SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
F O R M 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of September 2009
INTERNET GOLD-GOLDEN LINES LTD.
(Name of Registrant)
1 Alexander Yanai Street Petach-Tikva, Israel
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the
Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate by check mark if the registrant is submitting the
Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
Indicate by check mark whether by furnishing the information
contained in this Form, the registrant is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to
the registrant in connection with Rule 12g3-2(b): 82-_________
Internet Gold-Golden Lines Ltd.
6-K Items
1. Letter to Shareholders and Notice of and Proxy Statement for Internet
Gold-Golden Lines Ltd. 2009 Annual General Meeting of Shareholders to
be held on October 13, 2009.
2. Internet Gold-Golden Lines Ltd. Proxy Card.
ITEM 1
INTERNET GOLD - GOLDEN LINES LTD.
1 Alexander Yanai Street
Petach Tikva 49277, Israel
--------------------------
NOTICE OF 2009 ANNUAL GENERAL MEETING OF SHAREHOLDERS
Dear Internet Gold-Golden Lines Ltd. Shareholders:
We are pleased to invite you to the 2009 Annual General Meeting of
Shareholders to be held on Tuesday, October 13, 2009 at 3:00 p.m. (Israel time),
at the offices of Eurocom Communications Ltd. at 2 Dov Friedman Street, Ramat
Gan 52503, Israel, for the following purposes:
(1) To reelect one Class A director for a term expiring in 2012;
(2) To approve an amendment to Articles 52 - 62 of our Articles of
Association regarding the distribution of dividends in order to
conform our Articles of Association to the provisions of the Israeli
Companies Law with respect to the distribution of dividends;
(3) To ratify and approve the reappointment of Somekh Chaikin, registered
public accountants, a member firm of KPMG International, as our
independent registered public accountants for the year ending December
31, 2009 and to authorize our Board of Directors to delegate to our
Audit Committee the authority to determine their remuneration in
accordance with the volume and nature of their services; and
(4) To review and discuss our auditors' report and consolidated financial
statements for the year ended December 31, 2008.
The Board of Directors recommends that you vote in favor of all of the
proposals, which are described in the attached Proxy Statement.
Shareholders of record at the close of business on September 8, 2009
are entitled to notice of and to vote at the meeting. You can vote either by
mailing in your proxy or in person by attending the meeting. If voting by mail,
the proxy must be received by our transfer agent or at our registered office in
Israel at least twenty-four (24) hours prior to the appointed time of the
meeting to be validly included in the tally of ordinary shares voted at the
meeting. If you attend the meeting, you may vote in person and your proxy will
not be used. Detailed proxy voting instructions are provided both in the Proxy
Statement and on the enclosed proxy card.
By Order of the Board of Directors,
Shaul Elovitch
Chairman of the Board of Directors
September 8, 2009
INTERNET GOLD - GOLDEN LINES LTD.
1 Alexander Yanai Street
Petach Tikva 49277, Israel
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PROXY STATEMENT
--------------------------
2009 ANNUAL GENERAL MEETING OF SHAREHOLDERS
This proxy statement is being furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of Internet Gold -
Golden Lines Ltd. to be voted at the 2009 Annual General Meeting of
Shareholders, or the Meeting, and any adjournment thereof, pursuant to the
accompanying Notice of 2009 Annual General Meeting of Shareholders. The Meeting
will be held on Tuesday, October 13, 2009, 3:00 p.m. (Israel time), at the
offices of Eurocom Communications Ltd. at 2 Dov Friedman Street, Ramat Gan
52503, Israel.
This Proxy Statement, the attached Notice of 2009 Annual General
Meeting and the enclosed proxy card are being mailed to shareholders on or
before September 11, 2009.
Purpose of the Annual General Meeting
At the Meeting, shareholders will be asked to vote upon the following
matters: (i) reelection of one Class A director for a term expiring in 2012;
(ii) approval of an amendment to Articles 52 - 62 of our Articles of Association
regarding the distribution of dividends in order to conform our Articles of
Association to the provisions of the Israeli Companies Law with respect to the
distribution of dividends; and (iii) ratification and approval of the
reappointment of Somekh Chaikin, registered public accounting firm, a member of
KPMG International, as our independent registered public accountants for the
year ending December 31, 2009, and authorization for our Board of Directors to
delegate to the Audit Committee the authority to fix the compensation of such
independent registered public accountants in accordance with the volume and
nature of their services. In addition, our auditor's report and consolidated
financial statements for the year ended December 31, 2008 will be reviewed and
discussed at the Meeting.
