|
26 Harokmim Street
|
Holon 5885849, Israel
|
(Address of Principal Executive Offices)
|
Number
|
Description of Exhibit
|
101 |
The following financial information from Compugen Ltd.’s Report on Form 6-K, formatted in XBRL (eXtensible Business Reporting Language): (i) consolidated balance sheets at June 30, 2019 and December 31, 2018; (ii) consolidated
statements of comprehensive loss for the six months ended June 30, 2019 and 2018; (iii) consolidated statements of changes in shareholders’ equity for the six months ended June 30, 2019 and the year ended December 31, 2018; (iv)
consolidated statements of cash flows for the six months ended June 30, 2019 and 2018; and (v) notes to the consolidated financial statements
.
|
|
COMPUGEN LTD.
|
||
|
|||
Date: August 5, 2019
|
By:
|
/s/
Donna Gershowitz
|
|
|
|
Donna Gershowitz
General Counsel
|
|
|
• |
Dosed first patient in the combination arm of the Phase 1 study for COM701, combining escalating doses of COM701 with a fixed dose of Opdivo (nivolumab) in patients with advanced solid tumors. Combination arms of the study are
conducted under the clinical collaboration agreement entered into with Bristol-Myers Squibb in October 2018.
|
|
• |
Reported at a trial-in-progress poster presentation at the 2019 ASCO Annual Meeting in June that the sixth dose level
patient cohort of COM701 monotherapy has been completed and that no dose-limiting toxicities were found. Clinical and laboratory assessment for safety and tolerability are ongoing for this and earlier dose level patient cohorts.
|
|
• |
Awarded U.S. Patent No. 10,351,625 by the U.S. Patent and Trademark Office, which covers the method of use of COM701 in combination with any anti-PD-1 antibody.
|
COMPUGEN LTD.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(U.S. dollars in thousands, except for share and per share amounts)
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|||||||||||||
|
|
|||||||||||||||
Revenues
|
-
|
-
|
-
|
10,000
|
||||||||||||
Cost of revenues
|
-
|
-
|
-
|
350
|
||||||||||||
Gross profit
|
-
|
-
|
-
|
9,650
|
||||||||||||
|
||||||||||||||||
Operating expenses
|
||||||||||||||||
Research and development expenses
|
4,870
|
8,027
|
11,205
|
15,095
|
||||||||||||
Marketing and business development expenses
|
175
|
319
|
388
|
697
|
||||||||||||
General and administrative expenses
|
1,962
|
1,988
|
3,928
|
4,077
|
||||||||||||
Total operating expenses
|
7,007
|
10,334
|
15,521
|
19,869
|
||||||||||||
|
||||||||||||||||
Operating loss
|
(7,007
|
)
|
(10,334
|
)
|
(15,521
|
)
|
(10,219
|
)
|
||||||||
Financial and other income, net
|
308
|
141
|
414
|
130
|
||||||||||||
Loss before taxes on income
|
(6,699
|
)
|
(10,193
|
)
|
(15,107
|
)
|
(10,089
|
)
|
||||||||
Taxes on income
|
722
|
-
|
722
|
-
|
||||||||||||
Net loss
|
(5,977
|
)
|
(10,193
|
)
|
(14,385
|
)
|
(10,089
|
)
|
||||||||
|
||||||||||||||||
Basic and diluted net loss per ordinary share
|
(0.10
|
)
|
(0.19
|
)
|
(0.24
|
)
|
(0.19
|
)
|
||||||||
Weighted average number of ordinary shares used in computing basic and diluted net loss per share
|
61,479,162
|
52,512,259 |
60,747,948
|
52,149,380
|
COMPUGEN LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS DATA
|
(U.S. dollars, in thousands)
|
|
June 30,
|
December 31,
|
||||||
|
2019
|
2018
|
||||||
Unaudited
|
||||||||
ASSETS
|
||||||||
|
||||||||
Current assets
|
||||||||
Cash, cash equivalents, short-term bank deposits and restricted cash
|
36,975
|
45,675
|
||||||
Other accounts receivable and prepaid expenses
|
802
|
903
|
||||||
Total current assets
|
37,777
|
46,578
|
||||||
Non-current assets
|
||||||||
Long-term prepaid expenses
|
765
|
776
|
||||||
Severance pay fund
|
2,465
|
2,454
|
||||||
Operating lease right to use Asset
|
4,490
|
-
|
||||||
Property and equipment, net
|
2,768
|
3,372
|
||||||
Total non-current assets
|
10,488
|
6,602
|
||||||
|
||||||||
Total assets
|
48,265
|
53,180
|
||||||
|
||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
|
||||||||
Current liabilities
|
||||||||
Other account payables, accrued expenses and trade payables
|
4,939
|
8,900
|
||||||
Current maturity of operating lease liability
|
1,184
|
-
|
||||||
Short-term deferred participation in R&D expenses
|
898
|
1,089
|
||||||
Total current liabilities
|
7,021
|
9,989
|
||||||
|
||||||||
Non-current liabilities
|
||||||||
Long-term deferred participation in R&D expenses
|
2,929
|
3,003
|
||||||
Long-term operating lease liability
|
3,549
|
-
|
||||||
Accrued severance pay
|
2,971
|
2,945
|
||||||
Total non-current liabilities
|
9,449
|
5,948
|
||||||
|
||||||||
Total shareholders' equity
|
31,795
|
37,243
|
||||||
Total liabilities and shareholders' equity
|
48,265
|
53,180
|
Page
|
|
F-2 - F- 3
|
|
F-4
|
|
F-5
|
|
F-6
|
|
F-7 - F-17
|
Six months ended
June 30,
|
||||||||
2019
|
2018
|
|||||||
Unaudited
|
||||||||
Revenues
|
$
|
-
|
$
|
10,000
|
||||
Cost of revenues
|
-
|
350
|
||||||
Gross profit
|
-
|
9,650
|
||||||
Operating expenses:
|
||||||||
Research and development expenses, net
|
11,205
|
15,095
|
||||||
Marketing and business development expenses
|
388
|
697
|
||||||
General and administrative expenses
|
3,928
|
4,077
|
||||||
Total
operating expenses
|
15,521
|
19,869
|
||||||
Operating loss
|
(15,521
|
)
|
(10,219
|
)
|
||||
Financial and other income, net
|
414
|
130
|
||||||
Loss before taxes on income
|
(15,107
|
)
|
(10,089
|
)
|
||||
Taxes on income
|
722
|
-
|
||||||
Net loss
|
$
|
(14,385
|
)
|
$
|
(10,089
|
)
|
||
Basic and diluted net loss per share
|
$
|
(0.24
|
)
|
$
|
(0.19
|
)
|
||
Other comprehensive loss:
|
||||||||
Unrealized gain arising during the period from foreign currency derivative contracts
|
$
|
-
|
$
|
-
|
||||
Realized gain arising during the period from foreign currency derivative contracts
|
$
|
-
|
$
|
(17
|
)
|
|||
Total comprehensive loss
|
$
|
(14,385
|
)
|
$
|
(10,106
|
)
|
||
Weighted average number of ordinary shares used in computing basic and diluted net loss per share
|
60,747,948
|
52,149,380
|
Ordinary
shares
|
Additional paid-in
|
Accumulated other comprehensive
|
Accumulated
|
Total shareholders'
|
||||||||||||||||||||
Number
|
Amount
|
capital
|
Income
|
deficit
|
equity
|
|||||||||||||||||||
Balance as of January 1, 2018
|
51,293,070
|
$
|
140
|
$
|
337,382
|
$
|
17
|
$
|
(308,242
|
)
|
$
|
29,297
|
||||||||||||
Options exercised
|
765,420
|
2
|
683
|
-
|
-
|
685
|
||||||||||||||||||
Issuance of ordinary shares and warrants, net of issuance cost
|
7,791,294
|
22
|
27,689
|
-
|
-
|
27,711
|
||||||||||||||||||
Stock-based compensation relating to options issued to non-employees
|
-
|
-
|
193
|
-
|
-
|
193
|
||||||||||||||||||
Stock-based compensation relating to options issued to employees and directors
|
-
|
-
|
1,973
|
-
|
-
|
1,973
|
||||||||||||||||||
Changes in other comprehensive income (loss) from foreign currency derivative contracts
|
-
|
-
|
-
|
(17
|
)
|
-
|
(17
|
)
|
||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(22,599
|
)
|
(22,599
|
)
|
||||||||||||||||
Balance as of December 31, 2018
|
59,849,784
|
164
|
367,920
|
-
|
(330,841
|
)
|
37,243
|
|||||||||||||||||
Options exercised
|
123,412
|
*
|
)
|
396
|
-
|
-
|
396
|
|||||||||||||||||
Issuance of ordinary shares, net of issuance cost
|
1,982,796
|
6
|
7,247
|
-
|
-
|
7,253
|
||||||||||||||||||
Stock-based compensation relating to options issued to non-employees
|
-
|
-
|
150
|
-
|
-
|
150
|
||||||||||||||||||
Stock-based compensation relating to options issued to employees and directors
|
-
|
-
|
1,138
|
-
|
-
|
1,138
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(14,385
|
)
|
(14,385
|
)
|
||||||||||||||||
Balance as of June 30, 2019 (unaudited)
|
61,955,992
|
$
|
170
|
$
|
376,851
|
$
|
-
|
$
|
(345,226
|
)
|
$
|
31,795
|
Six months ended
June 30,
|
||||||||
2019
|
2018
|
|||||||
Unaudited
|
||||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(14,385
|
)
|
$
|
(10,089
|
)
|
||
Adjustments required to reconcile net loss to net cash used in operating activities:
|
||||||||
Stock-based compensation
|
1,288
|
1,052
|
||||||
Depreciation
|
561
|
721
|
||||||
Increase (decrease) in severance pay, net
|
15
|
(14
|
)
|
|||||
Loss (gain) from property and equipment disposal
|
(148
|
)
|
52
|
|||||
Exchange rate differences on short-term and long-term operating lease liability
|
168
|
-
|
||||||
Decrease (increase) in interest receivables from short-term bank deposits
|
60
|
(27
|
)
|
|||||
Decrease (increase) in other accounts receivable and prepaid expenses
|
231
|
(558
|
)
|
|||||
Decrease (increase) in long-term prepaid expenses
|
11
|
(26
|
)
|
|||||
Increase (decrease) in trade payables and other accounts payable and accrued expenses
|
(3,950
|
)
|
1,040
|
|||||
Decrease in deferred participation in R&D expenses
|
(265
|
)
|
-
|
|||||
Net cash used in operating activities
|
(16,414
|
)
|
(7,849
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Proceeds from maturity of short-term bank deposits
|
29,603
|
10,900
|
||||||
Investment in short-term bank deposits
|
(21,200
|
)
|
(39,106
|
)
|
||||
Purchase of property and equipment
|
(29
|
)
|
(128
|
)
|
||||
Proceeds from sales of property and equipment
|
284
|
2
|
||||||
Net cash provided by (used in) investing activities
|
8,658
|
(28,332
|
)
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of ordinary shares and warrants, net
|
7,123
|
20,055
|
||||||
Proceeds from exercise of options
|
396
|
545
|
||||||
Net cash provided by financing activities
|
7,519
|
20,600
|
||||||
Increase (decrease) in cash, cash equivalents and restricted cash
|
(237
|
)
|
(15,581
|
)
|
||||
Cash, cash equivalents and restricted cash at the beginning of the period
|
6,466
|
26,520
|
||||||
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
6,229
|
$
|
10,939
|
||||
Supplemental disclosure of non-cash investing and financing activities:
|
||||||||
Changes in receivables from foreign currency derivative contracts
|
$
|
-
|
$
|
(17
|
)
|
|||
Purchase of property and equipment
|
$
|
64
|
$
|
-
|
||||
Proceeds from issuance of ordinary shares and warrants, net
|
$
|
130
|
$
|
296
|
||||
Right-of-use assets obtained in exchange for new operating lease liability
|
$
|
5,049
|
$ | - | ||||
Cash payments for operating leases
|
$
|
784
|
$ | - |
|
a. |
Compugen ("The Company") is a clinical-stage, therapeutic discovery and development company utilizing its proprietary computational discovery platforms to identify novel drug targets and develop first-in-class therapeutics in the field
of cancer immunotherapy. The Company's therapeutic pipeline consists of immuno-oncology programs against novel drug targets it has discovered, including T cell immune checkpoints and other early-stage immuno-oncology programs focused
largely on myeloid targets. The Company’s business model is to enter into collaborations for its novel targets and related drug product candidates at various stages of research and development.
|
|
b. |
The Company is headquartered in Holon, Israel. Its clinical development and business development activities operate from its United States subsidiary in South San Francisco, CA.
|
|
c. |
The Company has incurred losses in the amount of $ 14,385 during the six months ended June 30, 2019, has an accumulated deficit of $ 345,226 as of June 30, 2019 and has accumulated negative cash flow from operating activities amounted
to $ 16,414 for the six months ended June 30, 2019. On February 26, 2019, the Company announced a corporate restructuring to reduce costs by consolidating and streamlining R&D operations. The restructuring includes reducing its
workforce by 35%, consolidating R&D activities in one location in Israel and outsourcing certain preclinical activities to third-party service providers.
