalents
|
563 | 261 | (155 | ) | ||||||||
Increase (decrease) in cash and cash equivalents
|
(331 | ) | (3,803 | ) | (7,315 | ) | ||||||
Cash and cash equivalents at the beginning of the year
|
19,142 | 22,945 | 30,260 | |||||||||
Cash and cash equivalents at the end of the year
|
$ | 18,811 | $ | 19,142 | $ | 22,945 |
NOTE 1:-
|
GENERAL
|
|
a.
|
Optibase Ltd. ("the Company") was incorporated and commenced operations in 1990.
|
|
During 2009 the Company had entered into the fixed-income real estate sector after an acquisition of a commercial building in Switzerland.
|
|
b.
|
Acquisitions and investments in associates:
|
|
1.
|
Centre des Technologies Nouvelles in Geneva, Switzerlan:
|
|
NOTE 1:-
|
GENERAL (Cont.)
|
USD
|
||||
Cash paid for Eldista shares
|
$ | 40,559 | ||
Assets and liabilities acquired:
|
||||
Land
|
23,654 | |||
Building
|
137,797 | |||
Swap instrument
|
(392 | ) | ||
Mortgage loan
|
(92,705 | ) | ||
Rent settlements with tenants
|
(1,759 | ) | ||
Lease provision
|
(7,311 | ) | ||
In-place leases, net
|
1,124 | |||
Deferred tax liabilities
|
(15,282 | ) | ||
Other current net assets
|
(155 | ) | ||
Gain from a bargain purchase
|
(4,412 | ) | ||
Total purchase price
|
40,559 | |||
Less:
|
||||
Purchase price paid by non-controlling interests
|
(19,875 | ) | ||
Net purchase price
|
$ | 20,684 |
NOTE 1:-
|
GENERAL (Cont.)
|
|
2.
|
Two Penn Center Plaza in Philadelphia, Pennsylvania
:
|
|
3.
|
Texas Shopping Centers Portfolio:
|
NOTE 1:-
|
GENERAL (Cont.)
|
|
4.
|
Luxury Suite Condominium Miami, Florida:
|
|
5.
|
Condominium Units in Miami Beach, Florida:
|
|
c.
|
Sale of the Video Activity (Discontinued operations):
|
|
On March 16, 2010, the Company and its subsidiary, Optibase Inc., entered into an asset purchase agreement (the "Agreement") with Optibase Technologies Ltd. and Stradis Inc., wholly owned subsidiaries of S.A. Vitec (also known as Vitec Multimedia) (S.A. Vitec, Optibase Technologies Ltd. and Stradis Inc., collectively "Vitec") pursuant to which the Company sold to Vitec all of the assets and liabilities related to the Company's Video Solutions Business
(t
he "Video Activity") for an aggregate consideration of $ 8,000, subject to
c
ertain price adjustments and an earn-out mechanism pursuant to which 45% of Vitec's revenues
deriving from the Video Activity exceeding $ 14,000 in the year following the closing of the transaction, will be paid to the Company. Closing of the transaction occurred on July 1, 2010. In the year following the closing, the Company did not achieve the earn-out target and no additional consideration was received by the Company.
|
NOTE 1:-
|
GENERAL (Cont.)
|
December 31,
|
||||||||
2013
|
2012
|
|||||||
Assets:
|
||||||||
Other accounts receivable
|
$ | 675 | $ | 980 | ||||
Total assets
|
$ | 675 | $ | 980 | ||||
Liabilities:
|
||||||||
Other accounts payable and accrued expenses
|
$ | 2,135 | $ | 2,563 | ||||
Total liabilities
|
$ | 2,135 | $ | 2,563 |
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES
|
|
a.
|
Basis of presentation of the financial statements:
|
|
The preparation of financial statements in conformity with U.S generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
|
|
b.
|
Functional currency, presentation currency and foreign currency:
The functional currency of the Company is the U.S Dollar.
The functional
currencies
of Optibase's subsidiaries are CHF and U.S dollar. The Company has elected to use U.S dollar as its reporting currency for all years presented.
|
|
While the functional currency of the Company's subsidiaries in the United States is the U.S dollars, the functional currency of the subsidiaries in Switzerland is their lead currency, i.e. CHF. Since the Company's functional and reporting currency is the USD, the financial
statements
of Optibase Real Estate SARL and OPCTN S.A. whose functional currency has been determined to be CHF have been translated into U.S. dollars. Assets and liabilities of these subsidiaries are translated at the year-end exchange rates and their statement of operations items are translated using the actual exchange rates at the dates on which those items are recognized. Such translation adjustments are recorded as a separate component of accumulated other comprehensive income in shareholders' equity.
|
|
c.
|
Principles of consolidation:
|
|
d.
|
Non-controlling Interests:
|
|
Non-controlling interests generally represent the portion of equity that the Company does not own in those entities that it consolidates. The Company accounts for and reports its non-controlling
interests
in accordance with the provisions required under the Consolidation Topic of the FASB ASC 810. Non-controlling interests are separately presented within the equity section of the consolidated balance sheets. The amounts of consolidated net earnings attributable to the Company and to the non-controlling interests are presented on the consolidated statement of income.
|
|
e.
|
Cash equivalents:
|
|
Cash equivalents include short-term, highly liquid investments that are readily convertible to cash, with
original
maturities of three months or less at the date acquired.
|
|
f.
|
Property and equipment:
|
|
Real estate and equipment are stated at cost net of accumulated depreciation. Costs include those
related
to acquisition, including building improvements.
|
|
Depreciation
is
computed using the straight-line method over the estimated useful lives of the assets, as follows:
|
Years
|
||||
Building and buildings' improvements
|
20-63 |
|
g.
|
Long-lived assets including intangible assets:
|
|
The Company and its subsidiaries long-lived assets are reviewed for impairment in accordance with ASC 360,
"Property, Plant and Equipment"
, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount
of
an asset to the future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
|
|
The Company reviewed assets on a component-level basis, which is the lowest level of assets for which there are identifiable cash flows that can be distinguished operationally and for financial reporting purposes. The carrying amount of the asset group was compared with the
related
expected undiscounted future cash flows to be generated by those assets over the estimated remaining useful life of the primary asset. In cases where the expected future cash flows were less than the carrying amounts of the assets, those assets were considered impaired and written down to their fair values. Fair value was established based on discounted cash flows. As of December 31, 2012 and 2013, no impairment losses have been identified.
|
|
h.
|
Investments in companies:
Investments in non-marketable equity securities of companies in which the Company does not have control or the ability to exercise significant influence over their operation and financial policies are recorded at cost.
Management evaluates investments in non-marketable equity securities for evidence of other-than temporary declines in value. When relevant factors indicate a decline in value that is other-than temporary the Company recognizes an impairment loss for the decline in value. As for impairment charges recorded during 2012 see Note 6a.
|
|
i.
|
Investments in associates:
Associates are companies in which the Group has significant influence over the financial and operating policies without having control.
The investment in associates is accounted for using the equity method of accounting. Under the equity method, the investment in associates is accounted for in the financial statements at cost plus changes in the Group’s share of net assets, including other comprehensive income (loss), of the associates. The equity method is applied until the loss of significant influence or classification of the investment as non-current asset held-for-sale.
The accounting policy in the financial statements of the associates has been applied consistently and uniformly with the policy applied in the financial statements of the Group.
|
|
j.
|
Goodwill and bargain purchase gain:
|
|
k.
|
Intangibles assets:
|
|
l.
|
Derivative Instruments:
The Company accounts for derivatives and hedging based on ASC No. 815, "Derivatives and Hedging". ASC No. 815 requires the Company to recognize all derivatives on the balance sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, the Company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation. If the derivatives meet the definition of a hedge and are so designated, depending on the nature of the hedge, changes in the fair value of such derivatives will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value is recognized in earnings. As of December 31, 2012 and 2013, the Company had no outstanding hedging instruments. At times, it may use derivative instruments to manage exposure to variable interest rate risk. From time to time, the Company enters into interest rate swaps to manage its exposure to variable interest rate risk and treasury locks to manage the risk of interest rates rising prior to the issuance of debt. The Company generally enters into derivative instruments that qualify as cash flow hedges and it does not enter into derivative instruments for speculative purposes.
|
|
|
m.
|
Business Combinations:
The Company allocated the purchase price of acquired properties to land, building, intangible assets and other liabilities in accordance with the Business Combinations Topic of the FASB ASC 805-10. The Company allocated the initial purchase price of assets acquired (net tangible and identifiable intangible assets) and liabilities assumed based on their relative fair values at the date of acquisition. There are two categories of intangible assets to be considered:
(1) in-place leases; (2) above and below-market value of in-place leases. The aggregate value of other acquired intangible assets, consisting of in-place leases, is measured by the excess of (i) the purchase price paid for a property after adjusting existing in-place leases
to market rental rates over (ii) the estimated fair value of the property as-if-vacant, determined as set forth above. The value of in-place leases exclusive of the value of above-market and below-market in-place leases is amortized to depreciation expense over the estimated remaining term of the respective leases. The value of above-market and below-market in-place leases is amortized to rental revenue over the estimated remaining term of the leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be written off. Other than as discussed above, the Company has determined that our real estate properties do not have any other significant identifiable intangibles. The results of operations of acquired properties are included in our financial statements as of the dates they are acquired. The intangible assets and liabilities associated with property acquisitions are included in other assets and other liabilities in our consolidated balance sheets.
|
|
n.
|
Revenue recognition:
The Company generates revenues from fixed income real-estate derived from its buildings held through its subsidiaries in Switzerland (Rümlang and Geneva) and Miami FL.
Rental income includes minimum rents which are recognized on an accrual basis over the terms of the related leases on a straight-line basis. Lease revenue recognition commences when the lessee is given possession of the leased space and there are no contingencies offsetting the lessee's obligation to pay rent.
|
|
o.
|
Contingencies:
The Company periodically estimates the impact of various conditions, situations and/or circumstances involving uncertain outcomes to its financial condition and operating results. The Company accounts for contingent events as required by ASC 450
"Contingencies"
. ASC 450 defines a contingency as "an existing condition, situation, or set of circumstances involving uncertainty as to possible gain or loss to an enterprise that will ultimately be resolved when one or more future events occur or fail to occur". Legal proceedings are a form of such contingencies.
In accordance with ASC 450, accruals for exposures or contingencies are being provided when the expected outcome is probable. It is possible, however, that future results of operations for any particular quarter or annual period could be materially affected by changes in the Company's assumptions, the actual outcome of such proceedings or as a result of the effectiveness of the Company strategies related to these proceedings.
|
|
p.
|
Income taxes:
The Company and its subsidiaries account for income taxes in accordance with ASC Topic 740,
"Income Taxes"
("ASC 740"),
which prescribes the use of the liability method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company and its subsidiaries provide a valuation allowance, if necessary, to reduce deferred tax assets to amounts more likely than not to be realized.
ASC 740 clarifies the accounting for uncertainties in income taxes by establishing minimum standards for the recognition and measurement of tax positions taken or expected to be taken in a tax return. Under the requirements of ASC 740, the Company must review all of its tax positions and make a determination as to whether its position is more-likely-than-not to be sustained upon examination by regulatory authorities. If a tax position meets the more-likely–than-not standard, then the related tax benefit is measured based on a cumulative probability analysis of the amount that is more-likely-than-not to be realized upon ultimate settlement or disposition of the underlying issue. The Company policy is to accrue interest and penalties related to unrecognized tax benefits in its financial expenses.
|
|
q.
|
Concentrations of credit risk:
Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash and cash equivalents, accounts receivables and long-term lease deposits.
|
|
r.
|
Earnings (loss) per share:
|
|
s.
|
Accounting for stock-based compensation:
|
December 31,
|
||||
2011
|
||||
Dividend yield
|
0 | % | ||
Volatility
|
67 | % | ||
Risk free interest
|
0.9%-1.7 | % | ||
Expected term (years)
|
4.75 |
|
t.
|
Treasury Shares:
During the past years, the Company repurchased certain of its Ordinary shares on the open market and holds such shares as treasury shares. The Company presents the cost to repurchase treasury shares as a reduction from shareholders' equity. From time to time the Company reissues treasury shares under the stock purchase plan, upon exercise of option and upon vesting of restricted stock units. When treasury stock is reissued, the Company accounts for the re-issuance in accordance with ASC No. 505-30, "Treasury Stock" and charges the excess of the purchase cost, including related stock-based compensation expenses, over the re-issuance price to retained earnings. The purchase cost is calculated based on the specific identification method. In case the purchase cost is lower than the re-issuance price, the Company credits the difference to additional paid-in capital.
|
|
u.
|
Fair value of financial instruments:
The carrying amounts of the Company's financial instruments, including cash and cash equivalents, other accounts receivable, trade payables, other accounts payable, and accrued liabilities, approximate fair value because of their generally short-term maturities.
|
Level 1-
|
Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
Level 2-
|
Include other inputs that are directly or indirectly observable in the marketplace.
|
|
Level 3-
|
Unobservable inputs which are supported by little or no market activity.
|
v.
|
Comprehensive income:
|
|
w.
|
Accounting Pronouncements
|
NOTE 3:-
|
REAL ESTATE PROPERTY, NET
|
Land
|
Building
|
Condominium units
|
Currency translation adjustment
|
Total
|
||||||||||||||||
Cost:
|
||||||||||||||||||||
At January 1, 2012
|
$ | 26,486 | $ | 158,587 | $ | 9,413 | $ | 409 | $ | 194,895 | ||||||||||
Additions
|
- | 168 | 42 | 4,938 | 5,148 | |||||||||||||||
At December 31, 2012
|
26,486 | 158,755 | 9,455 | 5,347 | 200,043 | |||||||||||||||
Additions
|
- | 94 | 12,854 | 5,248 | 18,196 | |||||||||||||||
At December 31, 2013
|
26,486 | 158,849 | 22,309 | 10,595 | 218,239 | |||||||||||||||
Accumulated depreciation:
|
||||||||||||||||||||
At January 1, 2012
|
- | 2,666 | 45 | 11 | 2,722 | |||||||||||||||
Depreciation charge for the year
|
- | 2,149 | 262 | 84 | 2,495 | |||||||||||||||
At December 31, 2012
|
- | 4,815 | 307 | 95 | 5,217 | |||||||||||||||
Depreciation charge for the year
|
- | 2,861 | 231 | 169 | 3,261 | |||||||||||||||
At December 31, 2013
|
26,486 | 7,676 | 538 | 264 | 8,478 | |||||||||||||||
Real estate property, net:
|
||||||||||||||||||||
At December 31, 2013
|
$ | 26,486 | $ | 151,173 | $ | 21,771 | $ | 10,331 | $ | 209,761 | ||||||||||
At December 31, 2012
|
$ | 26,486 | $ | 153,940 | $ | 9,148 | $ | 5,252 | $ | 194,826 |
NOTE 4:-
|
OTHER ASSETS, NET
|
Above market value of in-place leases
|
Currency translation adjustment
|
Total
|
||||||||||
Cost:
|
||||||||||||
At January 1, 2012
|
$ | 1,784 | $ | 48 | $ | 1,832 | ||||||
Additions
|
- | 50 | 50 | |||||||||
At December 31, 2012
|
1,784 | 98 | 1,882 | |||||||||
Additions
|
- | 48 | 48 | |||||||||
At December 31, 2013
|
1,784 | 146 | 1,930 | |||||||||
Accumulated depreciation:
|
||||||||||||
At January 1, 2012
|
316 | 4 | 320 | |||||||||
Depreciation charge for the year
|
158 | 12 | 170 | |||||||||
At December 31, 2012
|
474 | 16 | 490 | |||||||||
Depreciation charge for the year
|
278 | 21 | 299 | |||||||||
At December 31, 2013
|
752 | 37 | 789 | |||||||||
Other assets, net:
|
||||||||||||
At December 31, 2013
|
$ | 1,032 | $ | 109 | $ | 1,141 | ||||||
At December 31, 2012
|
$ | 1,310 | $ | 82 | $ | 1,392 |
NOTE 4:-
|
OTHER ASSETS, NET (Cont.)