Recommendation of the Board of Directors
Our Board of Directors recommends a vote FOR the election of the
nominee for director listed in this Proxy Statement and FOR the other proposals
set forth in this Proxy Statement.
Proxy Procedure
Only holders of record of our ordinary shares, par value of NIS 0.01
per share, as of the close of business on September 8, 2009, are entitled to
notice of, and to vote in person or by proxy at, the Meeting. As of September 8,
2009, the record date for determination of shareholders entitled to vote at the
Meeting, there were 18,040,547 outstanding ordinary shares.
o Voting in Person. If your shares are registered directly in your name
with our transfer agent (i.e. you are a "registered shareholder"), you
may attend and vote in person at the Meeting. If you are a beneficial
owner of shares registered in the name of your broker, bank, trustee
or nominee (in "street name"), you are also invited to attend the
meeting; however, to vote in person at the Meeting as a beneficial
owner, you must first obtain a "legal proxy" from your broker, bank,
trustee or nominee authorizing you to do so.
o Voting by Mail. You may submit your proxy by mail by completing,
signing and mailing the enclosed proxy card in the enclosed,
postage-paid envelope, or, for shares held in street name, by
following the voting instructions provided by your broker, bank
trustee or nominee. If directions are not given or directions are not
in accordance with the options listed on a proxy card, such shares
will be voted FOR the nominee for Class A director and each proposal
for which the Board of Directors recommends a vote FOR.
Change or Revocation of Proxy
If you are a registered shareholder, you may change your vote at any
time prior to the exercise of authority granted in the proxy by delivering a
written notice of revocation to our Corporate Secretary, by granting a new proxy
bearing a later date using, or by attending the Meeting and voting in person.
Attendance at the Meeting will not cause your previously granted proxy to be
revoked unless you specifically so request.
If your shares are held in street name, you may change your vote by
submitting new voting instructions to your broker, bank, trustee or nominee or,
if you have obtained a legal proxy from your broker, bank, trustee or nominee
giving you the right to vote your shares, by attending the Meeting and voting in
person.
Quorum
The presence, in person or by proxy, of two shareholders holding or
representing, in the aggregate, at least one third of our company's voting
rights will constitute a quorum at the Meeting. No business will be considered
or determined at the Meeting unless the requisite quorum is present within half
an hour from the time designated for the Meeting. If within half an hour from
the time designated for the Meeting a quorum is not present, the Meeting will
stand adjourned to the same day in the following week, at the same time and
place. At the adjourned Meeting, any two shareholders present in person or by
proxy will constitute a quorum. This notice shall serve as notice of such
reconvened meeting if no quorum is present at the original date and time and no
further notice of the reconvened meeting will be given to shareholders.
Abstentions and broker non-votes will be counted towards the quorum.
Broker non-votes occur when brokers that hold their customers' shares in street
name sign and submit proxies for such shares and vote such shares on some
matters but not on others. This occurs when brokers have not received any
instructions from their customers, in which case the brokers, as the holders of
record, are permitted to vote on "routine" matters, which include the election
of directors and the ratification of the appointment of an independent
registered public accounting firm, but not on non-routine matters.
Unsigned or unreturned proxies, including those not returned by banks,
brokers, or other record holders, will not be counted for quorum or voting
purposes.
Majority Vote Standard
Each ordinary share entitles the holder to one vote. An affirmative
vote of the holders of a majority of the ordinary shares represented at the
Meeting, in person or by proxy, entitled to vote and voting thereon, is required
to approve each of the proposals.
In tabulating the voting result for any particular proposal, shares
that constitute broker non-votes and abstentions are not considered votes cast
on that proposal. Unsigned or unreturned proxies, including those not returned
by banks, brokers, or other record holders, will not be counted for voting
purposes.
We have received indication from our principal shareholder, Eurocom
Communications Ltd., or Eurocom Communications, which beneficially holds
approximately 70.30% of our issued and outstanding ordinary shares, that it
presently intends to vote for the nominee for director and in favor of the other
matters to be acted upon at the Meeting.
Cost of Soliciting Votes for the Annual Meeting
We will bear the cost of soliciting proxies from our shareholders.
Proxies will be solicited by mail and may also be solicited in person, by
telephone or electronic communication, by our directors, officers and employees.