The
Company believes that its existing capital resources together with the anticipated cost reductions will be adequate to satisfy its expected liquidity requirements beyond the third quarter of 2020.
|
|
d. |
On August 5, 2013, the Company entered into a Research and Development Collaboration and License Agreement ("Bayer Agreement") with Bayer Pharma AG ("Bayer") for the research, development, and commercialization of antibody-based
therapeutics for antibody-based therapeutics against two novel Compugen-discovered immune checkpoint regulators.
Under the terms of the Bayer Agreement, the Company received an upfront payment of $ 10,000, and,
following the return of the CGEN 15022 program in 2017,
is
eligible to receive an aggregate of over $ 250,000 in potential milestone payments, not including aggregate milestone payments of approximately $ 23,000 received to date. Additionally, the Company is eligible to receive mid to high
single digit royalties on global net sales of any approved products under the collaboration.
Pursuant to the terms of Bayer Agreement, BAY 1905254 program (formerly CGEN-15001T) was transferred to Bayer’s full control for further preclinical and clinical development activities, and worldwide
commercialization under milestone and royalty bearing licenses from Compugen.
|
|
e. |
Effective March 30, 2018, the Company entered into an exclusive license agreement with MedImmune Limited, the global biologics research and development arm of AstraZeneca (“AstraZeneca”) to enable the development of bi-specific and
multi-specific immuno-oncology antibody products. Under the terms of the agreement, Compugen provided an exclusive license to AstraZeneca for the development of bi-specific and multi-specific antibody products derived from a Compugen
pipeline program. AstraZeneca has the right to create multiple products under this license and will be solely responsible for all research, development and commercial activities under the agreement. Compugen received a $10,000 upfront
payment and is eligible to receive up to $200,000 in development, regulatory and commercial milestones for the first product as well as tiered royalties on future product sales. If additional products are developed, additional milestones
and royalties would be due to Compugen for each product.
|
|
f. |
On October 10, 2018, the Company entered into a Master Clinical Trial Collaboration Agreement (the “Master Clinical Agreement”) with Bristol-Myers Squibb Company (“Bristol-Myers Squibb”) to evaluate the safety and tolerability of
Compugen’s COM701 in combination with Bristol-Myers Squibbs’ programmed death-1 (PD-1) immune checkpoint inhibitor Opdivo® (nivolumab), in patients with advanced solid tumors. Pursuant to the Master Clinical Agreement, Compugen is
responsible for and will continue sponsoring the ongoing two-part Phase 1 trial, which includes the evaluation of the combination of COM701 and Opdivo®. The collaboration is also designed to address potential future combinations,
including trials sponsored by Bristol-Myers Squibb to investigate combined inhibition of checkpoint mechanisms, such as PVRIG and TIGIT. Bristol-Myers Squibb and Compugen will each supply the other company with its own compound for the
other party’s study, and otherwise each party will be responsible for all costs associated with the study that it is conducting.
In conjunction with the signing of the Master Clinical Agreement, Bristol-Myers Squibb made a $ 12,000 investment in Compugen, see Note 6a.
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES
|
|
a. |
These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2018. The significant accounting policies
applied in the annual financial statements of the Company as of December 31, 2018, are applied consistently in these interim consolidated financial statements, except for the Company's adoption of the accounting standard update 2016-02,
"Lease" ("ASU 2016-02") using the modified retrospective approach.
|
|
b. |
Concentration of credit risks:
Financial instruments that potentially subject the Company and Compugen USA, Inc. to concentration of credit risk consist principally of cash and cash equivalents, restricted cash, short-term bank
deposits and foreign currency derivative contracts.
Cash, cash equivalents, restricted cash and short-term bank deposits are invested in major banks in Israel and in the United States ("U.S."). Generally, these deposits may be redeemed upon demand and
bear minimal risk.
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
|
c. |
Revenue recognition:
The Company generates revenues mainly from its Research and Development Collaboration and License Agreements. The revenues are derived mainly from upfront license payments, research and development services
and contingent payments related to milestones achievements.
The Company has adopted the new revenue standard, Topic 606 – “Revenue from Contracts with Customers”, as of January 1, 2018, using a modified retrospective adoption transition to each prior reporting
period presented. The adoption did not have an effect over the Consolidated Financial Statements on the adoption date and no adjustment to prior year consolidated financial statements was required.
The Company analyzes its collaboration arrangements to assess whether they are within the scope of ASC 606. In determining the appropriate amount of revenue to be recognized as the Company fulfills its
obligations under each of its agreements, the Company performs the following steps:
|
|
• |
Identification of the contract, or contracts, with a customer
|
|
• |
Identification of the performance obligations in the contract
- At contract inception, the Company assesses the goods or services promised in a contract with a customer and identifies those distinct goods and services that
represent a performance obligation. A promised good or service may not be identified as a performance obligation if it is immaterial in the context of the contract with the customer, if it is not separately identifiable from other
promises in the contract (either because it is not capable of being separated or because it is not separable in the context of the contract), or if the performance obligation does not provide the customer with a material right.
|
|
• |
Determination of the transaction price
- The Company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which the Company
expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration will
only be included in the transaction price when it is not considered constrained, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.
|
|
• |
Allocation of the transaction price to the performance obligations in the contract
- If it is determined that multiple performance obligations exist, the transaction price is allocated at the inception of the agreement to all identified performance
obligations based on the relative standalone selling prices. The relative selling price for each deliverable is estimated using objective evidence if it is available. If objective evidence is not available, the Company uses its best
estimate of the selling price for the deliverable.
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
|
• |
Recognition of revenue when, or as, the Company satisfies a performance obligation
-
Revenue is recognized when, or as, the Company satisfies a performance obligation by transferring a promised good or service
to a customer. An asset is transferred when, or as, the customer obtains control of that asset, which for a service is considered to be as the services are received and used.
After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events.
Any change in the transaction price is allocated to the performance obligations on the same basis as at contract inception.
|
|
|
The Company entered into an exclusive license agreement with AstraZeneca. Under the terms of the agreement, Compugen provided AstraZeneca with an exclusive license to intellectual property ("IP) rights of
the Company for the development of bi-specific and multi-specific antibody products derived from a Compugen pipeline program. Compugen received a $10,000 upfront nonrefundable payment and is eligible to receive up to $200,000 in
development, regulatory and commercial milestones for the first product as well as tiered royalties on future product sales.
Under ASC 606, the Company determined the license to the IP to be a functional IP that has significant standalone functionality. The Company is not required to continue to support, develop or maintain
the intellectual property transferred and will not undertake any activities to change the standalone functionality of the IP. Therefore the license to the IP is a distinct performance obligation and as such revenue is recognized at
the point in time that control of the license is transferred to the customer.
Future milestone payments are considered variable consideration and are subject to the variable consideration constraint (i.e. will be recognized once concluded that it is “probable” that a
significant reversal of the cumulative revenues recognized under the contract will not occur in future periods when the uncertainty related to the variable consideration is resolved). Therefore, as the milestone payments are not
probable, revenue was not recognized in respect to such milestone payments.
Sales- or usage-based royalties to be received in exchange for licenses of IP are recognized at the later of when (1) the subsequent sale or usage occurs or (2) the performance obligation to which
some or all of the sales- or usage-based royalty has been allocated is satisfied (in whole or in part). As royalties are payable based on future Commercial Sales, as defined in the agreement, which did not occur as of the
financial statements date, the Company did not recognize any revenues from royalties.
|
|
d. |
Recently adopted accounting pronouncements:
|
|
1. |
Leases
In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02 (Topic 842) "Leases." Topic 842 supersedes the lease requirements in Accounting Standards
Codification (ASC) Topic 840, "Leases." Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures.
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
|
|
The Company adopted ASC 842 on January 1, 2019, using the modified retrospective approach and consequently did not restate comparative periods. In addition, the Company elected the available practical
expedients on adoption which does not require it to reassess the prior conclusions about lease identification, lease classification and initial direct costs.
The Company leases real estate, cars and storage areas, which are all classified as operating leases. In addition to rent payments, the leases may require the Company to pay for insurance, maintenance
and other operating expenses.
The Company determines if an arrangement is a lease at inception. Lease classification is governed by five criteria in ASC 842-10-25-2. If any of these five criteria is met, the Company classifies the
lease as a finance lease. Otherwise, The Company classifies the lease as an operating lease. As of June 30, 2019, all arrangements were classified as operating leases.
Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets. ROU assets represent the Company’s right to use an
underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating and finance lease ROU assets and liabilities are recognized at the
commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of
the lease payments. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located.
Operating lease expenses are recognized on a straight-line basis over the lease term. Some of the lease agreements include rental payments adjusted periodically for inflation. The Company's financial income (expenses), net will
be impacted by the revaluation of the lease liabilities in non-USD denominated currencies. The Company’s lease agreements do not contain any material residual value guarantees.
The Company elected the short-term lease recognition exemption for all leases with a term shorter than 12 months. This means that for those leases, the Company does not recognize ROU assets or
lease liabilities, including not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition, but recognizes lease expenses over the lease term on a straight-line basis.
Some of the real estate leases contain variable lease payments, including payments subject to annual changes in the Consumer Price Index (CPI). The changes to the CPI are treated as variable
lease payments and recognized in the period in which the obligation for those payments was incurred.
The Company recorded upon adoption as of January 1, 2019, right-of-use leased assets and corresponding liabilities of $ 5,049.
See note 4 for additional disclosures.
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
|
2. |
The Company also adopted ASU 2018-07, “Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” This ASU supersedes ASC 505-50, “Equity—Equity Based Payments
to Non-Employees,” and expands the scope of ASC 718, “Compensation – Stock Compensation,” to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. The adoption
of this guidance has no material impact on the Company’s financial statements.
|
|
e. |
Basic and diluted loss per share:
Basic loss per share is calculated based on the weighted average number of ordinary shares outstanding during each period. Diluted net loss per share is calculated based on the weighted average number of
ordinary shares outstanding during each period, plus dilutive potential in accordance with ASC 260, "Earnings per Share."
All outstanding share options and warrants for the six months ended June 30, 2019 and 2018 have been excluded from the calculation of the diluted net loss per share because all such securities are
anti-dilutive for all periods presented. As of June 30, 2019 and 2018 the total weighted average number of shares related to outstanding options and warrants excluded from the calculations of diluted net loss per share were 12,822,249
and 8,750,886, respectively.
|
NOTE 3:- |
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information.
Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have been included.
Operating results for the six-month period ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ended December 31, 2019.
|
NOTE 4:-
|
LEASES
|
|
The Company and Compugen USA, Inc. lease their respective facilities and motor vehicles under various operating lease agreements that expire on various dates.
The Company subleases small part of its leased premises. Sublease income in the six months ended June 30, 2019, amounted to $ 10.
The Company’s operating lease agreements have remaining lease terms ranging from 1 month to 7 years, including agreements with options to extend the leases for up to 5 years.
The following table represents the weighted-average remaining lease term and discount rate:
|
Six months ended
|
||||
June 30,
2019
|
||||
Weighted average remaining lease term
|
5.3 years
|
|||
Weighted average discount rate
|
9.4%
|
|
|
Lease terms will include options to extend or terminate the lease when it is reasonably certain that the Company will exercise or not exercise the option to renew or terminate the lease. Maturities of
operating lease liabilities were as follows:
|
June 30,
2019
|
||||
2019 (excluding the six months ended June 30, 2019)
|
$
|
788
|
||
2020
|
1,528
|
|||
2021
|
936
|
|||
2022
|
642
|
|||
2023
|
638
|
|||
2024 and after
|
1,410
|
|||
Total operating lease payments
|
$
|
5,942
|
||
Less: imputed interest
|
1,209
|
|||
Present value of lease liabilities
|
$
|
4,733
|
|
Operating lease expenses for the Company and Compugen USA, Inc. were approximately $ 764 and $ 757 for the six-month periods ended June 30, 2019 and 2018, respectively.
The above annual minimum future rental commitments include a first option to extend the lease of the Company facility for additional five-year period and exclude a second option to extend the lease
of the Company facility for additional five-year period following expiration of the current lease period.
|
NOTE 5:- |
COMMITMENTS AND CONTINGENCIES
|
|
a. |
The Company provided bank guarantees in the amount of $ 653 in favor of its offices' lessor in Israel and credit card security for its U.S. subsidiary.
|
|
b. |
Under the office of the Israel Innovation Authority of the Israeli Ministry of Industry, Trade and Labor, formerly known as the Office of the Chief Scientist, ("IIA"), the Company is not obligated to repay any amounts received from the
IIA if it does not generate any income from the results of the funded research program(s).
If income is generated from a funded research program, the Company is committed to pay royalties at a rate of between 3% to 5% of future revenue arising from such research program(s), up to a maximum of
100% of the amount received, linked to the U.S. dollar (for grants received under programs approved subsequent to January 1, 1999, the maximum amount to be repaid is 100% plus interest at LIBOR).
For the six-month periods ended June 30, 2019 and 2018, the Company had aggregate paid and accrued royalties to the IIA, recorded as cost of revenues in the consolidated statement of comprehensive loss,
in the amounts of $ 0 and $ 350, respectively.