|
Year
|
Estimated amortization expenses
|
|||
2014
|
$ | 452 | ||
2015
|
242 | |||
2016
|
230 | |||
2017
|
198 | |||
2018 and thereafter
|
19 | |||
$ | 1,141 |
NOTE 5:-
|
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES
|
December 31,
|
||||||||
2013
|
2012
|
|||||||
Prepaid expenses
|
$ | 81 | $ | 160 | ||||
Income receivable
|
8 | 17 | ||||||
Others
|
49 | 40 | ||||||
$ | 138 | $ | 217 |
NOTE 6:-
|
INVESTMENTS IN COMPANIES AND ASSOCIATES
|
|
a.
|
The Company invested several amounts in Mobixell Networks Inc. (Mobixell), a privately held Company which was engaged in the design, development and marketing solutions for mobile rich media adaptation, optimization and delivery. The Company held 2.04% of Mobixell's shares on a fully diluted basis. During 2012 the Company's recorded impairments of $ 100 and impaired its entire investment in Mobixell following several financing rounds in which the Company did not participate. For further details please see note 14.
|
|
b.
|
During 2013, the Company acquired through its subsidiary beneficial interests in Two Penn Center Plaza in Philadelphia, Pennsylvania and in a Texas Shopping Center Portfolio for further details please see note 1 b(2) and 1 b(3) respectively
|
NOTE 7:-
|
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES
|
December 31,
|
||||||||
2013
|
2012
|
|||||||
Employees and payroll accruals
|
$ | 207 | $ | 176 | ||||
Accrued expenses
|
1,903 | 1,350 | ||||||
Government (mainly tax provision)
|
2,344 | 1,710 | ||||||
Advance rent payments
|
483 | 45 | ||||||
Tenant security deposits
|
138 | 138 | ||||||
Other
|
56 | 57 | ||||||
$ | 5,131 | $ | 3,476 |
NOTE 8:-
|
LONG TERM LOANS
|
|
a.
|
On October 29, 2009, Optibase SARL received a mortgage loan ("the Loan") from a financial institution in Switzerland, in the amount of CHF 18,800 for the purpose of purchasing the real estate property located in Rümlang, Switzerland ("the Property"). The loan bears a variable interest rate based on current money and capital markets in Switzerland plus the bank's customary margins (0.8%). The financial institution may increase margin at any time if creditworthiness of the borrower or quality of the property is impaired. Principal and interest of the loan are payable quarterly. The mortgage loan may be repaid at any time with a three months prior written notice by the Company. The mortgage loan is governed by the laws of Switzerland and bears other terms and conditions customary for that type of mortgage loans
.
The Company pledged to the bank the property and all accounts and assets of the Company's subsidiary which are deposited with the bank against the loan received. The Company is required to meet certain covenants under this mortgage loan. As of December 31, 2013, the Company met these covenants.
Maturities of the loan by years are as follows:
|
Year ended December 31,
|
||||
2014 (current maturity)
|
$ | 422 | ||
Long-term portion
:
|
||||
2015
|
422 | |||
2016
|
422 | |||
2017
|
422 | |||
2018
|
422 | |||
2019 and thereafter
|
17,322 | |||
$ | 19,010 |
NOTE 8:-
|
LONG TERM LOANS (Cont.)
|
|
b.
|
On September, 2010, Eldista was granted a mortgage loan from a financial institution in Switzerland, in the amount of CHF 85,250 for the purpose of purchasing its real estate property located in Geneva, Switzerland. The Company pledged to the bank the property and all accounts and assets of the Company's subsidiary which are deposited with the bank against the loan received.
|
Year ended December 31,
|
||||
2014 (current maturity)
|
$ | 2,247 | ||
Long-term portion
:
|
||||
2015
|
2,247 | |||
2016
|
2,247 | |||
2017
|
2,247 | |||
2018
|
2,247 | |||
2019 and thereafter
|
97,074 | |||
$ | 106,062 |
NOTE 9:-
|
COMMITMENTS AND CONTINGENT LIABILITIES
|
|
a.
|
Lease commitments:
|
2014
|
56 | |||
2015
|
47 | |||
$ | 103 |
|
b.
|
Guarantees:
|
|
c.
|
Assets pledged as collateral:
|
|
d.
|
Office of the Chief Scientist and European Commission commitments:
|
NOTE 9:-
|
COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)
|
|
e.
|
Legal claim and
contingent liabilities:
|
NOTE 9:-
|
COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)
|
NOTE 9:-
|
COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)
|
|
1.
|
Personal Claim against Adv. Doron Afik:
|
NOTE 10:-
|
TAXES ON INCOME
|
a.
|
Corporate tax rates:
|
Year ended December 31,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Luxemburg
|
29 | % | 29 | % | 29 | % | ||||||
Switzerland
|
24 | % | 24 | % | 24 | % | ||||||
United States
|
34 | % | 35 | % | 34 | % |
|
b.
|
Tax assessments:
The Company has final tax assessments through the tax year 2008.
|
|
c.
|
Deferred tax assets and liabilities:
Deferred tax assets and liabilities deriving from the acquisition of a building complex in Geneva in 2011 (see details in Note 1b (1)). The deferred taxes are computed at the average tax rate of 24%, based on the corporate income tax in Switzerland, which is the tax rate that will be in effect when the differences are expected to reverse.
|
NOTE 10:-
|
TAXES ON INCOME (Cont.)
|
December 31,
|
||||||||
2013
|
2012
|
|||||||
Deferred tax assets:
|
||||||||
Lease provision
|
$ | 1,769 | $ | 1,749 | ||||
Swap instrument
|
390 | 682 | ||||||
Mortgage loan
|
246 | 245 | ||||||
Deferred tax assets
|
2,405 | 2,676 | ||||||
Deferred tax liabilities:
|
||||||||
Land
|
(5,931 | ) | (5,770 | ) | ||||
Building
|
(12,016 | ) | (11,834 | ) | ||||
Other assets, net
|
(273 | ) | (334 | ) | ||||
Deferred tax liabilities
|
(18,220 | ) | (17,938 | ) | ||||
Deferred tax liabilities, net
|
$ | (15,815 | ) | $ | (15,262 | ) |
|
d.
|
Net operating losses carry-forward:
|
NOTE 10:-
|
TAXES ON INCOME (Cont.)
|
|
e.
|
Reconciliation of the theoretical tax expenses to the actual tax expenses:
|
Year ended
December 31,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Income (loss) before taxes as reported
|
$ | 5,142 | $ | 5,698 | $ | 2,331 | ||||||
Theoretical tax benefit computed at the statutory rate (24%, 25% and 25% for the years 2011, 2012 and 2013, respectively)
|
$ | 1,286 | $ | 1,424 | $ | 560 | ||||||
Differences in tax rates on income deriving from foreign subsidiaries
|
(170 | ) | (54 | ) | 42 | |||||||
Gain derived from bargain purchase
|
- | - | (1,059 | ) | ||||||||
Tax adjustments in respect of currency translation
|
(160 | ) | (305 | ) | 154 | |||||||
Deferred taxes on losses and other temporary differences for which valuation allowance was provided
|
223 | 324 | 626 | |||||||||
Settlement of prior years tax assessments
|
- | 41 | ||||||||||
Other non-deductible expenses
|
339 | 254 | 117 | |||||||||
Income tax expense
|
$ | 1,518 | $ | 1,643 | $ | 481 |
|
f.
|
Income (loss) before taxes on income consists of the following:
|
Year ended
December 31,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Domestic
|
$ | 328 | $ | (810 | ) | $ | (3,138 | ) | ||||
Foreign
|
4,814 | 6,508 | 5,469 | |||||||||
$ | 5,142 | $ | 5,698 | $ | 2,331 |
NOTE 10:-
|
TAXES ON INCOME (Cont.)
|
|
g.
|
Income tax expenses are comprised as follows:
|
Year ended
December 31,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Current
|
$ | 1,397 | $ | 1,537 | $ | 863 | ||||||
Deferred
|
121 | 106 | (382 | ) | ||||||||
$ | 1,518 | $ | 1,643 | $ | 481 | |||||||
Domestic
|
$ | - | $ | - | $ | - | ||||||
Foreign
|
1,518 | 1,643 | 481 | |||||||||
$ | 1,518 | $ | 1,643 | $ | 481 |
|
h.
|
As of December 31, 2012 and 2013 the Company has no liability for unrecognized income tax benefits, and there was no change in its liability for unrecognized income tax benefits during all years presented.
|
NOTE 11:-
|
SHAREHOLDERS' EQUITY
|
|
a.
|
General:
|
|
1.
|
The Ordinary shares of the Company are traded on the NASDAQ Global Market since April 1999.
|
|
2.
|
On August 16, 2012, and following the approval of the Company’s board of directors, the Company shareholders approved a one-for-five reverse share split of the Company’s ordinary shares, (" Reverse Share Split"). The Reverse Share Split was effective on September 27, 2012 and reduced the Company’s ordinary shares as of that day to a 6,000,000 and 3,882,945 shares authorized and issued respectively. The exercise price and the number of shares issuable pursuant to our outstanding options have been adjusted pursuant to the terms of such instruments in connection with the Reverse Share Split. No fractional ordinary shares were issued in connection with the Reverse Share Split, and all such fractional shares were rounded to the nearest whole number of ordinary shares.
|
NOTE 11:-
|
SHAREHOLDERS' EQUITY (Cont.)
|
|
3
|
On May 5, 2011, following the receipt of the approval of the Company's shareholders on March 30, 2011, the Company completed a private placement of 2,500,000 ordinary shares of the Company to Mr. Shlomo (Tom) Wyler, currently the Chief Executive Officer of our subsidiary Optibase Inc. formerly president and director of the Company, who is affiliated with the controlling shareholder of the Company, in consideration for $ 5,000.
|
|
4.
|
On December 31, 2013, following the approval of the Company board of directors and the approval of the Company shareholders the Company (see note 1 b(5) issued a net sum of 1,300,580 ordinary shares in consideration for the purchase of twelve luxury condominium units in Miami Beach, Florida from a private companies indirectly controlled by Capri, The Company's controlling shareholder.
|
|
b.
|
Stock options:
|
NOTE 11:-
|
SHAREHOLDERS' EQUITY (Cont.)
|
Year ended
December 31, 2013
|
||||||||||||
Weighted
|
||||||||||||
average
|
||||||||||||
Amount
|
Weighted average exercise price
|
Remaining contractual term (years)
|
||||||||||
Outstanding at the beginning of the year
|
127,000 | $ | 9.76 | 4.59 | ||||||||
Granted
|
- | |||||||||||
Forfeited
|
(3,000 | ) | $ | 15.8 | ||||||||
Outstanding at the end of the year
|
124,000 | $ | 9.61 | 3.68 | ||||||||
Exercisable options at the end of the year
|
91,587 | $ | 9.49 | 3.32 | ||||||||
Options vested and expected to vest at end of year
|
158,127 | $ | 10.68 | 2.29 |
|
c.
|
Non-vested shares:
|
NOTE 11:-
|
SHAREHOLDERS' EQUITY (Cont.)
|
Nonvested shares
|
Shares
|
Weighted average grant date fair value
|
||||||
Non-vested at January 1, 2013
|
6,000 | $ | 6.05 | |||||
Granted
|
4,000 | $ | 5.79 | |||||
Exercised
|
(4,000 | ) | $ | 6.37 | ||||
Non-vested at December 31, 2013
|
6,000 | $ | 5.66 |
|
d.
|
The total equity-based compensation expense related to all of the Company's equity-based awards, recognized for the years ended December 31, 2011, 2012 and 2013, was comprised as follows:
|
Year ended
December 31,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
General and administrative
|
$ | 118 | $ | 117 | $ | 120 |
NOTE 12:-
|
SELECTED STATEMENT OF OPERATIONS DATA
|
|
a.
|
Financial income (expenses):
|
Year ended
December 31,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Financial income:
|
||||||||||||
Interest
|
$ | 7 | $ | 44 | $ | 35 | ||||||
Foreign currency translation adjustments
|
- | 130 | - | |||||||||
Remeasurement of derivatives
|
1,223 | 811 | - | |||||||||
1,230 | 985 | 35 | ||||||||||
Financial expenses:
|
||||||||||||
Interest
|
(2,486 | ) | (2,228 | ) | (3,081 | ) | ||||||
Foreign currency translation adjustments
|
(87 | ) | - | (334 | ) | |||||||
Remeasurement of derivatives
|
- | - | (4,101 | ) | ||||||||
(2,573 | ) | (2,228 | ) | (7,516 | ) | |||||||
$ | (1,343 | ) | $ | (1,243 | ) | $ | (7,481 | ) |
NOTE 13:-
|
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|
a.
|
Controlling shareholders:
|
NOTE 13:-
|
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS (Cont.)
|
b.
|
Related party transactions:
|
|
1.
|
On May 5, 2011, following the receipt of the approval of the Company's shareholders on March 30, 2011, the Company completed a private placement of 2,500,000 ordinary shares of the Company to Mr. Shlomo (Tom) Wyler, currently the Chief Executive Officer of the Company's subsidiary Optibase Inc., formerly president and director of the Company, who is affiliated with the controlling shareholder of the Company, in consideration for $ 5,000.
|
|
2.
|
On October 12, 2012, following the approval of the Company audit committee and board of directors, and the approval of the company's shareholders during an annual general meeting of our shareholders held on August 16, 2012, the Company wholly-owned subsidiary, Optibase 2 Penn, LLC, became a limited partner of 2 Penn Philadelphia LP, a Pennsylvania limited partnership, or the Partnership, which acquired an approximately 20% beneficial interest in the owner of a Class A 20-story commercial office building in Philadelphia known as Two Penn Center Plaza, or the 2 Penn Property, and entered into the Limited Partnership Agreement of the Partnership, or the 2 Penn LPA. The general partner of the partnership and certain other limited partners of the Partnership, are persons or entities affiliated with Mr. Shlomo (Tom) Wyler, currently the Chief Executive Officer of our subsidiary, Optibase Inc, formerly the Company's president and member of our board of directors and considered the controlling shareholder of the Company.
|
|
3.
|
On December 31, 2013, following the approval of the Company's audit committee, board of directors and the Company's shareholders, the Company, through its subsidiary Optibase Inc., completed the purchase of 12 residential units in Flamingo South Beach One Condominium and the Continuum on South Beach Condominium, both located in Miami Beach, Florida from a private companies indirectly controlled by the Company's controlling shareholder (the "seller") for an aggregate net consideration of $7,153 following the off set of rental income of one unit for a period of 3 years to the seller, representing the fair value of 1.31 million new ordinary shares of the Company issued to the seller as of the closing date.
|
NOTE 14:-
|
SUBSEQUENT EVENTS
|
|
a.
|
Following the Court's ruling, the Company and Vitec, with consent, instructed
the
court's treasury
and
ADAD Trust Company Ltd. to release
$200 and
$1,000
,
respectively, deposited
as Escrow Funds
. On March 20, 2014, the funds were released and a net sum of $715 was transferred to the Company.