We will reimburse brokerage houses and other custodians, nominees and
fiduciaries for their expenses in accordance with the regulations of the
Securities and Exchange Commission concerning the sending of proxies and proxy
material to the beneficial owners of our stock.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of September 8,
2009 (unless otherwise indicated below) regarding the beneficial ownership by
(i) all shareholders known to us to own beneficially more than 5% of our
outstanding ordinary shares, (ii) each director and nominee for director and
(iii) all directors and executive officers as a group:
2
Number of Ordinary Shares Percentage of
Name Beneficially Owned (1) Ownership (2)
--------------------------------------------- ------------------------- -------------
Shaul Elovitch (3)........................... 12,683,135 70.30%
Clal Insurance Enterprises Holdings Ltd. (4). 1,486,061 8.24%
Eli Holtzman................................. 172,118 *
Yossef Elovitch.............................. -- --
Ronit Gotliv................................. -- --
Orly Guy..................................... -- --
Aliza Schloss................................ -- --
Anat Winner.................................. -- --
All directors and executive officers as a
group (10 persons)........................... 12,855,253 70.26%
-----------------
* Less than 1 percent
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Ordinary shares relating to options and
warrants currently exercisable or exercisable within 60 days of the date of this
table are deemed outstanding for computing the percentage of the person holding
such securities, but are not deemed outstanding for computing the percentage of
any other person. Except as indicated by footnote, and subject to community
property laws where applicable, the persons named in the table above have sole
voting and investment power with respect to all shares shown as beneficially
owned by them.
(2) The percentages shown are based on 18,040,547 ordinary shares outstanding as
of September 8, 2009 (not including 5,477,859 ordinary shares held as treasury
stock).
(3) Eurocom Communications, our controlling shareholder, holds 12,683,135, or
70.30%, of our ordinary shares as of September 8, 2009. Mr. Shaul Elovitch, our
chairman and the chairman of the board of directors of Eurocom Holdings Ltd., or
Eurocom Holdings, holds 80% of Eurocom Holdings' shares and 75% of Eurocom
Holdings' management shares, and Mr. Yossef Elovitch, his brother and our
director, holds 20% of Eurocom Holdings' shares and 25% of Eurocom Holdings'
management shares. Eurocom Communications is 50.33% owned by Eurocom Holdings
and 49.0% of its shares are held by four holding companies, which are 80% owned
by Mr. Shaul Elovitch and 20% owned by Mr. Yossef Elovitch, respectively. The
remaining 0.67% in Eurocom Communications is directly owned by Mr. Shaul
Elovitch. Accordingly, Mr. Shaul Elovitch may be deemed to have the sole voting
and dispositive power over our ordinary shares held by Eurocom Communications.
(4) Based solely upon, and qualified in its entirety with reference to, a
Schedule 13G/A filed with the Securities and Exchange Commission on February 13,
2009.
I. REELECTION OF CLASS A DIRECTOR
(Item 1 on the Proxy Card)
The term of office of our Class A director, Mr. Shaul Elovitch, expires
as of the Meeting, and he will be standing for reelection to serve as a Class A
director for an additional three-year term until our annual general meeting of
shareholders to be held in 2012.
Pursuant to our articles of association, our Board of Directors may
consist of no less than six and no more than nine members, and is divided into
three classes (other than outside directors), Class A, Class B and Class C.
Generally, at each annual meeting of shareholders one class of directors is
elected for a term of three years. At present we have one Class A director, two
Class B directors and two Class C directors. In addition, as a company
incorporated under the laws of the State of Israel whose shares have been
offered to the public, two outside directors, within the meaning of the Israeli
Companies Law, serve as members of our Board of Directors. All the members of
our Board of Directors, except the outside directors, may be reelected upon
completion of their term of office.
We are a "controlled company" within the meaning of the NASDAQ
Marketplace Rules, since Eurocom Communications holds more than 50% of our
voting power. As such, we are exempt from the NASDAQ Marketplace Rules
requirement regarding the process for the nomination of directors; instead, we
follow Israeli law and practice in accordance with which our directors are
proposed by our Board of Directors and elected by our shareholders.
Accordingly, our Board of Directors proposes the reelection of Mr.
Shaul Elovitch to serve as a Class A director, to hold office for an additional
three-year term until our annual general meeting of shareholders to be held in
2012.
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Should the director nominee be unavailable for election, the proxies
will be voted for a substitute nominee designated by the Board of Directors. The
director nominee is not expected to be unavailable.