As of June 30, 2019, the Company's aggregate contingent obligations for payments to IIA, based on royalty-bearing participation received or accrued, net of royalties paid or accrued, totaled $ 9,228.
|
|
c. |
On June 25, 2012, the Company entered into an Antibodies Discovery Collaboration Agreement (the "Antibodies Discovery Agreement") with a U.S. antibody technology company ("mAb Technology Company"),
providing an established source for fully human mAbs. Under the Antibodies Discovery Agreement, the mAb Technology Company will be entitled to certain royalties that could be eliminated upon payment of certain one-time fees (all milestone
and royalties payments referred together as "Contingent Fees"). As of June 30, 2019, the Company incurred aggregate Contingent Fees in the amounts of $ 500.
|
|
d. |
On May 9, 2012, the Company entered into agreement (the "May 2012 Agreement") with a U.S. Business Development Strategic Advisor ("Advisor") for the purpose of entering into transactions with Pharma companies related to selected
Pipeline Program Candidates. Under the agreement the Advisor shall be entitled to 4% of the cash considerations that may be received under such transactions. In 2014, the May 2012 Agreement was terminated except for certain payments
arising from the Bayer Agreement which survive termination until August 5, 2025.
For the six months ended June 30, 2019 and 2018, the Company had no paid and accrued expenses related to this agreement. |
|
e. |
Effective as of January 5, 2018, the Company entered into a Commercial License Agreement (CLA) with a European cell line development company. Under the agreement the Company is required to pay an annual maintenance fee, certain amounts
upon the occurrence of specified milestones events, and 1% royalties on annual net sales with respect to each commercialized product manufactured using the company’s cell line. Royalties due under the CLA are creditable against the annual
maintenance fee. In addition, the Company may at any time prior to the occurrence of a specific milestone event buy-out the royalty payment obligations in a single fixed amount.
|
NOTE 6:- |
SHAREHOLDERS' EQUITY
|
|
a. |
Issuance of Shares:
On May 25, 2018, the Company entered into a sales agreement with Cantor Fitzgerald & Co. (“Cantor”), as sales agent, pursuant to which the Company may offer and sell, from time to time through Cantor,
ordinary shares, par value NIS 0.01 per share, of the Company (the “Ordinary Shares”), under an At-the-Market ("ATM") program, having an aggregate offering price of up to $25,000 (the “ATM Shares”). Any ATM Shares offered and sold will
be issued pursuant to the Company’s shelf registration statement on Form F-3 (Registration No. 333-213007) and the related prospectus previously declared effective by the Securities and Exchange Commission (the “SEC”) on October 11,
2016 (the “Registration Statement”), as supplemented by a prospectus supplement, dated May 25, 2018. As of June 30, 2019, 2,033,390 shares were issued and sold under the ATM, with proceeds of approximately $ 7,409 (net of $ 301
issuance expenses).
On June 14, 2018, the Company entered into agreements in connection with a registered direct offering (the “Offering”) of an aggregate of 5,316,457 Ordinary Shares (the “RD Shares”) of the Company
together with accompanying warrants to purchase an aggregate of up to 4,253,165 Ordinary Shares (the “Warrants”) at a combined offering price of $ 3.95 per RD Share and accompanying Warrant. The Warrants are exercisable at a price of
$ 4.74 per Ordinary Share and expire five years from the date of issuance. The Offering was made pursuant to the Company’s Registration Statement. The RD Shares were issued and the Warrants were granted on June 19, 2018 following the
closing of the Offering. Proceeds from the Offering were $ 19,767 (net of $ 1,233 issuance expenses).
On October 10, 2018, the Company entered into a Master Clinical Trial Collaboration Agreement with Bristol-Myers Squibb to evaluate the safety and tolerability of the Company’s COM701 in combination
with Bristol-Myers Squibb’s programmed death-1 (PD-1) immune checkpoint inhibitor Opdivo® (nivolumab), in patients with advanced solid tumors. In conjunction with the Master Clinical Agreement, Bristol-Myers Squibb made a $ 12,000
equity investment in the Company. Under the terms of the securities purchase agreement, Bristol-Myers Squibb purchased 2,424,243 ordinary shares of the Company at a purchase price of $ 4.95 per share. The share price represents a
33% premium over the average closing price of Compugen’s ordinary shares for twenty (20) Nasdaq trading days prior to the execution of the securities purchase agreement. The investment closed on October 12, 2018.
The premium over the fair market value in the amount of $ 4,121 represents the relative fair value of deferred participation of Bristol-Myers Squibb in R&D expenses which will be amortized over
the period of the clinical trial based on the progress in the R&D, in accordance with ASC 808 “Collaborative Arrangements” and $ 7,788 (net of $ 91 issuance expenses) were considered equity investment.
|
NOTE 6:- |
SHAREHOLDERS' EQUITY (Cont.)
|
|
b. |
Stock based compensation:
During the six-month period ended June 30, 2019, the Company's Board of Directors granted 440,500 options to purchase ordinary shares of the Company to employees, directors and non-employees. The exercise
prices for such options range from $ 2.52 to $ 3.80 per share, with vesting to occur in up to 4 years.
The following table presents the assumptions used to estimate the fair value of the options granted in the periods presented:
|
Six months ended
June 30,
|
||||||||
2019
|
2018
|
|||||||
Unaudited
|
||||||||
Volatility
|
54%-55%
|
|
53%-55%
|
|
||||
Risk-free interest rate
|
2.2%-2.5%
|
|
2.6%-2.8%
|
|
||||
Dividend yield
|
0%
|
|
0%
|
|
||||
Expected life (years)
|
4.9-5.1
|
4.9-5
|
|
|
Weighted average fair value of options granted during the six-month periods ended June 30, 2019 and 2018 were $ 1.82 and $ 1.75, respectively.
During the six-month periods ended June 30, 2019 and 2018, the Company recorded share based compensation in a total amount of $ 1,288 and $ 1,052, respectively.
As of June 30, 2019, the total unrecognized estimated compensation cost related to non-vested stock options granted prior to that date was $ 4,198 which is expected to be recognized
over a weighted average period of approximately
2.52 years.
|
NOTE 7:- |
TAXES ON INCOME
|
|
In May 2019 the Company received a refund of withholding taxes on the Bayer milestones from the German tax authorities in the amount of EUR 645. The refund is presented as income tax benefit in the
consolidated statements of comprehensive loss.
|
Six months ended
June 30,
|
||||||||
2019
|
2018
|
|||||||
Unaudited
|
||||||||
Interest income
|
$
|
468
|
$
|
164
|
||||
Exchange rate differences and other
|
(54
|
)
|
(34
|
)
|
||||
Financial and other income, net
|
$
|
414
|
$
|
130
|
|
Balances with related parties:
|
June 30,
2019
|
December 31,
2018
|
|||||||
Unaudited
|
||||||||
Trade payables (a)
|
$
|
66
|
$
|
133
|
|
Related parties' expenses:
|
Six months ended
June 30,
|
||||||||
2019
|
2018
|
|||||||
Unaudited
|
||||||||
Amounts charged to:
|
||||||||
Research and development expenses (a)
|
$
|
99
|
$
|
167
|
|
(a) |
For the six-month periods ended June 30, 2019 and 2018, the Company incurred expenses for research and development services provided by related parties for cancer studies in animal models, and breeding and maintenance of animals (mice)
to support such studies.
|
|
1. |
To re-elect five (5) directors to serve as members of the Board of Directors; to elect two (2) new directors to serve as members of the Board of Directors;
|
|
2. |
To increase the Company’s authorized share capital and to amend and restate the Company’s memorandum and articles of association to reflect the same;
|
|
3. |
To approve an amendment to the Company’s Compensation Policy; and
|
|
4. |
To re-appoint Kost Forer Gabbay & Kasierer (a member of Ernst and Young Global), as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2019, and until immediately following
the next annual general meeting.
|
|
By Order of the Board of Directors,
|
|
|
|
/s/ Mr. Paul Sekhri
Paul Sekhri
Chairman of the Board
Holon, Israel
August 5, 2019
|
|
1. |
To re-elect five (5) directors to serve as members of the Board of Directors; to elect two (2) new directors to serve as members of the Board of Directors;
|
|
2. |
To increase the Company’s authorized share capital and to amend and restate the Company’s memorandum and articles of association to reflect the same;
|
|
3. |
To approve an amendment to the Company’s Compensation Policy; and
|
|
4. |
To re-appoint Kost Forer Gabbay & Kasierer (a member of Ernst and Young Global), as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2019, and until immediately following
the next annual general meeting.
|
Beneficial Owner
|
Number of Ordinary Shares Beneficially Owned
|
Percent of Ordinary Shares Beneficially Owned
(1)
|
||||||
ARK Investment Management LLC
(2)
|
7,105,958
|
11.39 |
%
|
|||||
Anat Cohen-Dayag
|
1,018,687 | 1.61 |
%
|
|||||
All Office Holders, including directors, as a group, (consists of 15 persons)
|
2,774,039 |
4.27
|
%
|
(1) |
Based upon 62,394,260 Ordinary Shares issued and outstanding as of July 31, 2019.
|
(2) |
Based upon information provided by the shareholder in its Form 13G filed with the SEC on February 14, 2019. With respect to the ordinary shares reported in the Schedule 13G, ARK Investment Management LLC (ARK) is indicated as having
(i) sole voting and dispositive power with respect to 6,906,103 ordinary shares, (ii) shared voting power with respect to 56,726 ordinary shares and (iii) shared dispositive power with respect to 199,855 ordinary shares. Furthermore, in
such filing ARK indicated aggregate beneficial ownership of 7,105,958 ordinary shares. The address of the principal business office of ARK Investment Management LLC is 3 East 28th Street, 7th Floor, New York, NY 10016.
|
|
(a) |
Mr. Paul Sekhri be, and he hereby is, re-elected to serve as a member of the Board of Directors of the Company for a term of approximately one year expiring at the end of the annual general meeting of shareholders of the Company to
be held in 2020, and when his successor has been duly elected; and
|
|
(b) |
Dr. Jean-Pierre Bizzari be, and he hereby is, elected to serve as a member of the Board of Directors of the Company for a term of approximately one year expiring at the end of the annual general meeting of shareholders of the Company
to be held in 2020 and when his successor has been duly elected; and
|
|
(c) |
Dr. Anat Cohen-Dayag be, and she hereby is, re-elected to serve as a member of the Board of Directors of the Company for a term of approximately one year expiring at the end of the annual general meeting of shareholders of the
Company to be held in 2020 and when her successor has been duly elected; and
|
|
(d) |
Mr. Gilead Halevy be, and he hereby is, re-elected to serve as a member of the Board of Directors of the Company for a term of approximately one year expiring at the end of the annual general meeting of shareholders of the Company to
be held in 2020 and when his successor has been duly elected; and
|
|
(e) |
Mr. Eran Perry be, and he hereby is, elected to serve as a member of the Board of Directors of the Company for a term of approximately one year expiring at the end of the annual general meeting of shareholders of the Company to be
held in 2020 and when his successor has been duly elected; and
|
|
(f) |
Ms. Kinneret Livnat Savitzky be, and she hereby is, re-elected to serve as a member of the Board of Directors of the Company for a term of approximately one year expiring at the end of the annual general meeting of shareholders of
the Company to be held in 2020 and when her successor has been duly elected; and
|
|
(g) |
Mr. Sandy Zweifach be, and he hereby is, re-elected to serve as a member of the Board of Directors of the Company for a term of approximately one year expiring at the end of the annual general meeting of shareholders of the Company
to be held in 2020 and when his successor has been duly elected.”
|
2018
|
2017
|
|||||||
Audit Fees
|
$
|
148,500
|
$
|
157,500
|
||||
Audit Related Fees
|
$
|
90,000
|
$
|
15,000
|
||||
Tax Fees
|
$
|
6,500
|
$
|
2,500
|
||||
Total
|
$
|
245,000
|
$
|
175,000
|
|
By Order of the Board of Directors,
|
|
|
|
/s/ Paul Sekhri
Paul Sekhri
Chairman of the Board
Holon, Israel
August 5, 2019
|
|
1.
|
The name of the Company : | קומפיוג'ן בע"מ |
COMPUGEN LTD.
|
|
2. |
The purpose of the Company is to engage in any lawful act or activity for which companies may be organized under the Israeli Companies Law, 1999.
|
|
3. |
Members Liability
:
The liability of each of the members is limited.
|
|
4. |
Authorized Share Capital
:
The share capital of the Company is NIS
The rights attached to each class of shares will be determined in the Company's Articles of Association.
|
|
5. |
Changes to the Memorandum
The Company may, by a simple majority of the votes cast (abstentions being disregarded), in person, by proxy or by proxy card, or by such other majority as shall be set forth in
its Articles of Association from time to time, change its name; change its purposes; increase its registered (authorized) share capital by creation of new shares in such amount and of such nominal (par) values and with such
rights, preferences and restrictions as the resolution approving the creation of such shares shall provide; consolidate its share capital (issued or unissued) or any portion thereof and divide it into shares of larger nominal
value than the nominal value of its existing shares; subdivide its shares (issued or unissued) or any of them into shares of smaller nominal value; cancel any unissued shares, provided there is no obligation of the Company,
including a contingent obligation, to issue them, and reduce in such manner its share capital by the amount of the shares so cancelled; and/or reduce its share capital in any manner subject to any authorization or consent required
by law.
|
|
6. |
We the undersigned are desirous of being formed into a Company in pursuant to this Memorandum of Association and we respectively agree to take the number of shares in the capital of the Company set opposite our respective names.
|
1.
|
Company Name
The name of the Company is "Compugen Ltd." (the "
Company
").
|
2.
|
Purpose
The purpose of the Company is to engage in any lawful act or activity for which companies may be organized under the Israeli Companies Law, 1999 (the "
Companies
Law
").
|
3.