See note 9 e (1).
|
|
b.
|
All the Company's holdings in Mobixell were sold to FN without consideration in January 2014, since Mobixell entered into a share acquisition agreement with Flash Networks Ltd. (FN).
|
Exhibit Number
|
Description of Document
|
1.1
|
Amended and Restated Memorandum of Association of Optibase Ltd. (incorporated by reference to Exhibit 3.1 to the Registrant's Report on Form 6-K dated February 15, 2002).
|
1.2*
|
Amended and Restated Articles of Association of Optibase Ltd.
|
4.1
|
Form of Letter of Indemnification between Optibase, Inc. and its directors and officers (incorporated by reference to Exhibit 4.9 to the Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 2002).
|
4.2
|
1999 Israel Share Option Plan, as amended (incorporated by reference to exhibits filed with the Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 1999).
|
4.3
|
1999 U.S. Share Option Plan, as amended (incorporated by reference to exhibits filed with the Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 1999).
|
4.4
|
102 Plan (incorporated by reference to exhibits filed with the Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 1999).
|
4.5
|
Employee Stock Purchase Plan (incorporated by reference to exhibits filed with the Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 1999).
|
4.6
|
2003 Amendment to the 1999 Israel Share Option Plan (incorporated by reference to Exhibit 4.(c).9 to the Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 2003).
|
4.7
|
2006 Israeli Incentive Compensation Plan (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on From S-8 (File no. 333-137644)).
|
4.8
|
"Flamingo/South Beach I Condominium Purchase Agreement" between Optibase FMC, LLC and Red Headed Amazon, LLC dated November 19, 2013 (incorporated by reference to Exhibit 99.13 to Amendment No. 5 to Schedule 13D filed with the SEC on February 3, 2014 by The Capri Family Foundation).
|
4.9
|
"Flamingo/South Beach I Condominium Purchase Agreement" between Optibase FMC, LLC and ISU Properties, L.P. dated November 19, 2013 (incorporated by reference to Exhibit 99.14 to Amendment No. 5 to Schedule 13D filed with the SEC on February 3, 2014 by The Capri Family Foundation).
|
4.10
|
"'AS IS' Residential Contract For Sale And Purchase" between Optibase Real Estate Miami, LLC and ISU Properties, L.P. dated November 19, 2013 (incorporated by reference to Exhibit 99.15 to Amendment No. 5 to Schedule 13D filed with the SEC on February 3, 2014 by The Capri Family Foundation).
|
4.11
|
Optibase Ltd. Compensation Policy for Executive Officers and Directors (incorporated by reference to Annex D to the Registrant's Report on Form 6-K dated November 13, 2013).
|
4.12*
|
Service Agreement Between Optibase Ltd. and Mr. Reuwen Schwarz, dated November 1, 2013.
|
8.1*
|
List of the subsidiaries of Optibase Ltd.
|
11.1
|
Code of Business Conduct and Ethics (incorporated by reference to Exhibit 11.1 to the Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 2010).
|
12.1*
|
Certification by Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
12.2*
|
Certification by Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
13.1*
|
Certification by Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
13.2*
|
Certification by Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
15.1*
|
Consent of Kost, Forer Gabbay & Kasierer, a member of Ernst & Young Global.
|
101*
|
The following financial information from Optibase Ltd.'s Annual Report on Form 20-F for the year ended December 31, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2013 and 2012; (ii) Consolidated Statements of Operations for the years ended December 31, 2013, 2012 and 2011; (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012 and 2011; (iv) Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2013, 2012 and 2011; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011; and (vi) Notes to Consolidated Financial Statements.
|
Paragraph
|
Subject
|
Page
|
||
1.
|
Introduction
|
3
|
||
2.
|
Public Company
|
5
|
||
3.
|
The Company's Purpose
|
5
|
||
4.
|
The Company's Objects
|
5
|
||
5.
|
Limitation of Liability
|
5
|
||
6.
|
The Share Capital
|
5
|
||
7.
|
The Issue of Shares and Other Securities and the repurchase of shares
|
6
|
||
8.
|
Calls for Payment
|
7
|
||
9.
|
The Company's Register of Shareholders and the Issue of Share Certificates
|
8
|
||
10.
|
Transfer of the Company's Shares
|
9
|
||
11.
|
Lien
|
12
|
||
12.
|
Alterations to the Share Capital
|
12
|
||
13.
|
The General Meeting's Powers
|
14
|
||
14.
|
Annual and Special General Meetings and Class Meetings
|
15
|
||
15.
|
Convening of General Meetings
|
16
|
||
16.
|
The General Meeting's Agenda
|
17
|
||
17.
|
The Discussion at General Meetings
|
18
|
||
18.
|
Voting by Shareholders
|
19
|
||
19.
|
The Appointment of a Proxy
|
22
|
||
20.
|
Voting Instrument
|
24
|
21.
|
The Board of Directors' Powers
|
27
|
22.
|
The Appointment of Directors and Termination of Their Office
|
27
|
23.
|
The Directors' Acts
|
31
|
24.
|
Board of Directors' Committees
|
35
|
25.
|
The Board of Directors' Chairman
|
35
|
26.
|
The General Manager
|
36
|
27.
|
Secretary, Internal Auditor and Other Officials in the Company
|
39
|
28.
|
Auditor
|
39
|
29.
|
Permitted Distribution
|
40
|
30.
|
Dividend and Bonus Shares
|
41
|
31.
|
Purchase of the Company's Shares
|
44
|
32.
|
Insurance of Officers
|
45
|
33.
|
Indemnity of Officers
|
45
|
34.
|
Exemption of Officers
|
47
|
35.
|
Insurance, Exemption and Indemnity - General
|
47
|
36.
|
Merger
|
48
|
37.
|
[Reserved]
|
48
|
38.
|
Winding Up
|
48
|
39.
|
The Sale of the Company's Assets
|
48
|
40.
|
Notices
|
49
|
1.
|
Introduction
|
|
1.1
|
In these articles, each of the following expressions shall bear the meanings set forth alongside them:
|
|
"shareholder"
– any person to whose credit a share is registered with a member of the Stock Exchange (as defined in the Companies Law) and such share is included among the shares registered in the shareholders register of the Company in the name of a registration Company, or a person registered as a shareholder in the Company's register of shareholders;
|
|
"financial statements"
- the financial statements which the Company must prepare pursuant to the law;
|
|
"periodic report"
- as defined in Chapter Two of the Securities (Periodic and Immediate Reports), Regulations 5730-1970 or any securities regulations replacing them;
|
|
"law"
- the provisions of any law prevailing in the State of Israel;
|
|
"director"
- as defined in section 1 of the Companies Law, including an alternate or attorney;
|
|
"the Companies Law"
- the Companies Law, 5759-1999;
|
|
"the Securities Law"
- the Securities Law, 5728-1968;
|
|
"business day"
- Sundays to Thursdays, other than religious and public holidays in the State of Israel;
|
|
"writing"
- print and any other form of printing words, including documents sent in writing by facsimile, cable, telex, e-mail, computer or through any other electronic media, which creates or enables the creation of a copy and/or printout of the document;
|
|
"office"
- the Company's registered office;
|
|
"securities"
- shares, debentures, capital notes, securities convertible into shares and rights to any of the aforegoing, issued by the Company;
|
|
"the Companies Ordinance"
- the Companies Ordinance (New Version), 5743-1983;
|
|
"ordinary majority"
- a majority of more than half the votes of the shareholders entitled to vote and voting themselves, by proxy or through a voting instrument;
|
|
"special majority"
- a majority of more than three quarters of the votes of the shareholders entitled to vote and voting themselves, by proxy or through a voting instrument;
|
|
"articles"
- the Company's articles as formulated herein or as altered, expressly or pursuant to the law;
|
|
"the Companies Regulations"
- regulations promulgated by virtue of the authority granted pursuant to the Companies Law;
|
|
"Securities Regulations"
- regulations promulgated by virtue of the authority granted pursuant to the Securities Law.
|
|
"person" or "persons"-
Including a corporation.
|
|
"year" and "month"-
a Gregorian month or year.
|
|
1.2
|
The provisions of sections 3-10 of the Interpretation Law, 5741-1981 shall also apply, mutatis mutandis, to the interpretation of the articles, if there is no provision to the contrary or unless the context otherwise admits.
|
|
Save as provided in this paragraph, every word and expression herein shall bear the meaning designated to them in the Companies Law, and if none - the meaning designated to them in the Companies Regulations, and if none - the meaning designated to them in the Securities Law, and if none - the meaning designated to them in the Securities Regulations, and if none - the meaning designated to them in any other law, unless the context otherwise admits.
|
|
Where these articles refer to any legal provision and such provision is amended or cancelled, the said provision shall be deemed valid and as part of the articles, unless such is prohibited by the law.
|
|
The headings in these articles are meant for the purpose of convenience only and shall not be used for the interpretation of these articles
|
|
Provisions of the Companies Law which are dispositive shall apply to the Company, to the extent that it is not otherwise provided in these articles and to the extent that there is no contradiction between them and between the provisions of these articles.
|
|
1.3
|
Amendment
If a resolution to amend these articles is recommended by the Board of Directors, such recommended resolution’s adoption in a General Meeting requires a simple majority. In any other case a resolution adopted in a General Meeting approved by a special majority is required to approve any amendment of these articles.
|
2.
|
Public Company
|
|
The Company is a "public company" as defined in section 1 of the Companies Law.
|
3.
|
The Company's Purpose
|
|
The Company's purpose is according to its Amended and Restated Memorandum of Association. If the memorandum is silent with regard to the Company’s purpose, than it will act pursuant to business considerations to make profits; however, the Company may contribute a reasonable amount for an appropriate cause, even if the contribution is not within the framework of the said business considerations.
|
4.
|
The Company's Objects
|
|
The Company shall engage in any Lawful business.
|
5.
|
Limitation of Liability
|
|
The liability of the Company's shareholders is limited, each to payment of the full amount which he undertook to pay for the shares allotted to him at the time of the allotment.
|
6.
|
The Share Capital
|
|
6.1
|
The Company's authorised share capital is NIS 3,900,000 divided into 6,000,000 ordinary shares of NIS 0.65 par value each (hereinafter referred to as "share", "ordinary share", "shares" or "ordinary shares", as the case may be).
The Company may alter the authorised share capital in accordance with the provisions of the Companies Law and of these articles.
|
|
6.2
|
Each share vests a right to receive invitations, to participate in and vote at the general meetings. A shareholder shall have one vote for each share held by him.
|
|
6.3
|
All the shares rank pari passu in relation to the amounts of capital paid or credited as paid on their nominal value, in connection with dividend, the distribution of bonus shares and any other distribution, return of the capital and participation in a distribution of the Company's surplus assets on winding up.
|
|
6.4
|
The provisions of these articles in respect of shares shall also apply to other securities issued by the Company, mutatis mutandis.
|
7.
|
The Issue of Shares and Other Securities and the repurchase of shares
|
|
7.1
|
The Company's board of directors may issue shares and other securities of the Company, up to the limit of the Company's authorised share capital. If the Company's share capital includes a number of classes of shares and securities, shares and securities exceeding the limit of the authorised share capital of such class shall not be issued. In such regard, securities convertible or exercisable into shares shall be deemed to have been converted or exercised on the date of their issue.
|
|
7.2
|
The Company's board of directors may issue redeemable securities, with such rights and on such conditions as the board of directors prescribes.
|
|
7.3
|
Subject to the provisions of the articles and the provisions of the Companies Law, the board of directors may allot shares to any person with restrictions and conditions, for their nominal value, with a discount or with a premium, as it deems fit.
|
|
7.4
|
The Company's board of directors may resolve to issue a series of debentures within the framework of its authority to borrow on the Company's behalf, and within the limits of such authority. The aforegoing does not negate the authority of the general manager or someone authorised by him to borrow on the Company's behalf, to issue debentures, promissory notes and bills of exchange, within the limits prescribed by the board of directors.
|
|
7.5
|
The Company's existing shareholders shall not have a right of pre-emption, preferred right or any other right to purchase the Company's securities. The board of directors may, in its exclusive discretion, first offer the Company's securities to the existing shareholders or some of them.
|
|
7.6
|
The Company may pay any person commission in consideration for the underwriting, marketing or distribution of the Company's securities, conditionally or unconditionally, on such terms and conditions as the board of directors prescribes. Such payments may be made in cash or securities of the Company, or partly in one way and partly in another.
|
|
7.7
|
The Company may at any time and from time to time, subject to the Companies Law, purchase back or finance the purchase of any shares or other securities issued by the Company, in such manner and under such terms as the Board of Directors shall determine, whether from any one or more shareholders. Such purchase shall not be deemed as payment of dividends and no security holder will have the right to require the Company to purchase his securities or offer to purchase securities from any other security holders.
|
8.
|
Calls for Payment
|
|
8.1
|
If pursuant to the conditions of an allotment of shares there is no fixed date for the payment of any part of the price payable for them, the board of directors may from time to time make calls upon the shareholders in respect of the monies not yet paid in relation to the shares held by them (hereinafter referred to as “calls" or "call", as the case may be).