Set forth below is information about the nominee, including age,
position(s) held with our company, principal occupation, business history and
other directorships held.
Nominee for Election as Class A Director for Term Expiring in 2012
Shaul Elovitch (61) has served as the chairman of our board of
directors since our inception in 1992. Mr. Elovitch is the controlling
shareholder of Eurocom Communications and its affiliated companies, one of
Israel's largest private communications groups. Mr. Elovitch has served as the
chairman of the board of directors and chief executive officer of Eurocom
Holdings and Eurocom Communications, our parent company, since 1985. Mr.
Elovitch also serves as a member of the board of directors of Space
Communications Ltd., Satcom Systems Ltd. and E. G.R.E. Ltd. Mr. Elovitch has
served as chairman of the board of directors of our subsidiaries Smile.Media
Ltd., or Smile.Media, and 012 Smile.Communications Ltd., or 012
Smile.Communications, since 2000. Mr. Elovitch is the brother of Mr. Yossef
Elovitch.
Under the Israeli Companies Law, the affirmative vote of the holders of
a majority of the ordinary shares represented at the Meeting, in person or by
proxy, entitled to vote and voting thereon, is required to elect as director the
nominee named above.
The Board of Directors recommends a vote FOR the election of the
nominee for Class A director.
Directors Continuing in Office
Eli Holtzman (60) co-founded our company and has been our chief
executive officer since 1992 and a director since July 1999. Mr. Holtzman serves
as chief executive officer of Smile.Media and serves as the vice chairman of the
board of directors of 012 Smile.Communications. Mr. Holtzman holds a B.Sc.
degree in Chemistry and Pharmaceuticals from Illinois University.
Yossef Elovitch (57) has served as a director since 1993. Mr.
Elovitch has served as a director of Eurocom Communications since 1985. Mr.
Elovitch serves as a director of various other companies in the Eurocom group.
Mr. Elovitch is the brother of Mr. Shaul Elovitch.
Ronit Gotliv (55) has served as an outside director since July 2005 and
is a member of our audit committee. Ms. Gotliv serves as a managing partner of
R. Gotliv and Co., a Tel Aviv law firm specializing in commercial law, corporate
law and real estate law. From 1984 to 1999, Ms. Gotliv was employed as an
attorney at B.A. Gotliv - Law Offices. Ms. Gotliv holds an LL.B. degree from Tel
Aviv University and is a member of the Israel Bar Association.
Orly Guy (48) has served as an outside director since July 2005 and is
a member of our audit committee. Ms. Guy has served as a managing partner of
Guy Bachar and Co, a Tel Aviv law firm specializing in civil-commercial law
including litigation, capital market law and real estate law, since 1994. Since
2000, Ms. Guy has served as a director of a pharmaceutics company, Intec Pharma
Ltd. Ms. Guy holds an LL.B. degree from Tel Aviv University and is a member of
the Israel Bar Association.
Aliza Schloss (55) has served as a director since July 2005. Ms.
Schloss has served as a director of 012 Smile.Communications since January 2008.
Ms. Schloss has served as an Executive Vice President of the Eurocom group since
March 2009 and as director and/or officer of various other companies within the
Eurocom group since 2005. Ms. Schloss also serves as a member of the board of
directors of Satcom Systems Ltd. From 2002 to 2005, Ms. Schloss served as an
independent director, chairman of the audit committee and member of various
committees of the Israel Electric Company Ltd. From October 2000 to October
2003, Ms. Schloss served as a director, chairmen of the audit committee and
member of various committees of Bezeq The Israel Telecommunication Corp., Ltd.
Ms. Schloss holds a Ph.D. degree in Political Science and Public Administration
from the Hebrew University of Jerusalem. Ms. Schloss also holds an M.A. degree
in Political Science and an M.P.A. degree in Public Administration, both from
the Hebrew University of Jerusalem, and a B.Sc. degree in Biology from the
Ben-Gurion University of the Negev.
Anat Winner (49) has served as a director since August 2001 and is a
member of our audit committee. Ms. Winner has served as a director of 012
Smile.Communications since October 2007. Ms. Winner has been self employed as a
business advisor since July 2003 and serves as a director of Magal Security
Systems Ltd., an Israeli public company. From October 2001 to July 2003, Ms.