|
Interpretation
|
|
(a) |
Unless the subject or the context otherwise requires: (i) words and expressions defined in the Companies Law in force on the date when these Articles or any amendment thereto, as the case may be, first became effective shall
have the same meanings defined therein; (ii) words and expressions importing the singular shall include the plural and vice versa; (iii) words and expressions importing the masculine gender shall include the feminine gender; and
(iv) words and expressions importing persons shall include corporate bodies.
|
|
(b) |
The captions in these Articles are for convenience only and shall not be deemed a part hereof or affect the construction of any provision hereof.
|
|
(c) |
The specific provisions of these Articles shall supercede the provisions of the Companies Law to the extent permitted under the Companies Law. With respect to any matter that is not specifically addressed in these Articles,
the provisions of the Companies Law shall govern.
|
4.
|
Limitation of Liability
The liability of each shareholder for the Company's obligations is limited to the unpaid sum, if any, owing to the Company in consideration for the issuance of the shares held by
such shareholder.
|
5.
|
Authorized Share Capital
|
6.
|
Ordinary Shares
|
7.
|
Increase of Share Capital
|
8.
|
Special Rights; Modifications of Rights
|
|
(a) |
The Company may, from time to time, provide for shares with such preferred or deferred rights or rights of redemption or other special rights and/or such restrictions, whether in regard to dividends, voting, repayment of
share capital or otherwise, as may be stipulated in the resolution pursuant to which such shares are created.
|
|
(b) | (i) | If at any time the share capital is divided into different classes of shares, the rights attached to any class, unless otherwise provided by these Articles, may be modified or abrogated by the Company, subject to the consent in writing of, or sanction of a resolution passed by, the holders of a majority of the issued shares of such class at a separate general meeting of the holders of the shares of such class. |
|
(ii) |
The provisions of these Articles relating to General Meetings shall, mutatis mutandis, apply to any separate general meeting of the holders of the shares of a particular class; provided, however, that the requisite quorum
at any such separate general meeting shall be two or more shareholders present in person or proxy and holding not less than twenty-five percent (25%) of the issued shares of such class.
|
|
(iii) |
Unless otherwise provided by these Articles, the enlargement of an existing class of shares, or the issuance of additional shares thereof, or the creation of a new class of shares identical to an existing class of
shares in all respects shall not be deemed, for purposes of this Article 8(b), to modify or abrogate the rights attached to the previously issued shares of such class or of any other class.
|
9.
|
Consolidation, Subdivision, Cancellation and Reduction of Share Capital
|
|
(a) |
The Company may, from time to time (subject, however, to the provisions of Article 8(b) hereof and to applicable law):
|
|
(i) |
consolidate and divide any or all of its issued or unissued share capital into shares of larger nominal value than its existing shares;
|
|
(ii) |
subdivide its shares (issued or unissued) or any of them, into shares of smaller nominal value than is fixed by these Articles (subject, however, to the provisions of the Companies Law), and the resolution whereby any share
is subdivided may determine that, as among the holders of the shares resulting from such subdivision, one or more of the shares may, as compared with the others, have any such preferred or deferred rights or rights of redemption
or other special rights, or be subject to any such restrictions, as the Company has power to attach to unissued or new shares;
|
|
(iii) |
cancel any shares, which at the date of the adoption of such resolution have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled; or
|
|
(iv) |
reduce its share capital in any manner, subject to any authorization or consent required by law.
|
|
(b) |
With respect to any consolidation of issued shares into shares of larger nominal value, and with respect to any other action which may result in fractional shares, the board of directors of the Company (the "
Board
" or the "
Board of Directors
") may settle any difficulty which may arise with regard thereto, as it deems fit, including, inter alia, resort to one
or more of the following actions:
|
|
(i) |
determine, as to the holder of shares so consolidated, which issued shares shall be consolidated into each share of larger nominal value;
|
|
(ii) |
allot, in contemplation of or subsequent to such consolidation or other action, such shares or fractional shares sufficient to preclude or remove fractional share holdings;
|
|
(iii) |
redeem, in the case of redeemable shares, and subject to applicable law, such shares or fractional shares sufficient to preclude or remove fractional share holdings;
|
|
(iv) |
cause the transfer of fractional shares by certain shareholders of the Company to other shareholders thereof so as to most expediently preclude or remove any fractional shareholdings, and cause the transferees to pay the
transferors the fair value of fractional shares so transferred, and the Board of Directors is hereby authorized to act as agent for the transferors and transferees with power of substitution for purposes of implementing the
provisions of this sub-Article 9(b)(iv).
|
10.
|
Issuance of Share Certificates; Replacement of Lost Certificates
|
|
(a) |
Share certificates shall bear the stamp or seal of the Company and shall bear the manual or printed signature of a member of the Board of Directors (a "
Director
") and/or of any other
person or persons authorized thereto by the Board of Directors. In the event that any Director or such other authorized person who has signed or whose printed signature has been placed upon a certificate shall have ceased to be
such Director or authorized person before such certificate is issued, it may be issued by the Company with the same effect as if it were such Director or authorized person at the date of issue.
|
|
(b) |
Each shareholder shall be entitled to one numbered certificate for all the shares of any class registered in his name, and if the Board of Directors so approves, to several certificates, each for one or more of such shares.
|
|
(c) |
A share certificate registered in the names of two or more persons shall be delivered to the person first named in the Register (as defined in Article 24(a) below) in respect of such co-ownership and such delivery shall be
deemed sufficient delivery to all co-owners. The Company shall not be obligated to issue more than one share certificate to the joint holders.
|
|
(d) |
If a share certificate is defaced, lost or destroyed, it may be replaced, upon payment of such fee, and upon the furnishing of such evidence of ownership and such indemnity, as the Board of Directors deem fit.
|
11.
|
Registered Holder
|
12.
|
Allotment of Shares
The authorized and unissued shares shall be under the control of the Board of Directors, who shall have the power to allot shares or otherwise dispose of them to such persons, on
such terms and conditions, and at such times, as the Board of Directors may deem fit, and the power to give to any person the option to acquire from the Company any shares, during such time and for such consideration as the Board
of Directors may deem fit.
|
13.
|
Payment in Installments
If by the terms of allotment of any share, the whole or any part of the price thereof shall be payable in installments, every such installment shall, when due, be paid to the
Company by the then registered holder(s) of the share or the person(s) entitled thereto.
|
14.
|
Calls on Shares
|
|
(a) |
The Board of Directors may, from time to time, make such calls as it may think appropriate upon shareholders in respect of any sum unpaid in respect of shares held by such shareholders which is not, by the terms of allotment
thereof or otherwise, payable at a fixed time, and each shareholder shall pay the amount of every call so made upon him (and of each installment thereof if the same is payable in installments), to the person(s) and at the
time(s) and place(s) designated by the Board of Directors, as any such time(s) may be thereafter extended and/or such person(s) or place(s) changed. Unless otherwise stipulated in the resolution of the Board of Directors (and
in the notice hereafter referred to), each payment in response to a call shall be deemed to constitute a pro rata payment on account of all shares in respect of which such call was made.
|
|
(b) |
Notice of any call shall be given in writing to the shareholder(s) in question not less than fourteen (14) days prior to the time of payment, specifying the time and place of payment, and designating the person to whom such
payment shall be made; provided however, that before the time for any such payment, the Board of Directors may, by notice in writing to such shareholder(s), revoke such call in whole or in part, extend such time, or alter such
person and/or place. In the event of a call payable in installments, only one notice thereof need be given.
|
|
(c) |
If, by the terms of allotment of any share or otherwise, any amount is made payable at any fixed time, every such amount shall be payable at such time as if it were a call duly made by the Board of Directors and of which due
notice had been given, and all the provisions herein contained with respect to such calls shall apply to each such amount.
|
|
(d) |
The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof and all interest payable thereon.
|
|
(e) |
Any amount unpaid in respect of a call shall bear interest from the date on which it is payable until actual payment thereof, at such rate (not exceeding the then prevailing debitory rate charged by leading commercial banks
in Israel), and at such time(s) as the Board of Directors may prescribe. The Board of Directors shall, however, be at liberty to waive the payment of interest, wholly or in part. No shareholder shall be entitled to receive any
dividend or to exercise any privileges as a shareholder until they have paid all calls for the time being due and payable on every share held by them whether alone or jointly with any other person along with interest and
expenses, if any.
|
|
(f) |
Upon the allotment of shares, the Board of Directors may provide for differences among the allottees of such shares as to the amount of calls and/or the times of payment thereof.
|
15.
|
Prepayment
With the approval of the Board of Directors, any shareholder may pay to the Company any amount not yet payable in respect of such shareholder's shares, and the Board of Directors
may approve the payment of interest on any such amount until the same would be payable if it had not been paid in advance, at such rate and time(s) as may be approved by the Board of Directors. The Board of Directors may at any
time cause the Company to repay all or any part of the money so advanced, without premium or penalty. Nothing in this Article 15 shall derogate from the right of the Board of Directors to make any call before or after receipt by
the Company of any such advance.
|
16.
|
Forfeiture and Surrender
|
|
(a) |
If any shareholder fails to pay any amount payable in respect of a call, or interest thereon as provided for herein, on or before the day fixed for payment of the same, the Company, by resolution of the Board of Directors,
and subject to the provisions of the Companies Law, may at any time thereafter, so long as the said amount or interest remains unpaid, forfeit all or any of the shares in respect of which said call had been made. Any expense
incurred by the Company in attempting to collect any such amount or interest, including, inter alia, attorneys' fees and costs of legal suit, shall be added to, and shall, for all purposes (including the accrual of interest
thereon), constitute a part of the amount payable to the Company in respect of such call.
|
|
(b) |
Upon the adoption of a resolution of forfeiture, the Board of Directors shall cause notice thereof to be given to such shareholder, which notice shall state that, in the event of the failure to pay the entire amount so
payable within a period stipulated in the notice (which period shall not be less than fourteen (14) days and which may be extended by the Board of Directors), such shares shall be ipso facto forfeited, provided, however, that,
prior to the expiration of such period, the Board of Directors may nullify such resolution of forfeiture, but no such nullification shall stop the Board of Directors from adopting a further resolution of forfeiture in respect of
the non-payment of the same amount.
|
|
(c) |
Whenever shares are forfeited as herein provided, all dividends theretofore declared in respect thereof and not actually paid shall be deemed to have been forfeited at the same time.
|
|
(d) |
The Company, by resolution of the Board of Directors, may accept the voluntary surrender of any share.
|
|
(e) |
Any share forfeited or surrendered as provided herein shall become the property of the Company, and the same, subject to the provisions of these Articles, may be sold, re-allotted or otherwise disposed of as the Board of
Directors thinks fit.
|
|
(f) |
Any shareholder whose shares have been forfeited or surrendered shall cease to be a shareholder in respect of the forfeited or surrendered shares, but shall, notwithstanding, be liable to pay, and shall forthwith pay, to the
Company, all calls, interest and expenses owing upon or in respect of such shares at the time of forfeiture or surrender, together with interest thereon from the time of forfeiture or surrender until actual payment, at the rate
prescribed in Article 14(e) above, and the Board of Directors, in its sole discretion, may enforce the payment of such moneys, or any part thereof, but shall not be under any obligation to do so. In the event of such forfeiture
or surrender, the Company, by resolution of the Board of Directors, may accelerate the date(s) of payment of any or all amounts then owing by the shareholder in question (but not yet due) in respect of all shares owned by such
shareholder, solely or jointly with another, and in respect of any other matter or transaction whatsoever.
|
|
(g) |
The Board of Directors may at any time, before any share so forfeited or surrendered shall have been sold, re-allotted or otherwise disposed of, nullify the forfeiture or surrender on such conditions as it thinks fit, but no
such nullification shall stop the Board of Directors from re-exercising its powers of forfeiture pursuant to this Article 16.
|
17.
|
Lien
|
|
(a) |
Except to the extent the same may be waived or subordinated in writing, the Company shall have a first and paramount lien upon all the shares registered in the name of each shareholder (without regard to any equitable or
other claim or interest in such shares on the part of any other person), and upon the proceeds of the sale thereof, for such shareholders debts, liabilities and engagements arising from any cause whatsoever, solely or jointly
with another, to or with the Company, whether the period for the payment, fulfillment or discharge thereof shall have actually arrived or not. Such lien shall extend to all dividends from time to time declared in respect of
such share. Unless otherwise provided, the registration by the Company of a transfer of shares shall be deemed to be a waiver on the part of the Company of the lien (if any) existing on such shares immediately prior to such
transfer.
|
|
(b) |
The Board of Directors may cause the Company to sell any shares subject to such lien when any such debt, liability or engagement has matured, in such manner as the Board of Directors may think fit, but no such sale shall be
made unless such debt, liability or engagement has not been satisfied within fourteen (14) days after written notice of the intention to sell shall have been served on such shareholder, or such shareholder's executors or
administrators.
|
|
(c) |
The net proceeds of any such sale, after payment of the costs thereof, shall be applied in or toward satisfaction of the debts, liabilities or engagements of such shareholder (whether or not the same have matured), or any
specific part of the same (as the Company may determine), and the residue (if any) shall be paid to the shareholder, such shareholder's executors, administrators or assigns.
|
18.
|
Sale after Forfeiture or Surrender or in Enforcement of Lien
Upon any sale of shares after forfeiture or surrender or for enforcing a lien, the Board of Directors may appoint a person to execute an instrument of transfer of the shares so
sold and cause the purchaser's name to be entered in the Register in respect of such shares, and the purchaser shall not be bound to see to the regularity of the proceedings, or to the application of the purchase money, and after
such purchaser's name has been entered in the Register in respect of such shares, the validity of the sale shall not be impeached by any person, and the remedy of any person aggrieved by the sale shall be in damages only and
against the Company exclusively.