|
|
8.2
|
The call shall determine the date by which the amount specified therein must be paid, together with interest, linkage and the expenses incurred as a result of the non-payment, at the rates and in the amounts prescribed by the board of directors. Such date shall not be less than 14 days from the date of the call.
|
|
The call shall also specify that in the event of non-payment by the date fixed as required, the shares in relation to which the call is being made are likely to be forfeited. If a shareholder does not comply with the call, any share in relation to which the said call has been made may be forfeited at any time thereafter, pursuant to the board of directors' resolution. Share forfeitures shall include all the dividends on such shares which have not been paid prior to the forfeiture, even if declared.
|
|
8.3
|
Any amount which pursuant to a share's allotment conditions is payable at the time of the allotment or at a fixed time, on account of the amount of the share or for premium, shall be deemed in respect of the articles a call duly made and notified, and the payment date is the date fixed for payment. In the event of non-payment, all the paragraphs of the articles dealing with the payment of interest, linkage and expenses, the forfeiture of shares and the like and all the other paragraphs hereof relating to the matter shall apply as though the said amount had been duly called and notified.
|
|
8.4
|
The board of directors may distinguish between the shareholders in relation to the amounts of the calls and/or their payment times.
|
|
8.5
|
Joint holders of a share shall be jointly and severally liable for payment of the calls made on such share.
|
|
8.6
|
Any payment on account of a share shall first be attributed on account of the nominal value and only thereafter on account of the premium in respect of any share.
|
|
8.7
|
A call may be cancelled or postponed to another date, as resolved by the board of directors. The board of directors may waive all or any of the interest, linkage and expenses.
|
|
8.8
|
The board of directors may accept from a shareholder willing to pay in advance payments on account of his shares in addition to amounts actually called, and the board of directors may pay such shareholder interest on the amounts paid in advance as aforesaid, or on such part thereof as exceeds the amount called on account of the shares, in relation to which the payment was made in advance, or come to any other arrangement with him which is such as to compensate him for the advance payment.
|
|
8.9
|
A shareholder shall not be entitled to his rights as shareholder, including dividend, unless he has paid all the amounts detailed in the calls made on him, together with interest, linkage and expenses, if any, unless otherwise prescribed by the board of directors.
|
|
8.10
|
The board of directors may sell, re-allot or otherwise transfer any share forfeited in such manner as it resolves, including without consideration, provided that the Company is paid the full nominal value in respect of such share.
|
|
8.11
|
The board of directors may, at any time prior to selling or otherwise transferring the forfeited share, cancel the forfeiture on such conditions as it resolves.
|
|
8.12
|
A shareholder whose shares have been forfeited shall, notwithstanding the forfeiture, be liable to pay the Company all the calls not paid in relation to such shares prior to the forfeiture, together with interest, linkage and expenses up to the date of the payment as though the shares had not been forfeited, and to comply with all the other claims and demands enforceable by the Company in relation to the shares up to the date of the forfeiture, without a deduction or discount for the value of the shares on the date of the forfeiture. His obligation shall only come to an end after the Company has received the full payment specified at the time of the shares' issue.
|
|
8.13
|
The board of directors may collect the calls not paid in respect of the shares forfeited or some of them, as it deems fit, but shall not be obliged to do so.
|
|
8.14
|
Share forfeitures shall result, at the time of the forfeiture, in the cancellation of any right in the Company and any claim or demand vis-a-vis it in relation to the share, save for those rights and obligations which are excluded from this rule pursuant to these articles or which the law grants or imposes on the former shareholder.
|
9.
|
The Company's Register of Shareholders and the Issue of Share Certificates
|
|
9.1
|
The Company shall, through its secretary, keep a register of shareholders and register of material shareholders.
|
|
9.2
|
The board of directors may close the register of shareholders for an overall period of up to 30 days in any year.
|
|
9.3
|
A shareholder is entitled, at his request, to receive from the Company, without payment, within two months of the allotment or registration of the transfer (unless the issue conditions specify another period of time) one certificate or a number of certificates, in accordance with the Company's resolution, in respect of all the shares of a particular class registered in his name, which shall specify the number of shares and any other detail which in the board of directors' opinion is important. In the case of a jointly held share, the Company shall not be liable to issue more than one certificate to all the joint shareholders, and the delivery of such a certificate to one of the joint shareholders shall be deemed delivery to all of them.
|
|
9.4
|
Every certificate shall bear the Company's seal or stamp or its printed name and shall be signed by one director and the Company's secretary, or by two directors or by any other person appointed by the board of directors for such object.
|
|
9.5
|
If a share certificate is destroyed, spoiled, lost or damaged, the board of directors may order the cancellation thereof and the issue of a new certificate in place thereof, provided that the share certificate is delivered to the Company and destroyed by it, or that it is proved to the satisfaction of the board of directors that the certificate has been lost or destroyed and that the Company has received security to the satisfaction of the board of directors against any possible damage. A reasonable sum as may be determined by the board of directors from time to time shall be paid in respect of every certificate issued pursuant to this article
.
|
|
9.6
|
Where two or more persons are registered as joint holders of a share, each of them may confirm the receipt of a dividend or other payments in connection with such share and his confirmation shall bind all the joint shareholders.
|
|
9.7
|
The Company shall not recognize any person as holding a share on trust, and shall not be bound or compelled to recognize any equitable, contingent, future or partial interest in any share, or any other interest in connection with a share, save for the absolute right of the registered holder in respect of any share, except in reliance upon a judicial decision or pursuant to the requirements of any law.
|
10.
|
Transfer of the Company's Shares
|
|
10.1
|
The Company's shares may be transferred. A share transfer shall not be registered unless a share transfer deed (hereinafter referred to as “share transfer deed") is submitted to the Company. The share transfer deed shall be drawn up in the following manner or in a manner as similar thereto as possible or in another manner approved by the board of directors.
|
|
|
Transfer deed
|
|
I ___________________, ID/Company No. __________, of ___________________ (hereinafter referred to as “the transferor") transfer to ___________________, ID/Company No. __________, of ___________________ (hereinafter referred to as “the transferee"), in consideration for NIS __________, __________ ordinary shares of NIS __________ n.v. each, which are marked with the numbers __________ to __________ inclusive, of ___________________ Ltd. (hereinafter referred to as “the Company"), to be held by the transferee, administrators of his estate, guardians and successors and assigns on the same terms and conditions pursuant to which I held these shares at the time of signing this instrument, and I the transferee agree to accept the aforementioned shares on the terms and conditions mentioned above and subject to the Company's articles, as shall be from time to time.
|
|
As witness our hands on ___________________.
|
The Transferor
-
|
The Transferee
-
|
Name:
|
Name:
|
Signature:
|
Signature:
|
Witness to Transferor's Signature
-
|
Witness to Transferee's Signature
-
|
|
Name:
|
, Adv.
|
Name:
|
, Adv.
|
License No.
|
License No.
|
Signature:
|
Signature:
|
|
|
10.2
|
A transfer of shares which are not fully paid, or of shares on which the Company has a lien, shall not be valid, unless approved by the board of directors which may, in its absolute discretion and without giving any grounds therefor, refuse to register such a transfer.
|
|
The board of directors may refuse a transfer of shares as aforesaid and may make such a transfer conditional upon the transferee undertaking, to the extent and in the manner prescribed by the board of directors, to perform the transferor's obligations in respect of the shares or the obligations in respect of which the Company has a lien on the shares.
|
|
10.3
|
The transfer of part of a share shall not be valid.
|
|
10.4
|
The transferor shall continue to be considered the holder of the shares being transferred until the transferee's name is entered in the Company's register of shareholders.
|
|
10.5
|
The share transfer deed shall be submitted to the office for registration together with the certificates in which the shares to be transferred are registered (if issued) and any other proof which the Company requires regarding the transferor's proprietary right in the shares or his right to transfer them. The share transfer deeds shall be kept by the Company. The Company shall not be bound to keep share transfer deeds and share certificates which have been cancelled.
|
|
10.6
|
A joint shareholder wishing to transfer his right in a share, who is not in possession of the share certificate, shall not be liable to attach the share certificate to the share transfer deeds, provided that the share transfer deeds state that the transferor is not in possession of the share certificate relating to the share his right in which is being transferred and that the share being transferred is jointly held, together with details of the other joint shareholders.
|
|
10.7
|
The Company may demand the payment of a fee for registering the transfer in such amount as prescribed by the board of directors from time to time.
|
|
10.8
|
Upon the death of a shareholder of the Company, the Company shall recognise his guardians, administrators of the estate or executors of the will, or in the absence of any of the aforegoing the shareholder's legal heirs, as the only persons having a right to his shares, after entitlement thereto is proved as prescribed by the board of directors.
|
|
10.9
|
Where the deceased shareholder held shares jointly with others, the Company shall recognise the surviving joint shareholders as holders of the said shares, unless all the joint shareholders have notified the Company in writing prior to the death of one of them of their wish that the provisions of this article shall not apply; however, such shall not exempt the estate of a joint shareholder from any obligation by which the joint shareholders would have been bound were it not for his death.
|
|
10.10
|
A person acquiring a right to shares in consequence of his being a guardian, administrator of the estate, executor of the will, heir, receiver, liquidator or trustee on bankruptcy of a shareholder or pursuant to the provisions of any other law may, on furnishing proof of his right, as required by the board of directors, be registered as the holder of the shares or transfer them to another person, subject to the provisions of the articles in relation to transfer.
|
|
10.11
|
A person acquiring a right to a share as a result of their transmission shall be entitled to dividend and the other rights in respect of the share and may accept and give receipts for dividend or other payments payable in connection with the share, but shall not be entitled to receive notices of the Company's general meetings and to participate thereinin or vote thereat in connection with such share or exercise any right vested by the share, save for the aforegoing, until after he has been entered in the register of shareholders.
|
11.
|
Lien
|
|
11.1
|
The Company shall have a first and paramount lien on all the shares not paid in full which are registered in the name of any shareholder, and over the proceeds from the sale thereof, in relation to monies (whether presently payable or not) called or payable at a fixed time in respect of such shares.
|
|
The Company shall also have a first and paramount lien over all the shares (other than fully paid shares) registered in the name of any shareholder to secure monies due from him or from his property, whether such debts are due from him alone or together with others.
|
|
The said lien shall also apply to dividends declared from time to time on such shares.
|
|
11.2
|
In order to realize the lien, the board of directors may sell the shares to which the lien applies, or any of them, in such manner as it deems fit. No sale as aforesaid shall be effected until after the date specified for payment and after written notice has been given to the shareholder of the Company's intention to sell the shares, and the amounts are not paid within 14 days of such notice.
|
|
11.3
|
The net proceeds from any such sale, after payment of the sale expenses, shall be applied towards the discharge of the debts or obligations of such shareholder and the balance (if any) shall be paid to him.
|
|
11.4
|
If shares are sold in order to realize a lien through prima facie use of the powers given above, the board of directors may enter these shares in the register of shareholders in the purchaser's name, and the purchaser shall not be liable to check the legality of the acts or the application of the purchase money. After the said shares are registered in the purchaser's name in the register of shareholders, no person shall be entitled to appeal the validity of the sale.
|
12.
|
Alterations to the Share Capital
|
|
The general meeting may at any time resolve by an ordinary majority to do any of the following acts.
|
|
12.1
|
Increasing the authorised share capital
|
|
To increase the Company's authorised share capital, whether or not all the shares registered at such time have been issued. The increased capital shall be divided into shares with ordinary, preferred, deferred or other special rights (subject to the special rights attached to an existing class of shares) or shall be subject to such conditions and restrictions in relation to dividend, return of capital, voting or other conditions as directed by the general meeting in its resolution to increase the authorised capital.
|
|
12.2
|
Classes of shares
|
|
To divide the share capital into different classes of shares and to determine and alter the rights attached to each class of shares, on the following conditions -
|
|
(a)
|
so long as the shares' issue conditions do not otherwise provide, the rights attached to any class of shares may be altered after an ordinary majority resolution is passed by general meetings of the holders of each class of shares separately or after obtaining the written consent of the holders of all the classes of shares;
|
|
(b)
|
the rights vested in the holders of shares of a particular class shall not be deemed to have been altered by the creation or issue of other shares with identical rights or alteration of the rights attached to existing shares, unless the issue conditions of such shares otherwise provide.
|
|
12.3
|
Consolidation of the share capital
|
|
To consolidate and divide any or all of its share capital into shares of a nominal value greater than that specified in the articles. In the event that there are shareholders who are left with fractions of shares as a result of the consolidation, the board of directors may, if it receives the approval of the general meeting in the resolution on the consolidation of the capital as aforesaid:
|
|
(a)
|
sell all the fractions and for such object appoint a trustee in whose name the share certificates containing the fractions shall be issued, who shall sell them, and the consideration received less commissions and expenses shall be distributed amongst the entitlees. The board of directors may resolve that shareholders entitled to a consideration that is less than the amount prescribed by it shall not receive any consideration from a sale of the fractions as aforesaid, and their share of the consideration shall be distributed amongst the shareholders entitled to a consideration exceeding the amount prescribed, pro rata to the consideration to which they are entitled;
|
|
(b)
|
to allot to all the shareholders left with fractions of shares as a result of the consolidation and division fully paid shares of the class of shares which existed prior to the consolidation in such number the consolidation of which with the fraction would suffice for one whole consolidated share, and an allotment as aforesaid shall be deemed valid just before the consolidation;
|
|
(c)
|
determine that shareholders shall not be entitled to receive a consolidated share in respect of a fraction of a consolidated share deriving from the consolidation of half or less of the number of shares the consolidation of which creates one consolidated share, and shall be entitled to receive a consolidated share in respect of a fraction of a consolidated share deriving from the consolidation of more than half the number of shares the consolidation of which created one consolidated share.
|
|
In the event that an act pursuant to sub-paragraphs (b) or (c) above obliges the issue of additional shares, the payment thereof shall be effected in the manner in which bonus shares may be paid. Consolidation and division as aforesaid shall not be deemed alteration of the rights attached to the shares the subject of the consolidation and division.
|
|
12.4
|
Cancellation of unallotted share capital
|
|
To cancel authorised share capital which has not yet been allotted, provided that the Company has not undertaken to allot such shares.
|
|
12.5
|
Sub-division of the share capital
|
|
To sub-divide the Company's share capital or any part thereof into shares of a nominal value smaller than that specified in the articles by a sub-division of all or any of the Company's shares at such time.
|
13.
|
The General Meeting's Powers
|
|
13.1
|
Matters within the general meeting's authority
|
|
The Company's resolutions on the following matters shall be passed by the general meeting:
|
|
(a)
|
alterations to the articles.