Winner served as chief executive officer and chief financial
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officer of Israel News Ltd. From 1999 to October 2001, Ms. Winner served as
chief financial officer of DBS Satellite Services (1998) Ltd. (YES), an Israeli
company that is engaged in setting up and operating direct broadcasting
satellite television systems. Ms. Winner holds a B.A. degree in Accounting and
Economics from Haifa University and has been a certified public accountant
(Israel) since 1986.
BOARD OF DIRECTORS AND AUDIT COMMITTEE
Board of Directors
According to the Israeli Companies Law, the management of our business
is vested in our board of directors.
Our articles of association provide for a board of directors consisting
of no less than six and no more than nine members or such other number as may be
determined from time to time at a general meeting of shareholders. Our board of
directors is currently composed of seven directors.
Pursuant to our articles of association, our board of directors is
divided into three classes (other than outside directors). Generally, at each
annual meeting of shareholders one class of directors is elected for a term of
three years by a vote of the holders of a majority of the voting power
represented and voting at such meeting. All the members of our board of
directors (except the outside directors as detailed below) may be reelected upon
completion of their term of office. Our board of directors may appoint
additional directors to temporarily fill any vacancies in the board of
directors, provided that the total number of directors will not exceed nine and
that if the total number of directors decreases below six, the board of
directors may only act in emergency situations, or to fill the minimum number of
vacancies, or to call a general meeting of shareholders, so that following such
meeting there will be at least six directors in office.
The board of directors of an Israeli public company is required to
determine that at least one or more directors will have "accounting and
financial expertise," as defined by regulations promulgated under the Israeli
Companies Law. Our board of directors determined, accordingly, that at least two
director must have "accounting and financial expertise." Our Board of Directors
has further determined that Mr. Shaul Elovitch, Ms. Aliza Schloss, Ms. Orly Guy
and Ms. Anat Winner have the requisite "accounting and financial expertise."
As a controlled company within the meaning of NASDAQ Marketplace Rules,
we are exempt from the NASDAQ requirement regarding the nomination process of
directors, and instead, follow Israeli law and practice, in accordance with
which directors may be recommended by our board of directors for election by our
shareholders.
Outside and Independent Directors
Outside Directors. The Israeli Companies Law requires public companies
incorporated under the laws of the State of Israel to appoint at least two
outside directors. The outside directors must meet certain statutory
requirements of independence. If, at the time outside directors are to be
appointed, all current members of the board of directors are of the same gender,
then at least one outside director must be of the other gender.
At least one of the outside directors must have "accounting and
financial expertise" and any other outside director must have "accounting and
financial expertise" or "professional qualification," as such terms are defined
by regulations promulgated under the Israeli Companies Law. However, Israeli
companies listed on certain stock exchanges outside Israel, including The NASDAQ
Global Market, such as our company, are not required to appoint an outside
director with "accounting and financial expertise" if a director with accounting
and financial expertise who qualifies as an independent director for purposes of
audit committee membership under the laws of the foreign country in which the
stock exchange is located serves on its board of directors. All of the outside
directors of such a company must have "professional qualification."
The outside directors are elected by a majority vote at a shareholders
meeting. In general, outside directors serve for a three-year term and may be
reelected to one additional three-year term. However, Israeli companies that are
listed on certain stock exchanges outside Israel, including The NASDAQ Global
Market, such as our company, may appoint an outside director for additional
terms of not more than three years each subject to certain conditions.
Each committee of the board of directors that is authorized to exercise
powers vested in the board of directors must include at least one outside
director and the audit committee must include all the outside directors.
5
Ms. Orly Guy and Ms. Ronit Gotliv are each serving as an outside
director pursuant to the provisions of the Israeli Companies Law for second
three-year terms ending in July 2011.
Independent Directors. NASDAQ Marketplace Rules require us to establish
an audit committee comprised of at least three members and only of independent
directors each of whom satisfies the respective "independence" requirements of
the Securities and Exchange Commission and NASDAQ.
As a controlled company within the meaning of The NASDAQ Marketplace
Rules, we are exempt from the NASDAQ Marketplace Rule that requires that a
majority of our board of directors must qualify as independent directors within
the meaning of the NASDAQ Marketplace Rules. If the "controlled company"
exemption would cease to be available to us under NASDAQ Marketplace Rules, we
may instead elect to follow Israeli law and would not be required to elect any
additional independent directors.
Our board of directors has determined that Ms. Guy and Ms. Gotliv (both
outside directors under Israeli law) and Ms. Anat Winner each qualifies as an
independent director under the requirements of the Securities and Exchange
Commission and NASDAQ Marketplace Rules.