|
19.
|
Redeemable Shares
The Company may, subject to the provisions of the Companies Law, issue redeemable shares and redeem the same upon such terms and conditions as determined by the Board of
Directors.
|
20.
|
Effectiveness and Registration
Any transfer of shares of the Company which have not been fully paid-up will be subject to the approval of the Board of Directors. The Board of Directors may, at its sole
discretion, refuse to approve a transfer of shares as aforesaid, without the need to provide reasoning for its decision. The shares of the Company, which have been fully paid-up are freely transferable. No transfer of shares
shall be registered or, if such approval is required, approved by the Board of Directors, unless a proper instrument of transfer (in form and substance satisfactory to the Board of Directors) has been submitted to the Company (or
its transfer agent), together with the share certificate(s) (if such have been issued) and such other evidence of title as the Board of Directors may require. Until the transferee has been registered in the Register in respect of
the shares so transferred, the Company may continue to regard the transferor as the owner thereof. The Board of Directors, may, from time to time, prescribe a reasonable fee for the registration of a transfer.
|
21.
|
The Board of Directors may, in its discretion to the extent it deems necessary, close the Register for registrations of transfers of shares for a period determined by the Board of
Directors, and no registrations of transfers of shares shall be made by the Company for the period during which the Register is so closed.
|
22.
|
Decedents' Shares
|
|
(a) |
In case of a share registered in the names of two or more holders, the Company may recognize the survivor(s) as the sole owner(s) thereof unless and until the provisions of Article 22 (b) have been effectively invoked.
|
|
(b) |
Any person becoming entitled to a share in consequence of the death of any person, upon producing evidence of the grant of probate or letters of administration or declaration of succession (or such other evidence as the Board
of Directors may reasonably deem sufficient that he sustains the character in respect of which he proposes to act under this Article or of his title), shall be registered as a shareholder in respect of such share, or may,
subject to the regulations as to transfer herein contained, transfer such share.
|
23.
|
Receivers and Liquidators
|
|
(a) |
The Company may recognize the receiver or liquidator of any corporate shareholder in winding-up or dissolution, or the receiver or trustee in bankruptcy of any shareholder, as being entitled to the shares registered in the
name of such shareholder.
|
|
(b) |
The receiver or liquidator of a corporate shareholder in winding-up or dissolution, or the receiver or trustee in bankruptcy of any shareholder, upon producing such evidence as the Board of Directors may deem sufficient that
he sustains the character in respect of which he proposes to act under this Article or of his title, shall with the consent of the Board of Directors (which the Board of Directors may grant or refuse in its absolute discretion),
be registered as a shareholder in respect of such shares, or may, subject to the regulations as to transfer herein contained, transfer such shares.
|
|
(a) |
The Company shall keep a Register (as defined in this Article 24(a)) in which it may record such information as may be deemed appropriate by the Board of Directors and/or as may be permitted by the Companies Law or these
Articles. In addition, the Company shall record in the Register the following information:
|
|
(i) |
The names and addresses of the shareholders, the number of shares held by each shareholder and the amount paid or the amount to be considered as paid on the shares of each shareholder;
|
|
(ii) |
The day each person was registered in the Register as a shareholder;
|
|
(iii) |
The amounts called, if any, that are due on the shares of each shareholder; and
|
|
(iv) |
Any other information required by the Companies Law or these Articles to be recorded in the Register.
|
|
|
For the purposes of these Articles the "
Register
" means the principal register of shareholders of the Company, to be kept in accordance with the
Companies Law, and/or, if the Company shall have any additional or branch register(s), any such additional or branch register(s) as the case may be.
|
|
(b) |
The principal register shall be kept at the registered office of the Company for the time being (the "
Office
") and, apart from the times the Register is closed in accordance with the
provisions of the Companies Law or these Articles, shall be open to the inspection of any shareholder free of charge, and of any other person at such fee as the Company shall determine for each matter, during regular business
hours.
|
|
(c) |
The Register may be closed for such period, if any, as the Board of Directors shall determine from time to time, on the condition that the Register shall not be closed for a period exceeding 30 days during any calendar year;
and on the additional condition that the Register shall not be closed unless a notice has been published in accordance with the provisions of the Companies Law, if required.
|
25.
|
Annual General Meetings
An annual General Meeting of shareholders shall be held once in every calendar year at such time (to the extent required by the Companies Law, within a period of not more than
fifteen (15) months after the last preceding annual General Meeting) and at such place either in the State of Israel or abroad as may be determined by the Board of Directors. Such meetings shall be called "
Annual General Meetings
".
|
26.
|
Special General Meetings
|
|
(a) |
All general meetings of shareholders of the Company other than Annual General Meetings shall be called "
Special General Meetings
." A general meeting of shareholders of the Company,
whether it is an Annual General Meeting or a Special General Meeting, will be referred to as a "
General Meeting
".
|
|
(b) |
The Board of Directors may, whenever it thinks fit, convene a Special General Meeting at such time and place, in the State of Israel or abroad, as may be determined by the Board of Directors.
|
|
(c) |
The Board of Directors shall be obligated to convene a Special General Meeting, in accordance with the terms of the Companies Law, at such time and place, in the State of Israel or abroad, as may be determined by the Board of
Directors.
|
27.
|
Convening of General Meetings
|
|
(a) |
The Company shall not be required to deliver or serve notice (
'Hodaa'
) of General Meetings or of any adjournments thereof to any shareholder.
|
|
(b) |
Without derogating from the provisions of Article 27(a) above, and subject to applicable law and stock exchange rules and regulations, the Company will publicize the convening of General Meetings in any manner reasonably
determined by the Company and any such publication shall be deemed to have been duly made, given and delivered to all shareholders on the date on which it is first made, posted, filed or published in the manner so determined by
the Company in its sole discretion. The date of publication in respect of a General Meeting as set forth in this Article, and the date of the meeting shall be counted as part of the days comprising any notice period with respect
to such General Meeting.
|
|
(c) |
If required under the Companies Law, any shareholder or shareholders, holding at least one percent (1%) of the voting rights in the issued share capital of the Company, may, pursuant to the Companies Law, request that the
Board of Directors include a certain item on the agenda of the meeting to be held in the future. In addition, subject to the Companies Law, the Board of Directors may include such item on the agenda only if such request has been
submitted to the Company in writing at least eight (8) weeks prior to the date of the meeting (or such shorter period as may be determined by the Board of Directors).
|
28.
|
Record Date for General Meetings and Other Action
Notwithstanding any provision of these Articles to the contrary, in order to allow the Company to determine the shareholders entitled to vote at any General Meeting or any
adjournment thereof, or to express consent to or dissent from any corporate action in writing without a meeting, or to take or be the subject to, any other action, the Board of Directors may determine a record date, which shall not
be more than forty (40) days (or any longer period permitted under the Companies Law), nor less than four (4) days before the date of such meeting or other action. A determination of shareholders of record entitled to vote at a
meeting shall apply to any adjournment of the meeting; provided however, that the Board of Directors may determine a new record date for the adjourned meeting. No persons other than holders of record of shares of the Company as of
such record date shall be entitled to participate in and vote at such General Meeting, or to exercise such other right, as the case may be.
|
29.
|
Participation
Only shareholders of record on the record date determined by the Board of Directors pursuant to Article 28 above shall be entitled to participate in and vote at a General Meeting.
|
30.
|
Quorum
|
|
(a) |
Two or more shareholders (not in default in payment of any sum referred to in Article 37 (a) hereof), present in person, by proxy, by proxy card or by electronic voting, and holding shares conferring in the aggregate
twenty-five percent (25%) or more of the voting power of the Company, shall constitute a quorum at General Meetings. No business shall be transacted at a General Meeting, or at any adjournment thereof, unless the requisite
quorum is present within half an hour from the time appointed for the General Meeting.
|
|
(b) |
If within half an hour from the time appointed for the General Meeting a quorum is not present, the General Meeting shall stand adjourned to the same day in the following week, at the same time and place or to such other
later day, time and place as the Directors may determine and specify in the publication with respect to the General Meeting. It shall not be necessary to give notice of or publicize such adjournment. No business shall be
transacted at any adjourned meeting except business that might lawfully have been transacted at the meeting as originally called. At such adjourned meeting, any number of participants will constitute a quorum (not in default as
aforesaid) present in person, by proxy, by proxy card or by electronic voting, shall constitute a quorum; provided, however, that Special General Meeting which was convened by the Board upon the demand of shareholders or
Directors then in office, or directly by such shareholders or Directors, in accordance the terms of the Companies Law, shall be cancelled.
|
|
(c) |
The Board of Directors may determine, at its sole discretion, the matters that may be voted upon at the meeting by proxy card, in addition to the matters listed in Section 87(a) of the Companies Law.
|
31.
|
Chairman
The Chairman, if any, of the Board of Directors, or any other director or office holder of the Company which may be designated for this purpose by the Board of Directors, shall
preside as Chairman at every General Meeting of the Company. If there is no such Chairman, or if the appointed Chairman is unwilling to take the chair, or if he shall have indicated in advance that he will not be attending, or if
at any meeting such Chairman is not present within thirty (30) minutes after the time fixed for holding the meeting, those present at the meeting shall choose someone present to be Chairman of the meeting. The office of Chairman
shall not, by itself, entitle the holder thereof to vote at any General Meeting nor shall it entitle such holder to a second or casting vote (without derogating, however, from the rights of such Chairman to vote as a shareholder
or proxy of a shareholder if, in fact, he or she is also a shareholder or such proxy).
|
32.
|
Adoption of Resolutions at General Meetings
|
|
(a) |
Except with respect to matters which require the approval of a special majority under the Companies Law, all resolutions of the shareholders shall be deemed adopted if approved by the holders of a simple majority of the
voting power represented at the meeting, in person, by proxy, by proxy card or by electronic voting, and voting thereon. It is hereby clarified that such simple majority of the voting power represented at the meeting is also
required to approve any amendment to these Articles of Association.
|
|
(b) |
Every question submitted to a General Meeting shall be decided by a show of hands, but if a written ballot is demanded by any shareholder present in person or by proxy and entitled to vote at the meeting, the same shall be
decided by such ballot. A written ballot may be demanded before the proposed resolution is voted upon or immediately after the declaration by the Chairman of the results of the vote by a show of hands. If a vote by written
ballot is taken after such declaration, the results of the vote by a show of hands shall be of no effect, and the proposed resolution shall be decided by such written ballot. The demand for a written ballot may be withdrawn at
any time before the same is conducted, in which event another shareholder may then demand such written ballot. The demand for a written ballot shall not prevent the continuance of the meeting for the transaction of business
other than the question on which the written ballot has been demanded. All votes properly tendered by proxy card or by electronic voting, as set forth in Articles 37 (c)(iii) and (c)(v), with respect to a given resolution shall
be counted for purposes of determining the outcome of any vote with respect to such resolution taken by show of hands or by written ballot.
|
|
(c) |
A declaration by the Chairman of the meeting that a resolution has been carried unanimously, or carried by a particular majority, or lost, and an entry to that effect in the minutes of the meeting, shall be prima facie
evidence of the fact without proof of the number or proportion of the votes recorded in favor of or against such resolution.
|
33.
|
Manner of the Meeting
The Board of Directors may, at its sole discretion, resolve to enable persons entitled to attend a General Meeting to do so by simultaneous attendance and participation at the
principal meeting place and a satellite meeting place or places anywhere in the world and the shareholders present in person, by proxy or by written ballot at satellite meeting places shall be counted in the quorum for and
entitled to vote at the General Meeting in question, and that meeting shall be duly constituted and its proceedings valid, provided that the chairman of the General Meeting is satisfied that adequate facilities are available
throughout the General Meeting to ensure that shareholders attending at all the meeting places are able to:
|
|
(a) |
participate in the business for which the meeting has been convened;
|
|
(b) |
hear all persons who speak (whether by the use of microphones, loudspeakers audio-visual communications equipment or otherwise) in the principal meeting place and any satellite meeting place(s); and
|
|
(c) |
be heard by all other persons so present in the same way.
|
35.
|
Power to Adjourn
|
|
(a) |
The Chairman of a General Meeting at which a quorum is present may, with the consent of the holders of a majority of the voting power represented in person or by proxy and voting on the question of adjournment (and shall if
so directed by the meeting), adjourn the meeting, or the discussion or resolution in any item on the agenda for the meeting, from time to time and from place to place, but no business shall be transacted at any adjourned meeting
except business which might lawfully have been transacted at the meeting as originally called.
|
|
(b) |
It shall not be necessary to give any notice of an adjournment, however, if the meeting is adjourned for thirty (30) days or more, the Company shall publicize the adjournment and the matters to be included on the agenda of
the adjourned General Meeting in the same manner in which it announced the convening of the original General Meeting.
|
36.
|
Voting Power
Subject to the provisions of Article 37 (a) and subject to the rights of holders of shares with special rights as to voting, every shareholder shall have one vote for each share
held by such shareholder of record, on every resolution, without regard to whether the vote thereon is conducted by a show of hands, by written ballot or by any other means.
|
37.
|
Voting Rights
|
|
(a) |
No shareholder shall be entitled to vote at any General Meeting (or be counted as a part of the quorum thereat), unless all calls and other sums then payable by such shareholder in respect of such shareholder's shares in the
Company have been paid.