|
|
(b)
|
the appointment or renewal of the appointment of the auditor, the termination of his office or the non-renewal thereof and the determination of his remuneration in accordance with the provisions of articles 14.1 (b) and 28 below;
|
|
(c)
|
the appointment of directors, including external directors, and the termination of their offices in accordance with article 22.3 below;
|
|
(d)
|
the approval of acts and transactions requiring the general meeting's approval in accordance with the provisions of sections 255 and 268 to 275 of the Companies Law;
|
|
(e)
|
alterations to the Company's share capital, in accordance with the provisions of article 12 above;
|
|
(f)
|
a merger as provided in section 320(a) of the Companies Law;
|
|
(g)
|
any resolution which pursuant to the law or in accordance with these articles requires to be adopted by resolution of a general meeting;
|
|
13.2
|
The general meeting's authority to transfer powers between the organs
|
|
The general meeting may, by a special majority, assume powers given to another organ, and it may transfer powers given to the general manager to the authority of the board of directors.
|
|
The assumption and/or transfer of powers as aforesaid shall be for a particular matter or for a particular period of time, all as provided in the meeting's resolution.
|
14.
|
Annual and Special General Meetings and Class Meetings
|
|
14.1
|
Annual meetings
|
|
The annual general meeting shall be held every year by no later than the end of 15 months from the last annual general meeting
,
at such time and place as may be determined by the Board. These general meetings shall be called "annual meetings".
|
|
(a)
|
The annual meeting shall be convened in order to pass resolutions on the following matters:
|
|
(1)
|
the appointment of directors and the termination of their office in accordance with article 22 below;
|
|
(2)
|
the appointment of the auditor or the renewal of his office and the board of directors' authorisation to determine of his remuneration, subject to the provisions of article 28.3 below.
|
|
(b)
|
The annual meeting shall be convened in order to:
|
|
(1)
|
discuss the financial statements and the board of directors' report submitted by the Company pursuant to the Securities Regulations as at 31st December of the calendar year preceding the year in which the general meeting is being held;
|
|
(2)
|
receive the board of directors' report on the auditor's remuneration, as provided in article 28.3 below.
|
|
(c)
|
In addition, the annual meeting shall include a discussion and/or resolution on any other matter placed on the agenda.
|
|
14.2
|
Special meetings
|
|
General meetings of the Company which are not convened pursuant to article 14.1 above shall be called "special meetings".
|
|
A special meeting shall only discuss and resolve on all the matters not discussed at the annual meeting which are detailed on the agenda of the special meeting.
|
|
14.3
|
Class meetings
|
|
The provisions of these articles relating to general meetings shall apply, mutatis mutandis, to class meetings of the Company.
|
15.
|
Convening of General Meetings
|
|
15.1
|
Convening the annual meeting
|
|
The board of directors shall convene annual meetings in accordance with the provisions of article 14.1 above.
|
|
15.2
|
Convening a special meeting
|
|
The board of directors shall convene a special meeting pursuant to its resolution; however, it shall be obliged to convene such a meeting if requisitioned by one of the following:
|
|
(a)
|
two directors or one quarter of the directors holding office, whichever is the lower;
|
|
(b)
|
one or more shareholders holding at least 5% of the voting rights in the Company.
|
|
If the board of directors does not convene a general meeting as aforesaid, the person requisitioning the meeting, and where shareholders are involved – such part of them as holds at least one half their voting rights in the Company, may convene the meeting themselves, provided that it shall not be held more than three months after the date the requisition was made, and the meeting shall be convened, insofar as possible, in the same manner as meetings are convened by the board of directors.
|
|
Where a general meeting is convened as aforesaid, the Company shall cover the reasonable expenses incurred by the person requisitioning it.
|
|
15.3
|
The time for calling a special meeting pursuant to a requisition
|
|
Where the board of directors is requisitioned to call a special meeting, as provided in paragraph 15.2 above, it shall do so within 21 days of the requisition being submitted, for a date that shall not be later than 35 days from the date on which the notice of the special meeting is published.
|
|
15.4
|
Notice of a general meeting
|
|
15.4.1
|
Unless a shorter period is permitted by law, notice of a general meeting shall be given in the manner hereinafter mentioned, to all shareholders entitled to attend and vote at such meeting. No separate notice shall be given to registered shareholders of the Company. Notices shall be given in accordance with Article 40.
|
|
15.4.2
|
The notice of the general meeting shall specify the type of meeting, the place and time at which the meeting shall be convened, its agenda, a summary of the proposed resolutions, the majority required to pass the resolutions and the date determining the shareholders' entitlement to participate in and vote at the general meeting according to paragraph 17.1 below.
|
16.
|
The General Meeting's Agenda
|
|
16.1
|
The general meeting's agenda shall be prescribed by the board of directors and shall also include matters in respect of which a special meeting is required as provided in article 14.2 above, and matters obliged in accordance with the provisions of article 16.2 below.
|
|
16.2
|
One or more shareholders holding at least 1% of the Company's share capital may ask the board of directors to include a matter on the agenda of a general meeting to be held in the future. The board of directors shall include such a matter on the agenda provided that in its discretion such matter is suitable for discussion at a general meeting of the Company.
|
|
16.3
|
A request as aforesaid in Article 16.2 above shall be lodged with the Company at least seven days prior to the giving of notice of the convening of the general meeting, and there shall be attached thereto a draft of the resolution proposed by the shareholder.
|
|
16.3
|
The general meeting may only pass resolutions on the matters on its agenda.
|
|
16.4
|
So long as not otherwise obliged by the law, the general meeting may pass or defeat a proposed resolution that was on the general meeting's agenda the text or a summary description of the main points of which was published by the Company, including with slight changes; however, it may not pass a resolution materially different from the proposed resolution.
|
17.
|
The Discussion at General Meetings
|
|
17.1
|
Entitlement to participate in a vote
|
|
Subject to the provisions of section 182(c) of the Companies Law, the shareholders who are entitled to participate in and vote at a general meeting shall be the shareholders on the date prescribed in the resolution to call the general meeting, provided that such date is not more than forty (40) days nor less than four (4) days prior to the date of the general meeting (or any longer or shorter period permitted by law
,
including regulations promulgated pursuant to the Companies Law).
|
|
17.2
|
Quorum
|
|
No discussion may be commenced at a general meeting unless a quorum is present at the time of a discussion. Two shareholders present in person or by proxy, or who have sent the Company a voting instrument indicating the way in which they are voting, and holding or representing at least thirty three and one third percent of the voting rights in the Company, shall constitute a quorum.
|
|
A shareholder or his proxy, who is also acting as the proxy of other shareholders, shall be considered two or more shareholders, in accordance with the number of shareholders represented by him.
|
|
17.3
|
The general meeting's adjournment in the absence of a quorum
|
|
If no quorum is present within half an hour of the time fixed for the meeting, the meeting shall stand adjourned for seven days, to the same day of the week at the same time and place, without further notice being given thereof, or to such other date, time and place as prescribed by the board of directors in notice to the shareholders, and the adjourned meeting shall discuss those matters for which the first meeting was called. If no quorum is present at the adjourned meeting, two shareholders, at least, present in person or by proxy, shall constitute a quorum, subject to the provisions of section 79(b) of the Companies Law.
|
|
17.4
|
The general meeting's chairman
|
|
The board of directors' chairman (if appointed) shall chair the general meeting. In the absence of a chairman, or if he does not appear at the meeting within 15 minutes of the time fixed therefor, those shareholders present at the meeting shall elect one of the Company's directors as chairman, or if no director is present, they shall elect one of the shareholders present to chair the meeting.
|
|
The meeting's chairman shall not have an additional or casting vote (without derogating, however, from the rights of such meeting’s chairman to vote as a shareholder or proxy of a shareholder if, in fact, he is also a shareholder or such proxy).
|
|
17.5
|
Adjourned meeting
|
|
With the agreement of a meeting at which a quorum is present, the chairman may, and on the demand of the meeting he must, adjourn the meeting from time to time and from place to place, as the meeting resolves (hereinafter in this article referred to as “adjourned meeting"). If a meeting is adjourned for 21 days or more, notice of the adjourned meeting shall be given in the same way in which notice is given of a first meeting. Save for the aforegoing, a shareholder shall not be entitled to receive notice of an adjournment or of the matters to be discussed at an adjourned meeting. The adjourned meeting shall not discuss any matters save for those which could have been discussed at the meeting at which the adjournment was resolved upon. The provisions of articles 17.1 and 17.2 hereof shall apply to an adjourned meeting as mentioned in this article.
|
18.
|
Voting by Shareholders
|
|
18.1
|
Passing a resolution
|
|
A resolution put to the vote at any general meeting shall be passed if it acquires an ordinary majority or any other majority especially prescribed for it pursuant to the law or these articles.
|
|
If the votes are tied, the resolution shall be deemed to have been defeated.
|
|
18.2
|
Examining the majority
|
|
18.2.1
|
The majority shall be examined through a poll, each shareholder being entitled at the time of voting to one vote in respect of each share held by him which has been fully paid or the calls in respect of which have been fully paid.
|
|
18.2.2
|
The chairman's declaration that a resolution at the general meeting has been passed or defeated, unanimously or by a particular majority, shall constitute prima facie evidence of that stated therein.
|
|
18.3
|
Right to participate and vote
|
|
A shareholder shall not be entitled to participate in and vote at any general meeting or to be counted amongst those present so long as he owes the Company any payment called in respect of the shares held by him, unless the shares' issue conditions otherwise provide.
|
|
18.4
|
Confirmation of title
|
|
A shareholder in whose favor a share is registered with a stock exchange member and such share is included amongst the shares entered in the register of shareholders in the name of a registration company may not participate in and vote at a general meeting unless he has given the Company confirmation of title as prescribed by the board of directors at least two business days prior to the date of the general meeting.
|
|
18.5
|
Personal interest in resolutions
|
|
A shareholder wishing to vote on a resolution the majority required to pass which includes the votes of those who do not have a personal interest shall notify the Company before the vote on the said resolution commences, or if voting through a proxy or voting instrument within the framework thereof, whether he does or does not have a personal interest in the resolution.
|
|
A shareholder who has not given any notice as aforesaid shall be deemed to have notified the Company that he does not have a personal interest in the resolution.
|
|
18.6
|
Disqualification of voting instruments
|
|
Subject to the provisions of the law, the Company's secretary may, in his discretion, disqualify voting instruments or proxy appointment instruments in the following cases:
|
|
(a)
|
there is a reasonable apprehension that they are forged or were given by virtue of shares in respect of which other proxy appointment instruments or voting instruments were given;
|
|
(b)
|
in respect of voting instruments -
|
|
(1)
|
if more than one choice for a particular resolution is marked therein;
|
|
(2)
|
if in respect of resolutions the majority required to pass which includes the votes of persons who do not have a personal interest in the approval, it is not marked whether or not there is a personal interest as aforesaid.
|
|
18.7
|
Voting by a legally incapacitated person
|
|
A legally incapacitated person may only vote by a trustee, natural guardian or other legal guardian. These persons may vote in person or by proxy.
|
|
18.8
|
Voting by joint shareholders
|
|
Where two or more shareholders are joint holders of a share, one of them shall vote, himself, by proxy or through a voting instrument. If more than one joint shareholder wishes to participate in the vote, only the first joint shareholder may vote. For such object, the first joint shareholder shall be the person whose name is entered first in the register of shareholders.
|
|
18.9
|
Minutes of the general meeting
|
|
The general meeting's chairman shall procure that minutes are properly kept of every general meeting which shall include:
|
|
(a)
|
the name of the shareholder or proxy and the number of shares held by him;
|
|
(b)
|
the main points of the discussion, all the resolutions passed or defeated at the general meeting and if passed - by what majority.
|
|
18.10
|
A defect in convening or conducting the general meeting, including a defect deriving from the non-fulfillment of any provision or condition laid down in the Law or the Company's articles, including with regard to the manner of convening or conducting the general meeting, shall not disqualify any resolution passed at the general meeting and shall not affect the discussions which took place thereat.
|
19.
|
The Appointment of a Proxy
|
|
19.1
|
Voting through a proxy
|
|
A shareholder who is entered in the register of shareholders may appoint a proxy to participate and vote in his stead, at a particular general meeting or at general meetings of the Company in general, personally or through a voting instrument, provided that the proxy appointment instrument is given to the Company at least two business days prior to the date of the general meeting. In the event that the proxy appointment instrument is not for a particular general meeting, a proxy appointment instrument deposited prior to one general meeting shall also be valid for subsequent general meetings. Notwithstanding the aforesaid, the chairman of the meeting may, at his discretion, accept such proxy appointment after such time if he so deems fit at his discretion. If the proxy appointment is not received as aforesaid in this article, it shall not be valid at such meeting
|
|
The aforegoing shall also apply to a shareholder which is a corporation, appointing a person to participate and vote in its stead at the general meeting.
|
|
A proxy need not be a shareholder of the Company.
|
|
19.2
|
The proxy appointment instrument's form of wording
|
|
The proxy appointment instrument shall be signed by the shareholder or by the person authorised therefor in writing, and if the appointor is a corporation, it shall be signed in the manner binding the corporation. The Company may demand that it be given written confirmation to its satisfaction of the authority of those signing to bind the corporation. The proxy appointment instrument shall be drawn up in the form of wording set forth below. The Company's secretary may, in his discretion, accept a proxy appointment instrument in a different form of wording, provided that the changes are not material. The Company shall only accept an original proxy appointment instrument or a copy thereof, provided that it is certified by an attorney with an Israeli license or a notary.
|
|
Proxy Appointment Instrument
|
|
Date: __________
|
|
To
|
|
[The Company's Name]
|
|
[The Company's Address]
|
|
Dear Sirs,
|
|
Annual/Special General Meeting of ("the Company" to be held on ("the Meeting")
|
|
I the undersigned, ___________________, Identity/Registration No. __________, of ___________________, the registered owner of __________
(*)
shares ordinary of NIS ___ n.v. each, hereby empower __________, Identity No.
(**)
__________ and/or __________, Identity No. __________ and/or __________, Identity No. __________ to participate and vote in my name and stead at the above meeting of the Company and at any adjourned meeting thereof/at any general meeting of the Company, until I notify you otherwise.
|
|
___________________
|
|
Signature
|
|
(*)
|
A registered shareholder may grant a number of proxy appointment instruments, each in relation to another quantity of the Company's shares held by him, provided that he does not grant proxy appointment instruments for a quantity of shares larger than the quantity held by him.
|
|
(**)
|
Where the proxy does not have an Israeli identity document, the passport number and the country which issued the passport may be stated.
|
|
|
19.3
|
Voting pursuant to a proxy appointment instrument shall be legal even if prior thereto the appointor dies or becomes legally incapacitated or bankrupt, or in the case of a corporation - is liquidated or cancels the proxy appointment instrument or transfers the shares in relation to which it is given, unless written notice is received at the Company's office prior to the meeting that such an event has occurred.