Audit Committee
Under the Israeli Companies Law, the board of directors of a public
company must establish an audit committee. The audit committee must consist of
at least three directors and must include all of the outside directors. The
audit committee may not include the chairman of the board of directors, any
director employed by the company or providing services to the company on an
ongoing basis, or a controlling shareholder or any of the controlling
shareholder's relatives.
In addition, the NASDAQ Marketplace Rules require us to establish an
audit committee comprised of at least three members, all of whom must be
independent directors, each of whom is financially literate and satisfies the
respective "independence" requirements of the Securities and Exchange Commission
and NASDAQ and one of whom has accounting or related financial management
expertise at senior levels within a company.
Our audit committee assists our Board of Directors in overseeing the
accounting and financial reporting processes of our company and audits of our
financial statements, including the integrity of our financial statements,
compliance with legal and regulatory requirements, our independent registered
public accountants' qualifications and independence, the performance of our
internal audit function and independent registered public accountants,
identifying any faults in the business practices of our company and to make
recommendations to the Board of Directors for remedying such faults, approving
related-party transactions as required by Israeli law, and such other duties as
may be directed by our Board of Directors.
Our audit committee consists of three members of our Board of Directors
who satisfy the respective "independence" requirements of the Securities and
Exchange Commission, NASDAQ and Israeli law for audit committee members. Our
audit committee is currently composed of Ms. Guy, Ms. Gotliv and Ms. Winner, who
serves as the chairperson of the audit committee. Our Board of Directors has
determined that Ms. Winner qualifies as an audit committee financial expert. The
audit committee meets at least once each quarter. Our audit committee charter is
available on our website at www.igld.com.
II. AMENDMENT OF ARTICLES OF ASSOCIATION
(Item 2 on the Proxy Card)
On February 1, 2000, the Israeli Companies Law, 5759-1999, or the
Israeli Companies Law, became effective. The Israeli Companies Law supersedes
most of the provisions of the Israeli Companies Ordinance [New Version],
5743-1983, or the Israeli Companies Ordinance. Our current Articles of
Association were adopted by our shareholders in 1999 in accordance with the
provisions of the Israeli Companies Ordinance that was then in effect and
generally conform to the provisions of the Israeli Companies Ordinance.
In order to conform our Articles of Association to the provisions of
the Israeli Companies Law with respect to the distribution of dividends, our
Board of Directors has approved, and recommends that the shareholders adopt, the
following proposed amendments to our Articles of Association, which, among other
things, authorize our Board of Directors to declare dividends, including
dividends in kind, without shareholder approval or ratification. Our current
Articles of Association distinguish between interim dividends, which may be
declared by the Board of Directors, and final dividends, which may be declared
by a general meeting of shareholders pursuant to the recommendation of the Board
of Directors. Following the amendment, our Articles of Association would provide
6
our Board of Directors the authority to declare all dividends. The proposed
amendments to our Articles of Association also include provisions relating to
the procedures and mechanism for dividend distributions in a manner that will
conform with the Israeli Companies Law.
In light of the changes in Israel's business and legal environment
since 1999, including the entering into effect of the Israeli Companies Law, we
believe that our current Articles of Association are outdated and do not provide
our company or shareholders with the flexibility required to conduct our
operations in the most efficient and productive manner.
Under the amended Articles of Association, our Board of Directors would
have the authority to declare dividends, whether in cash or shares, without
further shareholder action, as described above. The Israeli Companies Law
applies a solvency test for the ability of a company to pay dividends or make
other distributions on its shares, including through share repurchases. After
giving effect to any proposed dividend or distribution, a company's board of
directors must be able to conclude that the company will be able to pay its
debts as they come due and that the value of the company's remaining assets is
greater than its liabilities. It is our policy to retain earnings to finance the
development of our business. Our declaration or payment of any future dividends
will be based on conditions then existing, including our earnings, financial
condition and capital requirements, as well as other conditions we deem
relevant.
It is therefore proposed that at the Meeting the following resolution
be adopted:
"RESOLVED, that Articles 52 - 62 of the Articles of Association
of Internet Gold - Golden Lines Ltd. are hereby amended and
replaced in their entirety with the following Articles 52 - 62:
52. Payment of Dividends
Distribution of dividends shall be within the
authority of the Board of Directors. Subject to the
Companies Law, 5759-1999, or the Companies Law, the
Board of Directors may from time to time declare,
and cause the Company to pay, such dividend as may
appear to the Board of Directors to be appropriate.