|
|
(b) |
A company or other corporate body being a shareholder of the Company may, subject to applicable law, authorize any person to be its representative at any General Meeting of the Company or execute or deliver a proxy on its
behalf. Any person so authorized shall be entitled to exercise on behalf of such shareholder all the power that the latter could have exercised if it were an individual shareholder. Upon the request of the Chairman of the
meeting, written evidence of such authorization (in form acceptable to the Chairman) shall be delivered to the Chairman.
|
|
(c) |
Any shareholder entitled to vote may vote in one of the following manners:
|
|
(i) |
personally;
|
|
(ii) |
by proxy (who need not be a shareholder of the Company);
|
|
(iii) |
by proxy card, provided it is completed and returned to the Company in accordance with its terms;
|
|
(iv) |
if the shareholder is a company or other corporate body, by a representative authorized pursuant to Article 37 (b); or
|
|
(v) |
by electronic voting; shareholders who hold shares through members of the Tel Aviv Stock Exchange ("
TASE
"), may vote electronically via the electronic voting system of the Israel
Securities Authority, upon terms and instructions received from the TASE member through which the shareholder holds his or her shares.
|
|
(d) |
If two or more persons are registered as joint holders of any share, the vote of the senior who tenders a vote, in person, by proxy, by proxy card or by electronic voting, shall be accepted to the exclusion of the vote(s) of
the other joint holder(s); and for this purpose seniority shall be determined by the order in which the names appear in the Register.
|
38.
|
Proxies; Instrument of Appointment
|
|
(a) |
The instrument appointing a proxy shall be in writing and shall be substantially in the following form:
|
"I ____________ (Name of Shareholder) of __________ (Address of Shareholder) being a shareholder of Compugen Ltd. hereby appoint ______________ (Name of Proxy) of ____________
(Address of Proxy) as my proxy to participate and vote for me and on my behalf at the General Meeting of the Company to be held on the _____ day of _______, 20__ and at any adjournment(s) thereof.
|
Signed this ______ day of ____________, 20__.
|
_________________________
|
(Signature of Appointer)"
|
|
or in any usual or common form or in such other form as may be approved by the Board of Directors, including a form which provides for a continuing proxy until the occurrence of
such date or event as is specified in the proxy. It shall be duly signed by the appointer or his duly authorized attorney, which signature shall be confirmed by an advocate or notary or bank or in any other manner acceptable to the
Chairman of the meeting or, if such appointer is a company or other corporate body, under its common seal or stamp or the hand of its duly authorized agent(s) or attorney(s).
|
|
The instrument appointing a proxy (and the power of attorney or other authority, if any, under which such instrument has been signed) shall either be delivered to the Company (at its
Office, or at its principal place of business or at the offices of its registrar and/or transfer agent or at such place as the Board of Directors may specify) not less than twenty four (24) hours before the time fixed for the meeting
at which the person named in the instrument proposes to vote, or presented to the Chairman at such meeting.
|
|
(b) |
Proxy cards shall be in such form, and substance, as shall be prescribed by the Board of Directors. Proxy cards shall be completed and delivered to the Company (at its Office, or at its principal place of business or at the
offices of its registrar and/or transfer agent or at such place as the Board of Directors may specify) in accordance with its terms.
|
|
(c) |
A vote cast pursuant to an instrument appointing a proxy or by proxy card, or pursuant to electronic voting, shall be valid notwithstanding the death, liquidation or winding-up of the appointing or voting shareholder (or of
his attorney-in-fact, if any, who signed such instrument), or the revocation of the appointment or vote, or the transfer of the share in respect of which the vote is cast, provided no written intimation of such death,
liquidation, winding-up, revocation or transfer shall have been received by the Company or by the Chairman of the meeting before such vote is cast and provided, further, that the appointing or voting shareholder, if present in
person at said meeting, may revoke the appointment or the electronic voting by means of a written or verbal notification to the Chairman, or otherwise.
|
|
(d) |
An instrument appointing a proxy shall be deemed revoked (i) upon receipt by the Company or the Chairman of the meeting, subsequent to receipt by the Company of such instrument, of written notice signed by the person signing
such instrument or by the shareholder appointing such proxy canceling the appointment thereunder (or the authority pursuant to which such instrument was signed) or of an instrument appointing a different proxy (and such other
documents, if any, required under this Article 38 (e) for such new appointment), provided such notice of cancellation or instrument appointing a different proxy were so received at the place and within the time for delivery of
the instrument revoked thereby as referred to in Article 38 (e) hereof, or (ii) if the appointing shareholder is present in person at the meeting for which such instrument of proxy was delivered, upon receipt by the Chairman of
such meeting of written notice from such shareholder of the revocation of such appointment, or if and when such shareholder votes at such meeting. A vote cast in accordance with an instrument appointing a proxy shall be valid
notwithstanding the revocation or purported cancellation of the appointment, or the presence in person of the appointing shareholder at a meeting for which it was rendered, unless such instrument of appointment was deemed
revoked in accordance with the foregoing provisions of this Article 38 (e) at or prior to the time such vote was cast.
|
|
(e) |
Without derogating from any of the above, if a shareholder voted in more than one way, his latest vote shall be counted; for this purpose: (a) the date on the proxy card shall be deemed the voting date; and (b) a vote cast by
the shareholder himself or by his proxy shall be deemed later to his vote by proxy card or by electronic voting.
|
39.
|
Powers of Board of Directors
|
|
(a) |
General
. The Board of Directors shall determine the Company's policies, oversee the activities of the chief executive officer (the "
Chief Executive Officer
"), and take such other
actions as are described in Section 92 of the Companies Law. The Board of Directors shall be empowered to exercise any power of the Company not conferred by the Companies Law or by these Articles on any other organ of the
Company. The authority conferred on the Board of Directors by this Article 39 shall be subject to the provisions of the Companies Law and these Articles.
|
|
(b) |
Borrowing Power
. The Board of Directors may from time to time, at its discretion, cause the Company to borrow or secure the payment of any sum or sums of money for the purposes of the Company, and may secure or
provide for the repayment of such sum or sums in such manner, at such times and upon such terms and conditions as it deems fit, and, in particular, by the issuance of bonds, perpetual or redeemable debentures, debenture stock,
or any mortgages, charges, or other securities on the undertaking or the whole or any part of the property of the Company, both present and future, including its uncalled or called but unpaid capital for the time being.
|
|
(c) |
Reserves
. The Board of Directors may, from time to time, set aside any amount(s) out of the profits of the Company as a reserve or reserves for any purpose(s) which the Board of Directors, in its absolute discretion,
shall deem fit, including without limitation, capitalization and distribution of bonus shares, and may invest any sum so set aside in any manner and from time to time deal with and vary such investments and dispose of all or any
part thereof, and employ any such reserve or any part thereof in the business of the Company without being bound to keep the same separate from other assets of the Company, and may subdivide or re-designate any reserve or cancel
the same or apply the funds therein for another purpose, all as the Board of Directors may deem fit from time to time.
|
40.
|
Exercise of Powers of Directors
|
|
(a) |
A meeting of the Board of Directors at which a quorum is present, whether in person or by any other means by which the Directors may hear each other simultaneously, shall be competent to exercise all the authorities, powers
and discretions vested in or exercisable by the Board of Directors.
|
|
(b) |
A resolution proposed at any meeting of the Board of Directors shall be deemed adopted if approved by a majority of the Directors present and entitled to vote when such resolution is put to a vote and voting thereon.
|
|
(c) |
A resolution in writing signed by all of the Directors or members of a Committee of the Board of Directors then in office and lawfully entitled to vote thereon (as conclusively determined by the Chairman of the Board of
Directors) or to which all of such Directors have agreed in writing or given their oral consent by telephone (provided that in such event, a written summary thereof has been approved and signed by the Chairman of the Board of
Directors of the Company) shall be deemed to have been unanimously adopted by a meeting of the Board of Directors or any Committee thereof duly convened and held.
|
41.
|
Audit Committee
|
|
(a) |
The Board of Directors shall appoint an Audit Committee. The composition of the Audit Committee shall, to the extent required, be in compliance with the Companies Law and with the rules of any stock exchange on which the
shares of the Company are traded.
|
|
(b) |
The duties of the Audit Committee shall be as provided by applicable law and/or applicable rules of any stock exchange on which the shares of the Company are traded and shall include:
|
|
(i) |
to detect any deficiencies in the business management of the Company, by among other things consulting with the Company’s internal auditor and independent auditors, and to propose to the Board of Directors ways of correcting
these deficiencies; and
|
|
(ii) |
to decide whether to approve actions and transactions requiring approval of the Audit Committee pursuant to the Companies Law.
|
42.
|
Delegation of Powers
|
|
(a) |
Subject to the Companies Law, the Board of Directors may delegate any or all of its powers to committees, each consisting of two or more persons (all of whose members must be Directors), and it may from time to time revoke
such delegation or alter the composition of any such committee. Any committee so formed (in these Articles referred to as a "Committee of the Board of Directors"), shall, in the exercise of the powers so delegated, conform to
any regulations imposed on it by the Board of Directors. The meetings and proceedings of any such Committee of the Board of Directors shall, mutatis mutandis, be governed by the provisions herein contained for regulating the
meetings of the Board of Directors, so far as not superseded by any regulations adopted by the Board of Directors under this Article. Unless otherwise expressly provided by the Board of Directors in delegating powers to a
Committee of the Board of Directors, such Committee shall not be empowered to further delegate such powers.
|
|
(b) |
Without derogating from the provisions of Article 55 below, the Board of Directors may, subject to the provisions of the Companies Law, from time to time appoint a Secretary to the Company, as well as officers, agents,
employees and independent contractors, as the Board of Directors may deem appropriate, and may terminate the service of any such person. The Board of Directors may, subject to the provisions of the Companies Law, determine the
powers and duties, as well as the terms and conditions of employment, of all such persons, and may require security in such cases and in such amounts as it deems appropriate.
|
|
(c) |
The Board of Directors may from time to time, by power of attorney or otherwise, appoint any person, company, firm or body of persons to be the attorney or attorneys of the Company at law or in fact for such purpose(s) and
with such powers, authorities and discretions, and for such period and subject to such conditions, as it deems fit, and any such power of attorney or other appointment may contain such provisions for the protection and
convenience of persons dealing with any such attorney as the Board of Directors may deem fit, and may also authorize any such attorney to delegate all or any of the powers, authorities and discretions vested in them.
|
43.
|
Number of Directors
The number of Directors shall consist of no less than five (5) Directors and no more than fourteen (14) Directors, unless otherwise resolved by the Annual General Meeting.
|
44.
|
Election, Appointment and Removal of Directors
|
|
(a) |
If at any time, the Company shall be required to appoint independent or external directors as may be required by law (“External Directors”) such directors shall serve on the Board according to the number required by law.
External Directors will be appointed and removed pursuant to and shall be governed by the relevant provisions of the law which applies to External Directors.
|
|
(b) |
The Directors (other than External Directors) shall be elected and dismissed by a simple majority of the voting power present and voting at an Annual General Meeting. Subject to the maximum number of Directors provided for
in Article 43 above, between Annual General Meetings, the Board of Directors shall be empowered to appoint Directors by a majority vote of the Directors then in office.
|
|
(c) |
Directors elected at an Annual General Meeting, except External Directors, if applicable, shall hold office until the end of the Annual General Meeting, immediately following the Annual General Meeting at which they were
elected and until their successors have been duly elected or until any such Directors' term of office terminates as provided in the Companies Law or due to any of the circumstances set forth in Article 47 below. Directors
appointed by the Board pursuant to Article 44(a) above, shall hold office until the end of the immediately following Annual General Meeting or until such Directors' term of office terminates as provided in the Companies Law or
due to any of the circumstances set forth in Article 47 below.
|
|
(d) |
Subject to applicable law, a Director who has ceased to hold office shall be eligible for re-election or re-appointment.
|
|
(e) |
The term of office of a Director will begin as of the date of the Annual General Meeting at which he was elected or as of the date of the meeting of the Board of Directors at which he was appointed (if appointed by the Board
pursuant to Article 44(b) above) or at such later date as is determined in the resolution electing or appointing him or pursuant thereto.
|
|
(f) |
Notwithstanding anything to the contrary in this Article 44, the shareholders may, at any time, by a resolution adopted by a simple majority of the voting power present and voting at a Special General Meeting, discharge from
office any Director, provided such Director is given a reasonable opportunity to state his or her case before the shareholders at the General Meeting and/or appoint a Director (provided that with respect to External Directors,
the requirements of the Companies Law are satisfied).
|
45.
|
Qualification of Directors
No person shall be disqualified to serve as a Director by reason of his not holding shares in the Company or, subject to applicable law, by reason of his having served as a
Director in the past.
|
46.
|
Continuing Directors in the Event of Vacancies
In the event of one or more vacancies in the Board of Directors, the continuing Directors may continue to act in every matter, and may fill any such vacancy in accordance with
Article 44(b); provided, however, that if they number less than a majority of the minimum number provided for pursuant to Article 43 hereof or, to the extent applicable, if the number of External Directors falls below the minimum
number required, they may only act in an emergency, and must call a General Meeting of the Company for the purpose of electing Directors to fill any or all vacancies, so that at least a majority of the minimum number of Directors
provided for pursuant to Article 43 hereof, or, to the extent applicable, the minimum number of External Directors, as the case may be, are in office as a result of said meeting.