Notwithstanding the aforesaid the chairman of the meeting may, at his discretion, accept such a notice also during the meeting if he shall so deem fit at his discretion.
|
|
19.4
|
The proxy appointment shall state the class and number of shares in respect of which it is given. If the proxy appointment does not state the number of shares in respect of which it is given or states a number of shares which exceeds the number registered in the name of the shareholder, the proxy instrument shall be deemed to have been given in respect of all the shares of the shareholder according to the registration in the Company’s register.
|
|
19.5
|
If the proxy appointment is given in respect of a number of shares which is less than the number of shares registered in the name of the shareholder, the shareholder shall be deemed not to have participated in the voting in respect of the excess shares and the proxy appointment shall be valid in respect of the number of shares stated therein.
|
|
20.
|
Voting Instrument
|
|
20.1
|
A shareholder may vote at the general meeting through a voting instrument on the matters specified below, unless the Company is legally entitled to a full or partial exemption from the sending of voting instruments in general or in particular circumstances. This paragraph shall only enter into force on the entry of sections 87-89 of the Companies Law into force.
|
|
(a)
|
the appointment and dismissal of directors;
|
|
(b)
|
approving acts with interested parties;
|
|
(c)
|
approving acts and transactions requiring the general meeting's approval in accordance with the provisions of sections 255 and 268-275 of the Companies Law;
|
|
(d)
|
a merger pursuant to section 320 of the Law;
|
|
(e)
|
any matter which the articles provide may be voted upon through a voting instrument;
|
|
(f)
|
any additional matter specified in the law.
|
|
20.2
|
The voting instrument's form of wording
|
|
The voting instrument shall be in the following form of wording, so long as the law does not prescribe another binding form of wording, in which case this form of wording shall apply mutatis mutandis. The Company's secretary or anyone authorised by the Company's board of directors to call the meeting may adapt the form of wording of the voting instrument in accordance with the resolutions on the agenda.
|
|
|
Voting Instrument
|
|
Date: __________
|
|
To
|
|
[Companys Name]
|
|
[Company's Address]
|
|
Dear Sirs,
|
|
Annual/Special General Meeting of the Company to be Held on ("the Meeting")
|
|
I the undersigned, ___________________, Identity/Registration No. __________, of ____________________, registered holder/holder of a suitable proxy appointment instrument which is annexed hereto
(*)
of __________
(**)
shares ordinary of NIS _____n.v. each hereby give notice that my vote at the meeting of the Company and at any adjourned meeting of that meeting thereof is as follows:
|
No. of Resolution on the Agenda
|
Subject of the Resolution
|
The Vote
(***)
|
Shareholder's Personal Interest in the Resolution
(****)
|
|||
For
|
Abstain
|
Against
|
Yes
|
No
|
||
|
(*)
|
If the shares are held through a registration company, confirmation of title must be annexed.
|
|
(**)
|
If the shareholder wishes to vote differently for any part of his shares, a separate voting instrument must be submitted for every quantity of shares in respect of which he votes differently.
|
|
(***)
|
X must be marked in accordance with the relevant choice. If more than one choice is selected for a particular resolution, the vote on such resolution shall be disqualified.
|
|
(****)
|
In resolutions the majority required to pass which includes the votes of persons who do not have a personal interest in the approval, X must be marked in the appropriate place - whether there is or is not a personal interest as aforesaid. If X is not marked - the vote on such resolution shall be disqualified.
|
|
20.3
|
Sending a voting instrument
|
|
The voting instrument shall be sent by the Company to the shareholders entered in the Company's register of shareholders and entitled to vote at the general meeting, together with the notice of the general meeting.
|
|
If notice of the general meeting is published in a newspaper or in any other manner that is not personal notice to the shareholders through the mail, the voting instrument shall be sent immediately upon the notice's publication.
|
|
The voting instrument shall be sent by the Company at its expense.
|
|
20.4
|
The manner of using a voting instrument
|
|
A voting instrument reaching the Company's registered office at least two business days prior to the date of the general meeting and not disqualified by the Company's secretary shall be considered participation and voting by the shareholder who sent it for all intents and purposes, including for the purpose of the quorum.
|
|
A voting instrument received by the Company as provided in this article in respect of a particular matter not voted upon at the general meeting shall be considered abstention for the purpose of the resolution on the meeting's adjournment and shall be reckoned at the adjourned meeting in accordance with the way of voting appearing therein.
|
|
20.5
|
Notice of position
|
|
The board of directors and anyone on whose due requisition a special meeting is convened may send the shareholders a notice of position in order to persuade the shareholders to vote in a certain way on the matters to be voted upon in the voting instrument. The notice of position shall be sent at the Company's expense together with the voting instrument.
|
|
If a general meeting is called on one of the matters enumerated in article 20.1 above, a shareholder may approach the Company with a request that it send a notice of position on his behalf to the Company's other shareholders. Unless otherwise provided in the law, a notice of position as aforesaid shall be sent at the expense of the shareholder and shall only be sent if delivered to the Company's registered office at least 10 days prior to the general meeting.
|
21.
|
The Board of Directors' Powers
|
|
21.1
|
The board of directors' powers are as specified in the law and the provisions of these articles.
|
|
21.2
|
The Company's signatory rights and power of attorney on its behalf
|
|
21.2.1
|
The board of directors shall determine the signatory rights in the Company for various matters. The signature of any person appointed from time to time by the board of directors, in general or for a special matter, himself or together with others, together with the Company's seal or stamp or its printed name, shall bind the Company, on such conditions as prescribed by the board of directors.
|
|
21.2.2
|
The board of directors may determine separate signatory rights in respect of different matters of the Company and in respect of the amounts in respect of which such persons are authorised to sign.
|
|
21.2.3
|
The board of directors may from time to time empower any person to be the Company's attorney for such objects, with such powers, on such conditions and for such period as it deems fit, and it may give any attorney as aforesaid the power to delegate all or any of the powers, authorities and discretion given to him.
|
|
21.3
|
The Company's registered office
|
|
The board of directors shall determine what is the Company's registered office.
|
22.
|
The Appointment of Directors and Termination of Their Office
|
|
22.1
|
The number of directors
|
|
The number of directors in the Company shall be not less than three (3) nor more than nine (9) including the external directors, unless the general meeting otherwise resolves.
|
|
22.2
|
The director's identity
|
|
22.2.1
|
A member of the board of directors may hold another office in the Company.
|
|
22.2.2
|
A corporation may hold office as a director in the Company, subject to the provisions of article 22.6 below.
|
|
22.3
|
The appointment and tenure of directors
|
|
(a)
|
The directors shall be elected at each annual meeting and shall hold office until the end of the next annual meeting and so long as an annual meeting is not convened, unless their office is vacated prior thereto in accordance with the provisions of these articles.
|
|
The elected directors shall enter into their positions from the end of the meeting at which they are elected, unless a later date is specified in the resolution appointing them.
|
|
(b)
|
At every annual meeting the directors appointed at the previous annual meeting shall be deemed to have resigned from their office. A resigning director may be re-elected. Notwithstanding the aforegoing, if no directors are appointed at an annual meeting, the current directors shall continue to hold office.
|
|
(c)
|
A special meeting of the Company (including the special meeting adopting these articles) may appoint directors for the Company instead of directors whose office has been terminated and wherever the number of members of the board of directors falls below the minimum specified in the articles or by the general meeting.
|
|
(d)
|
The provisions of paragraphs 22.3(a) to (c) above shall not apply to the appointment and tenure of external directors, in respect of whom the provisions of the Companies Law shall apply.
|
|
(e)
|
No person other than a person who officiated as a director up to the annual meeting, shall be appointed as a director at the annual meeting, unless recommended for appointment by the board, or unless a shareholder of the company who wishes to propose a candidate shall have lodged at the office of the Company, not later than within seven days after the notice of the meeting has been given, a document in writing signed by the shareholder notifying his intention to propose such candidate for appointment as a director, to which document there shall be attached the consent of the candidate to officiate as a director and his/her resume.
|
|
22.4
|
The appointment of directors by the board of directors
|
|
The directors have the right at any time, in a resolution approved by at least a majority of the Company's directors, to appoint any person as a director, subject to the maximum number of directors specified herein, to fill a place which has randomly been vacated or as an addition to the board of directors. Any director so appointed shall hold office until the next annual meeting and may be re-elected.
|
|
22.5
|
Alternates
|
|
A director may from time to time appoint an alternate for himself (hereinafter referred to as “alternate"), dismiss such alternate and appoint another alternate instead of any alternate whose office has been vacated for any reason, for a particular meeting or on a regular basis, provided however that such alternate is approved in a resolution approved by at least a majority of the Company's directors. A person who is not qualified to be appointed as a director and a person holding office as a director or alternate shall not hold office as an alternate.
|
|
22.6
|
Attorney of a corporation holding office as director
|
|
A director which is a corporation shall appoint an individual who is qualified to be appointed as a director in the Company to hold office on its behalf on a permanent basis, or for a particular meeting, or for a particular period, and the said corporation may dismiss the individual and appoint another in his stead.
|
|
22.7
|
Empowered director
|
|
Each
director and each alternate director may appoint a representative to participate and vote on his behalf in any Board or Board’s committee meeting. Such appointment can be either general or for particular meeting or for several meetings. In case the director or the alternate attended such meeting, the empowered representative can not vote in place of his appointer. Such appointment shall be valid in accordance with its terms or until terminated by the appointer.
|
|
22.8
|
The manner of appointing or dismissing an alternate or attorney of a corporation holding office as a director
|
|
The appointment or dismissal of attorneys of corporations holding office as directors or of alternates shall be effected by written notice to the Company's secretary signed by the appointors or dismissers and shall enter into force on the date specified in the notice of appointment or dismissal, or on the date of its delivery to the Company's secretary, whichever is the later.
|
|
22.9
|
Various provisions in respect of alternates and attorneys of corporations holding office as directors
|
|
The following provisions shall apply in respect of the attorneys of directors, where the directors are corporations, and in respect of alternates:
|
|
(a)
|
any person, whether or not he is a director, may serve as the attorney of a corporation holding office as a director, and one person may serve as the attorney of several corporations holding office as directors;
|
|
(b)
|
the attorney of a corporation holding office as director shall have - in addition to his own vote if he himself is a director - a number of votes equal to the number of corporations holding office as directors for whom he is attorney;
|
|
(c)
|
an alternate and the attorney of a director which is a corporation shall have all the powers vested in the director for whom he is serving as alternate or attorney. Notwithstanding the aforesaid, an alternate or attorney shall not have the power to vote at such meetings at which the director himself is present;
|
|
(d)
|
the office of an alternate or attorney of a director which is a corporation shall automatically be vacated if the office of the director for whom or which he is acting as alternate or attorney is vacated.
|
|
22.10
|
Termination of the office of a director
|
|
22.10.1
|
The office of a director shall terminate in any one of the following cases:
|
(a)
|
if he resigns from his office by a letter signed by him which is submitted to the Company;
|
(b)
|
if he is declared bankrupt or settles with his creditors within the framework of bankruptcy proceedings;
|
(c)
|
if he is declared legally incapacitated;
|
(d)
|
on his death, and in the case of a corporation - if a resolution is passed to wind it up voluntarily or if a liquidation order is given in respect of thereof;
|
(e)
|
if he is dismissed from his office following a resolution passed by the Company's general meeting, before the end of his term of office;
|
(f)
|
if he is convicted of an offence as mentioned in section 232 of the Companies Law;
|
(g)
|
if his office is terminated by the board of directors, in accordance with the provisions of section 231 of the Companies Law.
|
|
22.11
|
The implications of the termination of a director's office on the board of directors' operation
|
|
Where the place of a director is vacated, the remaining directors may continue to act so long as the number of directors remaining does not fall below the minimum number of directors specified in the articles or by the general meeting.
|
|
Where the number of directors falls below the minimum number, the remaining directors may only act in order to call a general meeting of the Company.
|
|
22.12
|
The board of directors' members' remuneration
|
|
The members of the board of directors who do not hold other offices in the Company and who are not external directors shall not receive remuneration from the Company's monies, unless the general meeting otherwise resolves and in such amount as the general meeting prescribes, subject to the provisions of the law.
|
|
The directors' remuneration may be prescribed as an overall payment or as payment in respect of participation at meetings or any combination thereof.
|
|
The Company may, in a board of directors' resolution, reimburse expenses incurred by a director for the purpose of performing his position.
|
23.
|
The Directors' Acts
|
|
23.1
|
The board of directors' meetings
|
|
(a)
|
The board of directors' chairman may convene the board of directors at any time.
|
|
(b)
|
The board of directors' chairman shall convene the board of directors pursuant to the Company's requirements and at least once a year, in a manner enabling the Company to comply with the provisions of the law.
|
|
(c)
|
The board of directors' chairman shall convene the board of directors and hold a board of directors' meeting on a specified matter on the demand of at least two directors or one director alone if the Company has less than five directors.
|
|
(d)
|
The board of directors' chairman shall act without delay to call a meeting of the board of directors within 14 days of being notified by a director of the Company that he has learned of a matter of the Company in which a breach of the Law or impairment to proper business procedure has prima facie been discovered or of the date on which the Company's auditor reports to him that he has learned of material deficiencies in the audit of the Company's accounts.
|
|
(e)
|
If a notice or report of the general manager obliges action by the board of directors, the board of directors' chairman shall, without delay and within 14 days of the notice or report, call a meeting of the board of directors.
|
|
23.2
|
Calling a board of directors' meeting
|
|
23.2.1
|
Notice of a board of directors' meeting may be given orally or in writing, provided that the notice is given at least three business days prior to the date fixed for the meeting, unless all the members of the board of directors or their alternates or attorneys agree to a shorter time.
|
|
Notice as aforesaid shall be sent in writing or by facsimile or e-mail or by other media, to the postal address, facsimile number, e-mail address or other address given for the sending of notices by other media, as the case may be, given by the director to the Company's secretary upon his appointment, or in written notice to the secretary thereafter.
|
|
Notice given or sent as aforesaid shall be deemed to have been given to a director personally on the date of being given or sent as aforesaid.
|
|
23.2.2
|
Where an alternate or attorney has been appointed, notice shall be sent to the alternate or the attorney, unless the director has given notice that he wishes the notice to be sent to him as well.