Subject to the Companies Law, the Board of
Directors shall determine the time for payment of
such dividends.
53. The Company's obligation to pay dividends or any
other amount in respect of shares, may be set-off
by the Company against any indebtedness, however
arising, liquidated or non-liquidated, of the
person or entity entitled to receive the dividend.
The provisions contained in this Article shall not
prejudice any other right or remedy vested with the
Company pursuant to these Articles of Association
or otherwise.
54. Amount Payable by Way of Dividends
Subject to the rights of the holders of shares with
special rights as to dividends, any dividend paid
by the Company shall be allocated among the
shareholders entitled thereto in proportion to
their respective holdings of the shares in respect
of which such dividend is being paid.
55. Upon the declaration of the Board of Directors, a
dividend may be paid, wholly or partly, by the
distribution of cash or specific assets of the
Company or by distribution of securities of the
Company or of any other companies, or in any one or
more of such ways.
56. Retention of Dividends
The Board of Directors may retain any dividend or
other moneys payable or property distributable with
respect to a share in respect of which any person
or entity is entitled to become a shareholder or
which any person or entity is entitled to transfer,
until such person or entity shall become a
shareholder with respect to such share or until
such transfer has been completed.
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57. Unclaimed Dividends
All unclaimed dividends or other moneys payable
with respect to a share may be invested or
otherwise made use of by and for the benefit of the
Company until claimed. The Company shall not be
deemed a trustee with respect to any unclaimed
dividend or such other moneys deposited by it into
a separate account. No interest shall accrue on
unclaimed dividends.
58. Any dividend unclaimed after a period of seven (7)
years from the date of declaration of such
dividend, and any such other moneys unclaimed after
a like period 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 discretion, cause the Company to pay any
such dividend or such other moneys, or any part
thereof, to a person or entity who would have been
entitled thereto had the same not reverted to the
Company.
59. The shareholders entitled to a dividend shall be
those shareholders who are shareholders at the time
of the adoption of the resolution to distribute
such dividend, or at such later date as may be
provided in such resolution.
60. Where a share with respect to which a dividend is
to be distributed is jointly owned, any dividend
distributed by the Company with respect to such
jointly-owned share will be paid to that joint
owner whose name appears first in the Register of
Members.
61. The Board of Directors may from time to time
determine the method of payment of dividend or
distribution of bonus shares or any other benefits,
and the arrangements with respect thereto, to
holders of registered shares.
62. Without prejudice to the above, the Board of
Directors may effect payment of any dividend or
moneys with respect to shares, by delivery of check
by mail to the shareholder's address as entered in
the Register of Members."
The adoption of an amendment to our Articles of Association requires
the affirmative vote of the holders of a majority of the ordinary shares
represented at the Meeting, in person or by proxy, entitled to vote and voting
thereon.
The Board of Directors recommends a vote FOR the foregoing resolution.
III. RATIFICATION AND APPROVAL OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTANTS
(Item 3 on the Proxy Card)
We first appointed Somekh Chaikin as our independent auditors in 1999
and have reappointed the firm as our independent auditors since such time.
Somekh Chaikin has no relationship with us or any of our affiliates except as
auditors.
At the Meeting, shareholders will be asked to ratify and approve the
re-appointment of Somekh Chaikin registered public accounting firm, a member
firm of KPMG International, as our independent registered public accountants for
the fiscal year ending December 31, 2009, pursuant to the recommendation of our
Audit Committee and Board of Directors. As a result of Somekh Chaikin's
familiarity with our operations and its reputation in the auditing field, our
Audit Committee and Board of Directors believe that Somekh Chaikin has the
necessary personnel, professional qualifications and independence to act as our
independent registered public accountants.
At the Meeting, shareholders will also be asked to authorize our Board
of Directors to delegate to our Audit Committee the authority to determine the
remuneration of our independent registered public accountants according to the
volume and nature of their services. With respect to fiscal year 2008, we paid
Somekh Chaikin approximately $364,500 for audit services.
8
It is therefore proposed that at the Meeting the following resolution
be adopted:
"RESOLVED, that the appointment of Somekh Chaikin, registered public
accounting firm, a member firm of KPMG International, as the
independent registered public accountants of Internet Gold - Golden
Lines Ltd. to conduct the annual audit of its financial statements for
the year ending December 31, 2009, be and hereby is ratified and
approved, and it is further resolved, that the Board of Directors be,
and it hereby is, authorized to delegate to the Audit Committee the
authority to determine the remuneration of such independent registered
public accountants in accordance with the volume and nature of their
services."
