Legal Proceedings
From time to time, we are a party to legal proceedings and claims in the ordinary course of business. We are not currently a party to any significant legal proceedings.
Dividend Policies
We anticipate that, for the foreseeable future, we will retain any earnings to support operations and to finance the growth and development of our business. Therefore, we do not expect to pay cash dividends for at least the next several years.
We obtained the status of “approved enterprise” under the Law for the Encouragement of Capital Investments, 1959, under which we may take advantage of certain tax exemptions. We may further obtain such status in the future. If we distribute a cash dividend from income which is tax exempt, we would have to pay corporate tax at a rate of up to 25% on the amount equal to the amount distributed and on the amount of corporate tax which would have been due in the absence of the tax exemption, in addition to withholding tax on such dividends paid. For further description of the conditions limiting our ability to declare and pay dividends see “Item 10E –Israeli Taxation” in this annual report on Form 20-F.
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The distribution of dividends may also be limited by the Companies Law, which permits the distribution of dividends only out of retained earnings or earnings derived over the two most recent fiscal years, whichever is higher, provided that there is no reasonable concern that payment of a dividend will prevent a company from satisfying its existing and foreseeable obligations as they become due. Our Amended and Restated Articles of Association provide that dividends will be paid at the discretion of, and upon resolution by, our board of directors.
Export Sales
Substantially all of our products are sold to customers located outside Israel.
8.B
Significant Changes
Not applicable.
9.A
Offer and Listing Details
The information presented in the table below presents, for the periods indicated, the reported high and low market prices on The NASDAQ Global Market of our ordinary shares. The shares began trading on NASDAQ on April 11, 2000 at a price of $18 per share. Our ordinary shares were registered for trading on the Tel Aviv Stock Exchange in 2002, and the table below presents, for the periods indicated, the reported high and low market prices on the Tel Aviv Stock Exchange.
NASDAQ Global Market
Price per share (US$)
High
Low
Yearly highs and lows
2007
3.10
2.10
2008
2.55
0.41
2009
6.55
0.68
2010
8.48
3.63
2011
11.79
5.11
Quarterly highs and lows
First quarter
6.72
4.23
Second quarter
6.19
Third quarter
6.89
3.86
Fourth quarter
5.47
First quarter
11.44
8.20
9.07
7.99
5.30
2012
First quarter (until February 29, 2012)
9.19
7.15
Monthly highs and lows
September 2011
7.07
October 2011
November 2011
7.2
5.48
December 2011
7.52
6.28
January 2012
8.91
February 2012
7.21
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Tel Aviv Stock Exchange
Price per share (NIS)
13.75
8.50
9.79
1.85
24.24
1.53
30.50
14.50
40.99
20.00
25.94
15.80
Second quarter
22.38
Third quarter
25.20
15.40
Fourth quarter
29.20
40.27
31.20
37.90
21.07
28.65
First quarter (until February 29, 2012)
34.00
27.72
Monthly highs and lows
24.52
28.58
26.44
22.09
23.57
27.87
9.B
Plan of Distribution
9.C
Markets
Our ordinary shares are quoted on The NASDAQ Global Market and the Tel Aviv Stock Exchange under the symbol “NVMI.”
9.D
Selling Shareholders
9.E
Dilution
9.F
Expenses on the Issue
10.A
Share Capital
10.B
Memorandum and Articles of Association
Set forth below is a summary of certain provisions of the Company’s Amended and Restated Articles of Association, as adopted by the Company’s shareholders on September 25, 2008, and Israeli law affecting shareholders of the Company. This summary does not purport to be complete and is qualified in its entirety by reference to our memorandum and Amended and Restated Articles of Association and such law. On September 25, 2008, our shareholders adopted the Amended and Restated Articles of Association of the Company (for the purposes of this Item, the “Amended Articles”).
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Registration. The Company was incepted and registered with the Israeli Registrar of Company’s on May 17, 1993, under registration number 51-181-246-3.
Purpose of the Company. The purposes of the Company, as provided by Article 4 of our Amended Articles, are (a) to invent, design, plan, develop, manufacture, market and trade in the field of measuring instruments in electronics, micro-electronics, medicine, chemistry, metallurgy, ceramics and any other field, (b) to initiate, participate, manage, execute, import and export any kind of project within the borders of the State of Israel and/or outside Israel, (c) to register patents, trademarks, trade names intellectual property rights marketing rights and any other right of any kind whatsoever, both in Israel and abroad and (d) to engage in any legal activity, both in Israel and abroad.
Approval of Related Party Transaction; Corporate Borrowings. The Companies Law requires that office holders of a company, including directors and executive officers, promptly disclose to the board of directors any personal interest they may have and all related material information known to them about any existing or proposed transaction with such company. The approval of the board of directors is required for 'non-extraordinary transactions between a company and its office holders, or between a company and other persons in which an office holder has a personal interest, unless such company's articles of association provide otherwise. If a transaction is an “extraordinary transaction” it is subject to the approval of the audit committee prior to its approval by the board of directors. Transactions between a company and an office holder (who is not a director), regarding such office holder's terms of engagement with the company, including with respect to indemnification, insurance and exemptions, are subject the approval of the audit committee and the board of directors. Transactions between a company and its directors, regarding their terms of engagement with such company, including with respect to indemnification, insurance and exemptions, and with respect to their terms of engagement in other positions in the company, are subject to the approval of the audit committee, the board of directors and such company's shareholders.
In addition, an extraordinary transaction between a public company and a controlling shareholder (i.e. a shareholder who has the ability to direct the activities of a company, including a shareholder that owns 25% or more of the voting rights if no other shareholder owns more than 50% of the voting rights, but excluding a shareholder whose power derives solely from its position on the board of directors or any other position with the company), or in which a controlling shareholder has a personal interest, including a private placement in which the controlling shareholder has a personal interest, a transaction between a public company and a controlling shareholder, the controlling shareholders' relative, or entities under its control, directly or indirectly, with respect to services to be provided to the public company, and a transaction concerning the terms of compensation of the controlling shareholder or the controlling shareholder’s relative, who is an office holder or an employee, require the approval of the audit committee, the board of directors and a majority of the shares voted by the shareholders of the company participating and voting on the matter in a shareholders’ meeting. In addition, the shareholder approval must fulfill one of the following requirements: (i) the majority must include at least a majority of the shares of the voting shareholders who have no personal interest in the transaction (in counting the total votes of such shareholders, abstentions shall not be taken into account); or (ii) the total of opposition votes among the shareholders who have no personal interest in the transaction may not exceed 2% of the aggregate voting rights in the company. Any such transaction the term of which is more than three years, must be approved in the same manner every three years, unless the audit committee has determined that longer term is reasonable under the circumstances.
Under our Amended Articles, a transaction between the Company and an office holder and a transaction between the Company and a third person in which an office holder of the Company has a personal interest, which is not an extraordinary transaction (as defined in the Companies Law), will require only the approval of our board of directors or a committee authorized by our board of directors.
According to the Companies Law, if an extraordinary transaction is discussed by the board of directors or the audit committee, directors and office holders that have personal interest in the proposed transaction, may not participate in the discussion or vote. However, if the majority of the members of the audit committee or the board of directors (as applicable) have personal interest in the proposed transaction, then all directors (including those with personal interest) may participate in the discussion and vote, provided that in the event the majority of the members of the board of directors have personal interest in the transaction, said transaction shall also be subject to the approval of the Company's shareholders meeting.