|
47.
|
Vacation of Office
|
|
(a) |
The office of a Director shall be vacated by the Director's written resignation. Such resignation shall become effective on the date fixed therein, or upon the delivery thereof to the Company, whichever is later.
|
|
(b) |
The Company shall be entitled, at any time, to discharge from office any Director subject to and in accordance with Article 44(f).
|
|
(c) |
The office of a Director shall be vacated, ipso facto, upon the occurrence of any of the following: (i) his death, or, if the Director is a legal entity, it has adopted a resolution of voluntary liquidation or winding-up, or
a liquidation order has been issued with respect thereto; (ii) should he be declared to be legally incompetent; (iii) should he be declared bankrupt; or (iv) as otherwise provided in the Companies Law.
|
48.
|
Remuneration of Directors
No Director shall be paid any remuneration by the Company for such Director's services as a Director or for any other services provided to the Company, unless such remuneration
has been approved pursuant to the provisions of the Companies Law.
|
49.
|
Conflict of Interests
Subject to the provisions of the Companies Law, the Company may enter into any contract or otherwise transact any business with any director in which contract or business such
director has a personal interest, directly or indirectly; and may enter into any contract or otherwise transact any business with any third party in which contract or business a director has a personal interest, directly or
indirectly.
|
49A.
|
Alternate Director
Subject to the Companies Law, a Director may from time to time appoint an alternate for himself or herself (an “Alternate Director”), dismiss such Alternate Director and appoint
another instead of any Alternate Director whose office has been vacated for any reason, either for a particular meeting or permanently, subject to there being no objection to such appointment by any of the then serving directors. An
Alternate Director shall have all the rights and obligations of the appointing Director, excluding the right to appoint an Alternate Director.
|
50.
|
Meetings
|
|
(a) |
The Board of Directors shall convene meetings as required to fulfill the needs of the Company, but in any event shall convene at least one meeting in every three month period. The Board of Directors may meet and adjourn its
meetings and otherwise regulate such meetings and proceedings as the Directors deem fit. Meetings of the Board of Directors may be held telephonically or by any other means of communication provided that each Director
participating in such meeting can hear and be heard by all of the other Directors participating in such meeting.
|
|
(b) |
The Chairman of the Board of Directors may convene a meeting of the Board of Directors, provided that a notice is delivered a reasonable time prior to the applicable meeting. Notwithstanding, the Board may convene without
prior notice in urgent cases only, if the majority of the Directors has approved to do so. Subject to the terms of the Companies Law and without derogating from the preceding, the failure to give notice to a Director in the
manner required herein may be waived. The notice of meeting shall include the agenda of the meeting. Notice of the meetings of the Board of Directors may be given orally, by telephone, by email or be sent to each Director in
any other reasonable manner at the last physical or email address or telephone or facsimile number that the Director provided to the Company.
|
|
(c) |
Upon the receipt of a written request under any of the following circumstances, the Chairman of the Board of Directors shall, and in the absence of a Chairman, any Director receiving such written request shall, convene a
meeting of the Board of Directors, but not less than twenty-four (24) hours' notice shall be given of any meeting, unless such notice is waived:
|
|
(i) |
upon the receipt of a written request from any two Directors, or in the event that there are five or less Directors serving in office at the time, upon the written request of any Director;
|
|
(ii) |
upon the receipt of a written request from any Director requesting that a meeting be convened and stating that he or she has learned of an alleged violation of the law or of proper business procedure by the Company.
|
|
(iii) |
upon the receipt of any written request from the Chief Executive Officer of the Company requesting an action of the Board of Directors; or
|
|
(iv) |
upon the receipt of a written notice from the independent auditor(s) of the Company regarding material flaws in the oversight of the Company's internal accounting methods.
|
51.
|
Quorum
Until otherwise unanimously decided by the Board of Directors, a quorum at a meeting of the Board of Directors shall be constituted by the presence, in person, or by telephone
conference, of a majority of the Directors then in office who are lawfully entitled to participate and vote in the meeting (as conclusively determined by the Chairman of the Board of Directors).
|
52.
|
Chairman of the Board of Directors
|
53.
|
Validity of Acts Despite Defects
Subject to the provisions of the Companies Law, all acts done bona fide at any meeting of the Board of Directors, or of a Committee of the Board of Directors, or by any person(s)
acting as Director(s), shall, notwithstanding that it may afterwards be discovered that there was some defect in the appointment of the participants in such meetings or any of them or any person(s) acting as aforesaid, or that
they or any of them were disqualified, be as valid as if there were no such defect or disqualification.
|
54.
|
Minutes
|
|
(a) |
Minutes of each General Meeting and of each meeting of the Board of Directors (or any committee thereof) shall be recorded and duly entered in books provided for that purpose. Such minutes shall, in all events, set forth the
names of the persons present at the meeting and all resolutions adopted thereat.
|
|
(b) |
Any minutes as aforesaid, if purporting to be signed by the chairman of the meeting or by the chairman of the next succeeding meeting, shall constitute prima facie evidence of the matters recorded therein.
|
55.
|
Chief Executive Officer
|
|
(a) |
The Board of Directors shall from time to time appoint one or more persons, whether or not Directors, as Chief Executive Officers(s) of the Company and may confer upon such person(s), and from time to time modify or revoke,
such title(s) (including General Manager, Managing Director, Director General or any similar or dissimilar title). The appointment of the Chief Executive Officer(s) may be either for a fixed term or without any limitation of
time. The Board of Directors may from time to time remove or dismiss the Chief Executive Officer(s) from office and appoint another or others in the Chief Executive Officer(s)'s place.
|
|
(b) |
The Chief Executive Officer(s) shall manage the business of the Company, subject to the policies established by the Board of Directors, such limitations and restrictions as are set forth in these Articles or as the Board of
Directors may from time to time prescribe, and the provisions of the Companies Law.
|
|
(c) |
The Board of Directors may from time to time determine the Chief Executive Officer(s) salary and other terms and conditions of the Chief Executive Officer's employment, subject to the provisions of the Companies Law.
|
|
(d) |
Subject to the provisions of the Companies Law and provided the Board of Directors has authorized him or her to do so, the Chief Executive Officer of the Company may appoint additional Officer Holders (as such term is defined
in the Companies Law) of the Company (other than Directors and Chief Executive Officers), and determine the duties and powers of such Office Holders. The terms and conditions of such Office Holders' employment shall be approved
as required by the Companies Law. The Chief Executive Officer shall notify the Board of Directors of each such appointment at the first meeting of the Board of Directors following such appointment.
|
57.
|
Indemnity and Insurance
|
57.1
|
Insurance
.
Subject to the provisions of the Companies Law, the Company may enter into contracts to insure the liabilities of its Office Holders for any liabilities or expenses incurred by or
imposed upon them arising from or as a result of any act (or omission) carried out by them as Office Holders of the Company, to the fullest extent permitted by law, including in respect of any liability imposed on any Office Holder
with respect to any of the following:
|
|
(a) |
A breach of the duty of care owed to the Company or to any other person;
|
|
(b) |
A breach of the duty of loyalty owed to the Company, provided that, the Office Holder acted in good faith and had reasonable grounds to assume that such act would not prejudice the interests
of the Company;
|
|
(c) |
Monetary liabilities or obligations imposed on him in favor of another person.
|
|
(d) |
A payment which the Office Holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Israel Securities Law, 5728-1968 (the "
Securities Law
")
and expenses that the Office Holder incurred in connection with a proceeding under Chapters H'3, H'4 or I'1 of the Securities Law, including reasonable litigation expenses, including attorney's fees, or in connection
with Article D of Chapter Four of Part Nine of the Companies Law.
|
|
(e) |
Expenses incurred by the Office Holder in connection with a proceeding under Chapter G'1, of the Israel Restrictive Trade Practices Law, 5748-1988 (the "
Restrictive Trade Law
"),
including reasonable litigation expenses, including attorney's fees.
|
57.2
|
Indemnification
.
Subject to the provisions of the Companies Law, the Company may indemnify any of its Office Holders for all liabilities and expenses incurred by them arising from or as a result of
any act (or omission) carried out by them as Office Holders of the Company and which is indemnifiable pursuant to applicable law, to the fullest extent permitted by law, including, as follows:
|
|
(a) |
retrospectively; and
|
|
(b) |
undertake in advance to indemnify the Office Holders to the fullest extent permitted by law, including, as follows:
|
|
(i) |
For any monetary liabilities or obligations imposed on the Office Holder in favor of another person pursuant to a court judgment, including a compromise judgment or an arbitrator's
decision approved by a court;;
|
|
(ii) |
For any payments which the Office Holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Securities Law and expenses the Office Holder incurred in connection with a proceeding
under Chapters H'3, H'4 or I'1 of the Securities Law, including reasonable litigation expenses, including attorney's fees, or in connection with Article D of Chapter Four of Part Nine of the Companies Law;
|
|
(iii) |
For reasonable litigation expenses, including attorney’s fees, incurred by the Office Holder in consequence of an investigation or proceeding instituted against the Office Holder by an
authority that is authorized to conduct such investigation or proceeding, and which was concluded without filing of an indictment against the Office Holder and without imposing on the Office Holder a financial
obligation in lieu of criminal proceedings, or which was concluded without filing of an indictment against the Office Holder but with imposing on such Office Holder a financial obligation in lieu of criminal
proceedings in respect of an offense that does not require proof of criminal intent or in connection with a financial sanction;
For the purposes hereof: (i) “a proceeding that concluded without filing an indictment in a matter in respect of which an investigation was conducted”; and (ii) “financial obligation
in lieu of a criminal proceeding”, shall have the meanings specified in Section 260(a)(1A) of the Companies Law;
|
|
(iv) |
For reasonable litigation expenses, including attorney’s fees, incurred by the Office Holder or which the Office Holder is ordered to pay by a court, in a proceeding filed against the Office Holder by the Company or
on its behalf or by another person, or in a criminal action of which the Office Holder is acquitted, or in a criminal action in which the Office Holder is convicted of an offense that does not require proof of criminal
intent.
|
|
(v) |
For expenses incurred by the Office Holder in connection with a proceeding under Chapter G'1, of the Restrictive Trade Law, including reasonable litigation expenses, including attorney's fees.
|
|
(vi) |
For any other liability, obligation or expense indemnifiable or which may from time to time be indemnifiable by law.
|
|
|
provided that: (x) an undertaking in advance to indemnify an Office Holder with respect to the matters specified in Article 57.2(b)(i) above is limited to types of occurrences, which in the
opinion of the Board of Directors, in light of the Company's actual activities at the time of the undertaking, are foreseeable and to an amount or to criteria the Board of Directors has determined to be reasonable in the
circumstances; and (y) in the undertaking in advance to indemnify an Office Holder, the types of occurrences that the Board of Directors believes to be foreseeable in light of the Company's actual activities at the time
the undertaking to indemnify was given are mentioned, as is the amount or criteria that the Board of Directors determined to be reasonable under the circumstances.
|
57.3
|
Exemption of Office Holders
.
Subject to the provisions of the Companies Law, the Company may, to the fullest extent permitted by law, exempt and release its Office Holders, including in advance, from and against
all or part of such Office Holders’ liability for monetary or other damages due to, or arising or resulting from, a breach of their duty of care to the Company. The Directors of the Company are released and exempt from any and all
liability as aforesaid to the fullest extent permitted by law with respect to any such breach, which has been or may be committed.
|
57.4
|
The provisions of this Article 57 are not intended, and shall not be interpreted so as to restrict the Company, in any manner, in respect of the procurement of insurance and/or
indemnification and/or exculpation, in favor of any person who is not an Office Holder, including, without limitation, any employee, agent, consultant or contractor of the Company who is not an Office Holder.
|
57.5 |
The Company may, as aforesaid, indemnify, insure and exempt from liability any Office Holder to the fullest extent permitted by applicable law. Accordingly: (i) any amendment to the Companies Law, the
Securities Law, the Restrictive Trade Law or any other applicable law expanding the ability of the Company to indemnify, insure or exempt from liability any Office Holder, or expanding the right of any Office Holder to be indemnified,
insured or exempted from liability, beyond or in addition to the provisions of these Articles, shall, to the fullest extent possible, automatically and immediately apply to the Office Holders of the Company and be deemed as included
in these Articles to the fullest extent permitted by applicable law; and (ii) any amendment to the Companies Law, the Securities Law, the Restrictive Trade Law or any other applicable law adversely affecting the ability of the Company
to indemnify, insure or exempt from liability any Office Holder or adversely affecting the right of any Office Holder to be indemnified, insured or exempted from liability as provided for in these Articles shall have no effect post
factum and shall not affect the Company's obligations or ability to indemnify, insure or exempt from liability an Office Holder for any act (or omission) carried out prior to such amendment, unless otherwise provided by applicable
law.
|
58.
|
Rights of Signature and Rubber Stamp
|
|
(a) |
The Board of Directors shall be entitled to authorize any person or persons (who need not be Directors) to act and sign on behalf of the Company and to further delegate such signatory powers, and the acts and signatures of
such person(s) on behalf of the Company, shall bind the Company insofar as such person(s) acted and signed within the scope of such person's authority.
|
|
(b) |
The Company shall have at least one official rubber stamp.
|
59.
|
Declaration of Dividends
|
|
(a) |
Subject to the Companies Law, the Board of Directors may from time to time declare, and cause the Company to pay, such dividends as may appear to the Board of Directors to be justified by the profits of the Company. Subject
to the Companies Law, the Board of Directors shall determine the time for payment of such dividends and the record date for determining the shareholders entitled thereto.