The affirmative vote of the holders of a majority of the ordinary
shares represented at the Meeting, in person or by proxy, entitled to vote and
voting on the matter, is required to approve the foregoing resolution.
The Board of Directors recommends a vote FOR the foregoing resolution.
IV. REVIEW AND DISCUSSION OF AUDITOR'S REPORT AND CONSOLIDATED FINANCIAL
STATEMENTS
At the Meeting, our auditors' report and audited consolidated financial
statements for the year ended December 31, 2008 will be presented. We will hold
a discussion with respect to the financial statements at the Meeting, as
required by Israeli law. This Item will not involve a vote of the shareholders.
Our annual report on Form 20-F for the year ended December 31, 2008,
including the auditor's report and consolidated financial statements for the
year ended December 31, 2008, which was filed with the Securities and Exchange
Commission on June 24, 2009, is available on our website at www.igld.com or
through the EDGAR website of the Securities and Exchange Commission at
www.sec.gov. Shareholders may receive a hard copy of the annual report on Form
20-F containing the consolidated financial statements free of charge upon
request. None of the auditor's report, consolidated financial statements, the
Form 20-F or the contents of our website form part of the proxy solicitation
material.
By Order of the Board of Directors,
Shaul Elovitch
Chairman of the Board of Directors
Dated: September 8, 2009
9
ITEM 2
INTERNET GOLD-GOLDEN LINES LTD.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) Eli Holtzman and Shaul Elovitch, or
either of them, attorneys or attorney of the undersigned, for and in the name(s)
of the undersigned, with power of substitution and revocation in each to vote
any and all ordinary shares, par value NIS 0.01 per share, of Internet
Gold-Golden Lines Ltd. (the "Company"), which the undersigned would be entitled
to vote as fully as the undersigned could if personally present at the Annual
General Meeting of Shareholders of the Company to be held on October 13, 2009 at
3:00 p.m. (Israel time) at the offices of Eurocom Communications Ltd., 2 Dov
Friedman Street, Ramat Gan 52503, Israel and at any adjournment or adjournments
thereof, and hereby revoking any prior proxies to vote said shares, upon the
following items of business more fully described in the notice of and proxy
statement for such Annual General Meeting (receipt of which is hereby
acknowledged):
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE. IN THE ABSENCE OF SUCH
SPECIFICATION, THE SHARES REPRESENTED BY THIS PROXY CARD WILL BE VOTED FOR THE
ELECTION OF THE NOMINEE FOR CLASS A DIRECTOR IN ITEM 1 AND FOR ITEMS 2 AND 3. ON
ANY OTHER BUSINESS THAT MAY PROPERLY COME BEFORE THE MEETING, THIS PROXY WILL BE
VOTED IN ACCORDANCE WITH THE JUDGMENT OF THE PERSONS NAMED ABOVE AS PROXIES.
(Continued and to be signed on the reverse side)
ANNUAL GENERAL MEETING OF SHAREHOLDERS OF
INTERNET GOLD-GOLDEN LINES LTD.
October 13, 2009
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
THE CLASS A DIRECTOR AND "FOR" PROPOSALS 2 AND 3.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
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1. To reelect one Class A director for a term expiring in 2012.
NOMINEE:
FOR AGAINST ABSTAIN
SHAUL ELOVITCH [ ] [ ] [ ]
2. To approve an amendment to Articles 52 - 62 of the Company's Articles
of Association regarding the distribution of dividends in order to
conform the Company's Articles of Association to the provisions of the
Israeli Companies Law with respect to the distribution of dividends.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To ratify and approve the reappointment of Somekh Chaikin, registered
public accountants, a member firm of KPMG International, as the
Company's independent registered public accountants for the year ending
December 31, 2008 and to authorize the Company's Board of Directors to
delegate to the Audit Committee the authority to determine their
remuneration in accordance with the volume and nature of their
services.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that changes
to the registered name(s) on the account may not be submitted via this method. [
]
Signature of Shareholder __________ Date _____
Signature of Shareholder __________ Date _____
Note: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INTERNET GOLD-GOLDEN LINES LTD.
(Registrant)
By /s/Eli Holtzman
---------------
Eli Holtzman
Chief Executive Officer
Date: September 10, 2009