|
|
23.2.3
|
The notice calling the meeting shall include the place and date of the board of directors' meeting, arrangements with regard to the manner of conducting the meeting (where media are being used) and details of the matters on the agenda, and any other material which the board of directors' chairman wishes to attach to the notice of the meeting.
|
|
23.2.4
|
Notwithstanding anything to the contrary herein, failure to deliver notice to a director of any such meeting in the manner required hereby may be waived by such director, and a meeting shall be deemed to have been duly convened if such defective notice, or failure to deliver such notice is waived prior to action being taken at such meeting, by all directors entitled to participate at such meeting to whom notice was not duly given as aforesaid. Without derogating from the foregoing, no director present at the commencement of a meeting of the board of directors shall be entitled to seek the abolishment of any proceedings or resolutions adopted at such meeting on account of any defect in the notice of such meeting relating to the time or the place thereof.
|
|
23.3
|
The agenda for the board of directors' meetings
|
|
The agenda for the board of directors' meetings shall be prescribed by the board of directors' chairman and shall include the following matters:
|
|
(a)
|
matters prescribed by the board of directors' chairman;
|
|
(b)
|
matters in respect of a meeting has been fixed, as provided in paragraphs 23.1(c) to (e) above;
|
|
(c)
|
any matter which a director or the general manager requests the board of directors' chairman, a reasonable time (having regard to the nature of the matter) prior to the board of directors' meeting, to include on the agenda.
|
|
23.4
|
Quorum
|
|
The quorum for meetings shall be a majority of the members of the board of directors who are not legally prevented from participating at the meeting, or any other quorum prescribed by a majority of the members of the board of directors from time to time.
|
|
23.5
|
Holding a meeting by media
|
|
The board of directors may hold the board of directors' meeting through the use of any media, provided that all the directors participating may hear each other simultaneously.
|
|
A resolution as aforesaid may be passed by the approval given by media of some of the directors, to the extent that the directors who do not approve the resolution were not entitled to participate at the discussion and vote on the resolution pursuant to the law and provided that they confirm by media that they are aware of the intention to pass a resolution as aforesaid.
|
|
23.6
|
Voting by the board of directors
|
|
Issues arising at board of directors' meetings shall be decided by a majority of votes of the directors present (or participating, in the case of voting by media) and voting, each director having one vote, subject to the provisions of article 22.9(b) above with regard to alternates and attorneys of directors which are corporations.
|
|
23.7
|
Passing resolutions without convening
|
|
The board of directors may pass resolutions without actually convening, provided that all the directors entitled to participate in a discussion and vote on a matter brought for resolution have agreed thereto.
|
|
In case such resolutions were passed, as aforesaid, the chairman of the board shall write the resolutions protocol and indicate specifically that it was agreed upon by all directors in writing, orally or by other means of media.
|
|
23.8
|
Resolution approved by media
|
|
A resolution approved by media by the directors shall be treated as a resolution duly passed at a meeting of the board of directors, and the provisions of paragraph 23.6 above shall apply thereto.
|
|
A resolution as aforesaid may be passed by the approval given by media of some of the directors, to the extent that the directors who do not approve the resolution were not entitled to participate in the discussion and vote on such resolution pursuant to the law and provided that they confirm by media that they are aware of the intention to pass the said resolution.
|
|
23.9
|
Validity of the directors' acts
|
|
All acts done in good faith at the directors' meeting or by a board of directors' committee or by any person acting as a director shall be valid even if it later transpires that there was some defect in the appointment of such director or person or that they or one of them were actually disqualified as though every such person had been duly appointed and was qualified to be a director.
|
|
23.10
|
Minutes of board of directors' meetings
|
|
The board of directors' chairman shall procure that minutes are properly kept of the board of directors' meetings, which shall include:
|
|
(a)
|
the names of those participating and present at each meeting;
|
|
(b)
|
all the resolutions and main points of the discussion at the said meetings.
|
|
All such minutes which are signed by the board of directors' chairman at such meeting or by the board of directors' chairman at the subsequent meeting shall be accepted as prima facie proof of the matters recorded therein.
|
24.
|
Board of Directors' Committees
|
|
24.1
|
Subject to the provisions of section 112 of the Companies Law, the directors may delegate their powers, or any of them, to committees as they deem fit and they may from time to time widen, narrow or cancel the delegation of such a power; however, the narrowing or cancellation of a power as aforesaid is not such as to prejudice the validity of a committee resolution pursuant whereto the Company acted vis-a-vis another person, who was not aware of the said change. Every such committee must, at the time of exercising a power as aforesaid, comply with all the directions given to it from time to time by the directors.
|
|
24.2
|
A board of directors' committee shall include at least two directors, one of whom shall be an external director, save for the audit committee, which shall include at least three directors and all the Company's external directors shall be members thereof.
|
|
24.3
|
The meetings and discussions of the board of directors' committees shall be governed by the provisions regarding the meetings of the directors, mutatis mutandis, so long as other provisions are not prescribed by the directors in such regard, and provided that the quorum for meetings of such committees shall be at least two members.
|
|
24.4
|
A resolution passed or an act done by a board of directors' committee shall be treated as a resolution passed or act done by the board of directors, unless expressly otherwise prescribed by the board of directors for a particular matter or in respect of a particular committee.
|
25.
|
The Board of Directors' Chairman
|
|
25.1
|
Appointment
|
|
(a)
|
The board of directors shall elect one of its members to serve as its chairman and shall specify, in the appointment resolution, the term for which he shall hold office.
|
|
(b)
|
If not otherwise provided in the resolution appointing him, the board of directors' chairman shall be elected each calendar year at the first board of directors' meeting held after the annual meeting at which the Company's directors are appointed.
|
|
(c)
|
So long as the board of directors' chairman holds office as a director of the Company, he shall continue to serve in such capacity until someone else is appointed in his stead.
|
|
(d)
|
If the board of directors' chairman ceases to hold office as a director of the Company, the board of directors shall elect a new chairman at the first board of directors' meeting held thereafter, who shall serve in such capacity for the term specified in the appointment resolution, and if no term is specified - until the appointment of a chairman as provided in paragraph 25.1(b) above.
|
|
(e)
|
If the board of directors' chairman is absent from a meeting, the board of directors shall elect one of its members to conduct the meeting and to sign the discussion minutes; however, the person elected shall not have an additional or casting vote in the board of directors' votes.
|
|
25.2
|
Powers
|
|
(a)
|
The board of directors' chairman shall conduct the board of directors' meetings and shall sign the discussion minutes.
|
|
(b)
|
If the votes on a board of directors' resolution are tied, the board of directors' chairman shall not have an additional vote.
|
|
(c)
|
The board of directors' chairman may, at any time, on his own initiative or pursuant to a resolution of the board of directors, demand reports from the general manager on matters relating to the Company's business.
|
|
25.3
|
Provisos to the acts of the board of directors' chairman
|
|
(a)
|
The board of directors' chairman shall not serve as the Company's general manager, unless appointed in accordance with the provisions of article 26.2 below.
|
|
(b)
|
The board of directors' chairman shall not be a member of the audit committee.
|
26.
|
The General Manager
|
|
26.1
|
The appointment and dismissal of the general manager
|
|
(a)
|
The board of directors shall appoint a general manager for a fixed term or for an unlimited term.
|
|
The board of directors may appoint more than one general manager.
|
|
(b)
|
Determining the general manager's remuneration and employment terms shall be subject to the approval of the board of directors, in such manner as it deems fit. Where the general manager's remuneration is considered an "exceptional transaction”, and in case of an exemption, insurance, indemnity undertaking or indemnity pursuant to permission is given to the general manager, the board of director' resolution as aforesaid requires the prior approval of the audit committee.
|
|
(c)
|
The board of directors may from time to time remove or dismiss the general manager from his office and appoint another or others in his stead.
|
|
26.2
|
The board of directors' chairman as general manager
|
|
(a)
|
The Company's general meeting may authorise the board of directors' chairman to fill the position of general manager or to exercise his powers, provided that in counting the votes of the majority at the general meeting at least two thirds of the votes of shareholders who are not the Company's controlling shareholders or persons on their behalf, present at the vote, shall be included. In counting the votes of the shareholders, the votes of those abstaining shall not be taken into account.
|
|
(b)
|
The validity of such a resolution is limited to a period not exceeding three years from the date the resolution is passed by the general meeting. If no period is specified for authority as aforesaid, the authority shall be for a period of three years.
|
|
Before the end of the said three year period and even after it has come to an end, the general meeting may pass another resolution, and so on and so forth.
|
|
(c)
|
The said resolution may relate to the authorization of the board of directors' chairman in general or it may relate to the authorization of a particular board of directors' chairman.
|
|
26.3
|
The general manager's powers and his subordinacy to the board of directors
|
|
(a)
|
The general manager is responsible for the routine management of the Company's affairs within the framework of the policy prescribed by the board of directors and subject to its guidelines.
|
|
The general manager shall have all the management and execution powers not vested by the law or the articles in another organ of the Company, and he shall be under the supervision of the board of directors and subject to its guidelines.
|
|
The general manager shall appoint and dismiss the Company's officers, save for the directors and general manager, and shall determine the terms of their employment, unless otherwise prescribed by the board of directors.
|
|
(b)
|
The board of directors may instruct the general manager how to act in a particular matter; if the general manager does not obey the instruction, the board of directors may exercise the power required to implement the instruction in his stead.
|
|
(c)
|
If the general manager is unable to exercise his powers, the board of directors may exercise them in his stead or authorise someone else to exercise them.
|
|
(d)
|
Subject to the provisions of the Companies Law, the board of directors may delegate to the general manager powers which the board of directors has pursuant to the Company's articles, as it deems fit, and it may delegate these powers, or any of them, for such period and objects, on such conditions and with such restrictions as it deems fit. The board of directors may alter or cancel any delegation of powers as aforesaid.
|
|
26.4
|
The general manager's reporting duties
|
|
The general manager must notify the board of directors' chairman of any exceptional matter which is material to the Company or of any material deviation of the Company from the policy prescribed by the board of directors. If the Company does not have a board of directors' chairman, for any reason, the general manager shall notify all the board of directors' members as aforesaid.
|
|
The general manager shall submit reports to the board of directors on the matters, at the times and on the scale prescribed by the board of directors.
|
|
The general manager shall report to the board of directors' chairman, on his demand, on matters relating to the Company's business and the proper management thereof as mentioned in article 22.1 above.
|
|
26.5
|
Delegation of the general manager's powers
|
|
The general manager may, with the board of directors' approval, delegate any of his powers to another, who is subordinate to him; however, the delegation of powers as aforesaid does not exempt the general manager from liability for the aforegoing.
|
27.
|
Secretary, Internal Auditor and Other Officials in the Company
|
|
27.1
|
Secretary
|
|
27.1.1
|
The board of directors may appoint a secretary for the Company, on such terms as it deems fit, and may appoint a deputy secretary and determine their duties and powers.
|
|
27.1.2
|
If a secretary is not appointed for the Company, the general manager, or someone authorised by him for such purpose and in the absence of a general manager someone authorised for such purpose by the board of directors, shall perform the duties prescribed for the secretary pursuant to the law, these articles and the board of directors' resolution.
|
|
27.1.3
|
The Company's secretary shall be liable for all the documents kept at the Company's registered office, as provided in section 124 of the Companies Law, and shall keep the registers kept by the Company pursuant to the law.
|
|
27.2
|
Internal auditor
|
|
27.2.1
|
The Company's organizational superior over the internal auditor is the board of directors' chairman.
|
|
27.2.2
|
The internal auditor shall submit a proposal for an annual or periodic work plan to the board of directors, which shall be approved by the board of directors, with such changes as it deems fit.
|
|
27.3
|
Other officials in the Company
|
|
The board of directors may resolve that in addition to the general manager and the secretary, other officials shall be appointed by it, in general or in a particular case. In such case, the board of directors shall appoint the official, define his position and powers and determine his remuneration and employment terms.
|
28.
|
Auditor
|
|
28.1
|
The annual general meeting shall appoint an auditor for the period up to the end of the following general meeting. The general meeting may appoint an auditor for a period that shall not extend beyond the end of the third general meeting after the general meeting at which he was appointed. Where the auditor is appointed for such a period, the annual meeting shall not discuss the appointment of an auditor during the said period, unless a resolution is passed to terminate his office.
|
|
28.2
|
The general meeting may at any time terminate the office of the auditor or decline to renew it.
|
|
28.3
|
The board of directors shall determine the remuneration of the Company's auditor and shall report thereon to the Company's annual meeting.
|
|
28.4
|
The board of directors meeting shall determine the auditor's remuneration for services other than the audit and shall report thereon to the Company's annual meeting.
|
29.
|
Permitted Distribution
|
|
29.1
|
Definitions
|
|
In this chapter the following expressions shall bear the meanings attributed to them in sections 1 and 302 of the Companies Law: "distribution", "purchase", "profits", "profit criterion", "adjusted financial statements", "surpluses".
|
|
29.2
|
Distribution from profits alone
|
|
The Company shall not effect any distribution except from its profits, provided that there is no reasonable apprehension that the distribution will deprive the Company of the ability to perform its existing and expected obligations, when the time comes to perform them. Notwithstanding the aforegoing, the Company may effect a distribution that is inconsistent with the profit criterion if it receives the court's approval therefor.
|
|
29.3
|
Allotment for a consideration lower than the nominal value
|
|
Where the Company resolves to allot shares which have a nominal value for a consideration lower than their nominal value, including bonus shares, it must convert into share capital part of its profits, from premium on shares or from any other source included in its equity, which are mentioned in its last financial statements, in an amount equal to the difference between the nominal value and the consideration.
|
|
Notwithstanding the aforegoing, the Company may, with the court's approval, allot shares for a consideration lower than their nominal value.
|
30.
|
Dividend and Bonus Shares
|
|
30.1
|
Right to dividend or bonus shares
|
|
30.1.1
|
The Company's shareholders have a right to receive dividend or bonus shares, if the Company resolves thereon as provided in paragraph 30.2 below, in accordance with the rights attached to any class of shares in such regard.
|
|
30.1.2
|
Dividend or bonus shares shall be distributed amongst anyone entered in the Company's register of shareholders on the date of the resolution on the distribution or at a later date, if another date is prescribed therefor in such resolution (hereinafter referred to as “the determining date").
|
|
30.1.3
|
If the Company's capital contains shares of different nominal values, dividend or bonus shares shall be distribution pro rata to the nominal value of each share.
|
|
30.1.4
|
Subject to the special rights granted to special shares pursuant to their issue conditions, the Company's profits, in respect of which a resolution was passed to distribute them as dividend or bonus shares, shall be paid pro rata to the amount paid or credited as paid on account of the nominal value of the shares held by the shareholder.