|
|
(b) |
No dividend shall be paid otherwise than out of the profits of the Company.
|
60.
|
Amount Payable by Way of Dividends
|
|
(a) |
Subject to the provisions of these Articles and subject to any rights or conditions attached at that time to any share in the capital of the Company granting preferential, special or deferred rights or not granting any rights
with respect to dividends, the profits of the Company which shall be declared as dividends shall be distributed according to the proportion of the nominal value paid up or credited as paid up on account of the shares held at the
date so appointed by the Company and in respect of which such dividend is being paid, without regard to the premium paid in excess of the nominal value, if any. No amount paid or credited as paid on a share in advance of calls
shall be treated for purposes of this Article as paid on a share.
|
|
(b) |
No dividend shall carry interest against the Company.
|
61.
|
Payment in Specie
|
|
(a) |
A dividend may be paid, wholly or partly, by the distribution of specific assets of the Company or by the distribution of specific assets, paid-up shares, debentures or debenture stock of any other company, or in any one or
more such ways.
|
|
(b) |
Upon the determination of the Board of Directors, the Company (i) may cause any monies, investments, or other assets forming part of the undivided profits of the Company, standing to the credit of a reserve fund, or to the
credit of a reserve fund for the redemption of capital, or in the hands of the Company and available for dividends, or representing premiums received on the issuance of shares and standing to the credit of the share premium
account, to be capitalized and distributed among such of the shareholders as would be entitled to receive the same if distributed by way of dividend and in the same proportion, on the footing that they become entitled thereto as
capital, or may cause any part of such capitalized fund to be applied on behalf of such shareholders in paying up in full, either at par or at such premium as the resolution may provide, any unissued shares or debentures or
debenture stock of the Company which shall be distributed accordingly or in payment, in full or in part, of the uncalled liability on all issued shares or debentures or debenture stock if such liability exists, on a pro rata
basis; and (ii) may cause such distribution or payment to be accepted by such shareholders in full satisfaction of their interest in the said capitalized sum.
|
62.
|
Implementation of Powers under Articles 60 and 61
For the purpose of giving full effect to any resolution under Articles 60 or 61, the Board of Directors may settle any difficulty which may arise in regard to the distribution as it
thinks expedient, and, in particular, may issue fractional certificates or make payment in lieu of fractional shares in an amount determined by the Board of Directors, and may determine the value for distribution of any specific
assets, and may determine that cash payments shall be made to any shareholders upon the footing of the value so fixed, or that fractions of less value than the nominal value of one share may be disregarded in order to adjust the
rights of all parties, and may vest any such cash, shares, debentures, debenture stock or specific assets in trustees upon such trusts for the persons entitled to the dividend or capitalized fund as may seem expedient to the Board
of Directors.
|
63.
|
Deductions from Dividends
The Board of Directors may deduct from any dividend or other moneys payable to any shareholder in respect of a share any and all sums of money then payable by such shareholder to
the Company on account of calls or otherwise in respect of shares of the Company and/or on account of any other matter of transaction whatsoever.
|
64.
|
Retention of Dividends
|
|
(a) |
The Board of Directors may retain any dividend or other moneys payable or property distributable in respect of a share on which the Company has a lien, and may apply the same in or toward satisfaction of the debts,
liabilities, or engagements in respect of which the lien exists.
|
|
(b) |
The Board of Directors may retain any dividend or other moneys payable or property distributable in respect of a share in respect of which any person is, under these Articles, entitled to become a shareholder, or which any
person is, under these Articles, entitled to transfer, until such person shall become a shareholder in respect of such share or shall transfer the same.
|
65.
|
Unclaimed Dividends
All unclaimed dividends or other moneys payable in respect of a share may be invested or otherwise made use of by the Board of Directors for the benefit of the Company until
claimed. The payment by the Directors of any unclaimed dividend or such other moneys into a separate account shall not constitute the Company as a trustee in respect thereof, and any dividend unclaimed after a period of three (3)
years from the date of declaration of such dividend, and any such other moneys unclaimed after a period of three (3) years from the date the same were payable, shall be forfeited and shall revert to the Company; provided however,
that the Board of Directors may, at its sole discretion, cause the Company to pay any such dividend or such other moneys, or any part thereof, to a person who would have been entitled thereto had the same not reverted to the
Company.
|
66.
|
Mechanics of Payment
Any dividend or other moneys payable in cash in respect of a share may be paid by check sent through the post to, or left at, the registered address of the person entitled thereto
or by transfer to a bank account specified by such person (or, if two or more persons are registered as joint holders of such share or are entitled jointly thereto in consequence of the death or bankruptcy of the holder or
otherwise, to any one of such persons or to his bank account), or to such person and at such address as the person entitled thereto may direct in writing. Every such check shall be made payable to the order of the person to whom
it is sent, or to such person as the person entitled thereto as aforesaid may direct, and payment of the check by the banker upon whom it is drawn shall be a good discharge to the Company. Every such check shall be sent at the
risk of the person entitled to the money represented thereby.
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67.
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Receipt from a Joint Holder
If two or more persons are registered as joint holders of any share, or are entitled jointly thereto in consequence of the death or bankruptcy of the holder or otherwise, any one
of them may give effectual receipts for any dividend or other moneys payable or property distributable in respect of such share.
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68.
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Books of Account
The Board of Directors shall cause accurate books of account to be kept in accordance with the provisions of the Companies Law and of any other applicable law. Such books of
account shall be kept at the Office of the Company, or at such other place or places as the Board of Directors may deem appropriate, and they shall always be open to inspection by all Directors. No shareholder, not being a
Director, shall have any right to inspect any account or book or other similar document of the Company, except as conferred by law or authorized by the Board of Directors or by a resolution of a General Meeting of the Company.
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69.
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Fiscal Year
The Company's fiscal year shall commence on January 1st and end on the following December 31st.
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70.
|
Audit
The Company shall prepare financial statements in accordance with generally accepted accounting principles consistently applied and as required by the Companies Law and any other
applicable law. The Company’s annual financial statements shall be audited for correctness by the Company's auditor and shall be approved and signed by the Board of Directors.
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71.
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Auditors
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(a) |
The shareholders of the Company shall appoint an independent auditor(s) of the Company at the Annual General Meeting. Such appointment shall be in force until the end of the fiscal year for which the appointment is made, or
for a longer period if so resolved at the Annual General Meeting, but in no event for a period of more than three fiscal years. Subject to the provisions of the Companies Law, the shareholders of the Company may remove the
independent auditor(s) at any time.
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|
(b) |
The appointment, authorities, rights and duties of the independent auditor(s) of the Company shall be regulated by applicable law.
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|
(c) |
The Audit Committee shall have the authority to fix, in its discretion, the remuneration of the independent auditor(s) and shall bring such to the Board for approval, and the Company shall report to the shareholders on such
remuneration at the Annual General Meeting.
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72.
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Donations
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73.
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Notices
|
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(a) |
Without derogating from Article 27 above or Article 73(j) below, any notice or document may be served by the Company upon any shareholder personally or by sending it by mail addressed to such shareholder at such shareholder's
address as described in the Register or such other address as such shareholder may have designated in writing for the receipt of notices and documents. Any notice or document may be served by any shareholder upon the Company by
tendering the same in person to the Secretary or the Chief Executive Officer of the Company at the Office or by sending it by prepaid registered mail (airmail if posted outside Israel) to the Company at its Office. Any such
notice or document shall be deemed to have been served two (2) business days after it has been posted (five (5) business days if sent to a place not located on the same continent as the place from where it was posted), or when
actually received by the addressee if sooner than two (2) days or five (5) days, as the case may be, after it has been posted, or when actually tendered in person, to such shareholder (or to the Secretary or the Chief Executive
Officer); provided however, that notice may be sent by e-mail, facsimile or other electronic means and confirmed by registered mail as aforesaid, and such notice shall be deemed to have been given twenty-four (24) hours after
such e-mail, facsimile or other electronic communication has been sent or when actually received by such shareholder (or by the Company), whichever is earlier. If a notice is, in fact, received by the addressee, it shall be
deemed to have been duly served, when received, notwithstanding that it was defectively addressed or failed, in some respect, to comply with the provisions of this Article 73 (a).
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|
(b) |
All notices to be given to the shareholders shall, with respect to any share to which persons are jointly entitled, be given to whichever of such persons is named first in the Register, and any notice so given shall be
sufficient notice to the holders of such share.
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|
(c) |
If requested by the Company, each shareholder shall provide the Company with the shareholder's full street and mailing address, as well, if available, with facsimile number and email address. Without derogating from Article
27 above, any shareholder whose address is not described in the Register, and who shall not have designated in writing an address for the receipt of notices, shall not be entitled to receive any notice from the Company.
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|
(d) |
The Company may declare that any document(s) will be delivered or be available for review at the Office or any other place designated by the Board of Directors.
|
|
(e) |
Whenever it is required to give prior notice or publicize a specified number of days in advance or where a notice or publication is valid for a specified period, the day of the publication or the day of service of the notice
shall be included in such count or period.
|
|
(f) |
Service of notice to a relative of a shareholder living at the same address with him will be deemed service to such shareholder.
|
|
(g) |
Subject to applicable law, any shareholder, Director or other person entitled to receive notice in accordance with these Articles or law may waive notice, in advance or retroactively, in a particular case or type of case or
generally, and if so, notice will be deemed as having been duly served, and all proceedings or actions for which the notice was required will be deemed valid.
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|
(h) |
Any person entitled to a share by operation of law or by transfer, transmission or otherwise will be bound by any notice served or by any publication made pursuant to these Articles with respect to such share prior to his
being registered in the Register as owner of the shares.
|
|
(i) |
It shall not be necessary to set forth in detail in any publication as provided for in Article 27(b) above, the full text of any proposed resolutions and a general description of the nature of the matters on the agenda will
suffice. The Company shall be entitled, however, but shall be under no obligation to do so, to specify in any publication in respect of a meeting, a place and a time where and when the full text of proposed resolution(s) may be
reviewed.
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|
(j) |
Notwithstanding anything to the contrary contained herein, the Company may give notice to any shareholder by posting a notice on the Company's website, filing an appropriate periodic report with the SEC, by publishing on one
or more international wire services or in one or more newspapers or by publicizing in any other manner reasonably determined by the Company and the date of such posting, filing or other publication shall be deemed the date on
which such notice has been served upon such shareholder. Where notice is given by more than one method, it will be deemed served on the earliest of such dates.
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|
(k) |
The accidental omission to give notice to any shareholder pursuant to any applicable law or these Articles or the non-receipt of any such notice by any shareholder entitled to receive notice shall not invalidate any action,
transaction, resolution or proceedings taken by the Company and/or at or by any General Meeting.
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74.
|
Winding Up
Subject to the rights of the holders of shares with limited or preferred rights as to liquidation, if the Company is wound up on liquidation or dissolution, then, subject to
applicable law, all the assets of the Company available for distribution among the shareholders shall be distributed to them in proportion to the amount paid up or credited as paid up on account of the nominal value of the shares
held by them respectively and in respect of which such distribution is being made, without regard to any premium paid in excess of the nominal value, if any.
|
1. |
To elect seven directors to serve as members of the Board of Directors of the Company
|
FOR
|
AGAINST
|
ABSTAIN
|
||
☐
|
☐
|
☐
|
||||
Paul Sekhri
|
☐
|
☐
|
☐
|
|||
Jean-Pierre Bizzari
|
☐
|
☐
|
☐
|
|||
Anat Cohen-Dayag
|
☐
|
☐
|
☐
|
|||
Gilead Halevy
|
☐
|
☐
|
☐
|
|||
Eran Perry
|
☐
|
☐
|
☐
|
|||
Kinneret Livnat Savitzky
|
☐
|
☐
|
☐
|
|||
Sanford (Sandy) Zweifach
|
☐
|
☐
|
☐
|
|||
2. |
To increase the Company’s authorized share capital and to amend and restate the Company’s Memorandum and Articles to reflect the same
|
☐
|
☐
|
☐
|
||
3. |
To approve an amendment to the Company’s Compensation Policy
|
☐
|
☐
|
☐
|
||
Do you have a "personal interest" in Item 3?
Under the Companies Law, in general, a person is deemed to have a personal interest if any member of his or her immediate family, or the immediate family of its spouse, has a
personal interest in the adoption of the proposal; or if a company, other than Compugen, that is affiliated with such person, has a personal interest in the adoption of the proposal.
Please note -
you do not have a personal interest in the adoption of this proposal just because you own our shares.
PLEASE NOTE THAT IT IS
UNLIKELY THAT YOU HAVE A PERSONAL INTEREST IN THIS ITEM 3.
|
YES
|
NO
|
||||
Are you a "controlling shareholder"?
Under the Companies Law, in general, a person will be deemed to be a "controlling shareholder" if that person has the power to direct the activities of the company, otherwise than
by reason of being a director or other office holder of the company.
PLEASE NOTE THAT IT IS
HIGHLY UNLIKELY THAT YOU ARE A CONTROLLING SHAREHOLDER
|
YES
|
NO
|
||||
4. |
To re-appoint Kost Forer Gabbay & Kasierer (a member of Ernst and Young Global), as the independent registered public accounting firm of the Company for the fiscal year ending
December 31, 2019 and until immediately following the next annual general meeting
|
☐
|
☐
|
☐
|