|
|
30.1.5
|
If not otherwise provided in the shares' issue conditions or in the general meeting's resolution, all the dividends and bonus shares on shares which are not fully paid within any period in respect of the dividends or bonus shares are payable shall be paid pro rata to the amounts paid or credited as paid on the nominal value of the shares during any part of the said period (pro rata temporis).
|
|
30.2
|
The Company's resolution to distribute dividend or bonus shares
|
|
30.2.1
|
The Company's resolution to distribute dividends, bonus shares or interim dividends on account of future dividends, as it deems fit in accordance with the state of the Company's profits and the terms and conditions thereof, shall be passed by the Company's board of directors.
|
|
30.2.2
|
Funds
|
|
30.3
|
Payment of the dividend
|
|
30.3.1
|
Manner of payment
|
|
30.3.2
|
Unclaimed dividend
|
|
30.3.3
|
Dividend in specie
|
|
30.4
|
The capitalisation of profits and the distribution of bonus shares
|
|
30.4.1
|
Subject to the provisions of paragraph 30 above, the Company's undistributed profits, or premium on shares, or funds created from a revaluation of the Company's assets, or funds created on an equity basis from the profits of affiliated companies, or from a revaluation of the assets of affiliated companies and capital redemption funds - may be capitalised and distributed amongst the entitled shareholders, pursuant to paragraph 31.1 above, to be held by them as capital, and all or any of the money from this capitalisation shall be used in the name of such shareholders for the full payment, at the nominal value or with such premium as the resolution prescribes, of shares distributed in accordance therewith, and such distribution or payment shall be accepted by such shareholders as full consideration for their benefit in the aforementioned capitalised amount, as prescribed by the board of directors.
|
|
30.4.2
|
Where the Company resolves to distribute bonus shares, it may resolve to transfer to a special fund designated for a distribution of bonus shares in the future such amount the capitalisation of which would be sufficient to allot to anyone who at such time has a right to purchase shares of the Company (including a right which is only exercisable at a later date) bonus shares of such nominal value as would have been due to him had he exercised the right to purchase the shares prior to the determining date at the price of the right in force at such time. If after the determining date the holder of the said right exercises his right to purchase the shares or part thereof, the board of directors shall allot him fully paid bonus shares at such nominal value and of such class as would have been due to him had he exercised the right to purchase the shares which he actually purchased prior to the determining date, by appropriate capitalisation that shall be effected by the board of directors from the said special fund. With regard to determining the nominal value of the bonus shares that are distributed, any amount transferred to the special fund created in respect of a distribution of previous bonus shares shall be treated as though already capitalised and as if shares entitling the holders of the right to purchase shares of the Company to bonus shares had already been allotted therefrom.
|
|
30.4.3
|
In a distribution of bonus shares, all the Company's shareholders shall receive shares of a uniform class or of the class which vested him with the rights to receive the bonus shares, as prescribed by the board of directors.
|
|
30.4.4
|
In order to implement any resolution pursuant to the provisions of paragraph 30.4, the board of directors may settle any difficulty arising in relation to a distribution of bonus shares as it deems fit, and in particular may issue certificates for fractions of shares and sell the fractions in order to pay the proceeds thereof to entitlees and may determine the value for the purpose of distribution of certain assets and resolve that payments in cash shall be made to the shareholders in reliance upon the value so prescribed, or that fractions whose value is less than NIS 1 shall not be taken into account for the purpose of adjusting the rights of all the parties. The board of directors may pay cash or grant these particular assets to trustees on trust in favour of the persons entitled to dividend or capitalised fund, as it deems beneficial.
|
31.
|
Purchase of the Company's Shares
|
|
31.1
|
The Company may purchase or finance the purchase, directly or indirectly, of shares of the Company or of securities convertible into shares or exercisable into shares of the Company, including undertakings to do any of the aforegoing, subject to compliance with the condition of permitted distribution, as provided in paragraph 29 above.
|
|
31.2
|
If the Company purchases any of its shares, the share shall become a dormant share and shall not vest any rights, so long as it is held by the Company.
|
|
31.3
|
If a share of the Company is purchased by a subsidiary or by a corporation under the Company's control, the share shall not vest voting rights, so long as it is held by the said subsidiary or corporation.
|
32.
|
Insurance of Officers
|
|
32.1
|
The Company may insure the liability of an officer therein to the fullest extent permitted by law.
|
|
32.2
|
Without derogating from the aforesaid the Company may enter into a contract to insure the liability of an officer therein for an obligation or payment imposed on him in consequence of an act done in his capacity as an officer therein, in any of the following cases:
|
|
(a)
|
a breach of the duty of care vis-a-vis the Company or vis-a-vis another person;
|
|
(b)
|
a breach of the fiduciary duty vis-a-vis the Company, provided that the officer acted in good faith and had a reasonable basis to believe that the act would not harm the Company;
|
|
(c)
|
a monetary obligation imposed on him in favor of another person.
|
|
(d)
|
Financial liability imposed on him for payment to persons or entities harmed as a result of violations in Administrative Proceedings, as detailed in section 52(54)(A)(1)(a) of the Israeli Securities Law, 1965 (the "
Securities Law
").
|
|
(e)
|
Expenses incurred by him in connection with Administrative Proceedings (as defined above) he was involved in, including reasonable litigation fees, and including attorney fees.
|
|
(f)
|
any other matter in respect of which it is permitted or will be permitted under applicable law to insure the liability of an officer in the Company.
|
33.
|
Indemnity of Officers
|
|
33.1
|
The Company may indemnify an officer therein, to the fullest extent permitted by law. Without derogating from the aforesaid the Company may indemnify an officer in the Company for liability or expense imposed on him in consequence of an action made by him in the capacity of his position as an officer in the Company, as follows:
|
|
33.1.1
|
Any financial liability he incurs or imposed on him in favor of another person in accordance with a judgment, including a judgment given in a settlement or a judgment of an arbitrator, approved by a court.
|
|
33.1.2
|
Reasonable litigation expenses, including legal fees, incurred by the officer or which he was ordered to pay by a court, within the framework of proceedings filed against him by or on behalf of the Company, or by a third party, or in a criminal proceeding in which he was acquitted, or in a criminal proceeding in which he was convicted of a felony which does not require a finding of criminal intent.
|
|
33.1.3
|
Reasonable litigation expenses, including legal fees he incurs due to an investigation or proceeding conducted against him by an authority authorized to conduct such an investigation or proceeding, and which was ended without filing an indictment against him and without being subject to a financial obligation as a substitute for a criminal proceeding, or that was ended without filing an indictment against him, but with the imposition of a financial obligation, as a substitute for a criminal proceeding relating to an offence which does not require criminal intent, within the meaning of the relevant terms in the Companies Law.
|
|
33.1.4
|
Financial liability he incurs for payment to persons or entities harmed as a result of violations in Administrative Proceedings, as detailed in section 52(54)(A)(1)(a) of the Securities Law. For this purpose "
Administrative Proceeding
" shall mean a proceeding pursuant to Chapters H3 (Imposition of Monetary Sanction by the Israel Securities Authority), H4 (Imposition of Administrative Enforcement Means by the Administrative Enforcement Committee) or I1 (Settlement for the Avoidance of Commencing Proceedings or Cessation of Proceedings, Conditioned upon Conditions) of the Securities Law, as shall be amended from time to time.
|
|
33.1.5
|
Expenses that he incurs in connection with Administrative Proceedings (as defined above) he was involved in, including reasonable litigation fees, and including attorney fees.
|
|
33.1.6
|
Any other obligation or expense in respect of which it is permitted or will be permitted under law to indemnify an officer in the Company.
|
|
33.2
|
Advance indemnity
|
|
The Company may give an advance undertaking to indemnify an officer therein in respect of the following matters:
|
|
33.2.1
|
Matters as detailed in Article 33.1.1, provided however, that the undertaking is restricted to events, which in the opinion of the Board of Directors, are anticipated in light of the Company’s actual activity at the time of granting the obligation to indemnify and is limited to a sum or measurement determined by the Board of Directors as reasonable under the circumstances. The indemnification undertaking shall specify the events that, in the opinion of the Board of Directors are expected in light of the Company’s actual activity at the time of grant of the indemnification and the sum or measurement, which the Board of Directors determined to be reasonable under the circumstances.
|
|
33.2.2
|
Matters as detailed in Article 33.1.2 and 33.1.3.
|
|
33.2.3
|
Any matter permitted by applicable law.
|
|
|
33.3
|
Retroactive indemnity
|
|
The Company may indemnify an officer therein, save for the events subject to any applicable law.
|
34.
|
Exemption of Officers
|
35.
|
Insurance, Exemption and Indemnity - General
|
|
35.1
|
The above provisions with regard to insurance, exemption and indemnity are not and shall not limit the Company in any way with regard to its entering into an insurance contract and/or with regard to the grant of indemnity and/or exemption in connection with a person who is not an officer of the Company, including employees, contractors or consultants of the Company, all subject to any applicable law;
|
|
35.2
|
Articles 32 through 35 shall apply mutatis mutandis in respect of the grant of insurance, exemption and/or indemnification for persons serving on behalf of the Company as officers in companies controlled by the Company, or in which the Company has an interest.
|
|
35.3
|
An undertaking to insure, exempt and indemnify an officer in the Company as set forth above shall remain in full force and effect even following the termination of such officer service with the Company.
|
36.
|
Merger
|
|
Notwithstanding the provisions of section
327(a)
of the Companies Law, the majority required for the approval of a merger by the general meeting or by a class meeting shall be an ordinary majority of the votes of the shareholders entitled to vote and voting themselves.
|
37.
|
[Reserved]
|
38.
|
Winding Up
|
|
38.1
|
If the Company is wound up, voluntarily or otherwise, the liquidator may, with the general meeting's approval, distribute parts of the Company's property in specie amongst the shareholders, and he may, with similar approval, deposit any part of the Company's property with trustees in favour of the shareholders as the liquidator, with the approval mentioned above, deems fit.
|
|
38.2
|
Subject to the special rights attached to shares, if shares are issued with special rights, the Company's shares shall rank equally inter se in relation to the amounts of capital paid or credited as paid on the nominal value of the shares, in connection with the return of the capital and participation in a distribution of the Company's surplus assets on winding up.
|
39.
|
The Sale of the Company's Assets in Consideration for Securities
|
|
39.1
|
At the time of selling the Company's property, the board of directors, or the liquidators (in the case of winding up) may, if so permitted in a resolution passed by the Company's general meeting by an ordinary majority, accept fully or partially paid shares, debentures or securities of another company, Israeli or foreign, incorporated or about to be incorporated for the purpose of purchasing the Company's property, or part thereof, and the directors (if the Company's profits so permit) or the liquidators (in the case of winding up) may distribute the shares or securities mentioned above or any other property of the Company amongst the shareholders, without realising them or depositing them with trustees for the shareholders.
|
|
39.2
|
The general meeting may, in a resolution passed by the Company's general meeting by an ordinary majority, resolve on a valuation of the securities or property mentioned above at such price and in such manner as the general meeting resolves, and all the shareholders shall be liable to accept any valuation or distribution permitted as aforesaid and waive their rights in such regard, save, where the Company is about to be wound up or is in winding up proceedings, for those legal rights (if any) which pursuant to the provisions of the law may not be altered or qualified.
|
40.
|
Notices
|
|
40.1
|
Notice or any other document which the Company shall deliver and which it is entitled or required to give pursuant to the provisions of these Articles and/or any applicable law shall be delivered by the Company to any person, in any one of the following manners as the Company may choose: in person, by mail, transmission by fax or in electronic form (including through the Internet). Notwithstanding anything to the contrary contained herein and subject to the requirements of any applicable law, a notice to a shareholder may alternatively be served, as a general notice to all shareholders, in accordance with the rules and regulations of any applicable securities authority with jurisdiction over the Company or in accordance with the rules of any stock market upon which the Company’s shares are traded.
|
|
40.2
|
All the notices which must be given to the shareholders shall be given, in relation to shares which are jointly held, to the person whose name is entered first in the register of shareholders and any notice given in such manner shall be adequate notice to all the joint shareholders.
|
|
40.3
|
[Reserved]
|
|
40.4
|
Any notice or other document delivered or sent to a shareholder in accordance with these articles shall be deemed to have been duly delivered and sent in respect of all the shares held by him (alone or together with others), even if such shareholder has passed away at such time, or become bankrupt, or an order has been given for its winding up, or a trustee or liquidator or receiver has been appointed for his shares (whether or not the Company was aware thereof), until another person is entered in the register of shareholders in his stead as the holder thereof, and the giving or dispatch of a notice or document as mentioned above shall be deemed adequate delivery or dispatch to any person who has a right in these shares.
|
|
40.5
|
Any notice or other document sent by the Company by mail in accordance with an address in Israel shall be deemed to have been delivered within 48 hours of the letter containing the notice or document being mailed, within 96 hours where the address is abroad, or on the first day after transmission if transmitted by fax or in electronic form, and when coming to prove the delivery it shall be sufficient to prove the letter containing the notice or document contains the correct mailing, e-mail, or fax details as registered in the register or any other address which the shareholder submitted in writing to the Company as the address and fax or e-mail details for the submission of notices or other documents.
|
|
40.6
|
An accidental omission in giving notice of a general meeting to any shareholder or non-receipt of notice of a meeting or any other notice by a shareholder shall not cause the cancellation of a resolution passed at such meeting or cancellation of proceedings based on such notice.
|
|
40.7
|
Every shareholder and every board of directors' member may waive his right to receive notice or his right to receive notice within a particular time and may agree that a general meeting of the Company or a board of directors' meeting, as the case may be, be convened or take place despite the fact that he has not received notice thereof, or despite the fact that the notice was not received by him within the required time, subject to the provisions of any law prohibiting such waiver or consent.
|
C O M P AN Y | S ERV I C E P R O V I D E R | ||||
OPTIBASE LTD.
|
|||||
By: |
/s/ Amir Philips
/s/ Alex
Hilman
|
By: | /s/ Reuwen Schwarz | ||
Name: | Amir Philips, Alex Hilman | Name: | Reuwen Schwarz | ||
Title: | Authorized Signatory | ||||
|
|
Reuwen Schwarz |
Date
|
1.
|
I have reviewed this annual report on Form 20-F of Optibase Ltd.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
1.
|
I have reviewed this annual report on Form 20-F of Optibase Ltd.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
/s/ Amir Philips
Name: Amir Philips
Title: Chief Executive Officer
|
/s/ Yakir Ben-Naim
Name: Yakir Ben-Naim
Title: Chief Financial Officer
|
Tel-Aviv, Israel
April 29, 2014
|
/s/ Kost Forer Gabbay & Kasierer
KOST FORER GABBAY & KASIERER
A Member of Ernst & Young Global
|