|
|
| 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 the registrant by furnishing the information contained in this Form 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): Not Applicable | ||||||
|
(1)
|
approval
of a related party transaction – sale of property to Bayside Land
Corporation Ltd.; and
|
|
(2)
|
approval
of a related party transaction – (A) amendment of the letter of exemption
and indemnification to office holders and (B) the grant of the letter
of
exemption and indemnification to office holders who are controlling
shareholders.
|
|
Company
Contact
Shiri
Israeli
Investor
Relations Coordinator
investors@cellcom.co.il
Tel:
+972 52 998 9755
|
Investor
Relations Contact
Ehud
Helft / Ed Job
CCGK
Investor Relations
ehud@gkir.com
/
ed.job@ccgir.com
Tel:
(US) 1 866 704 6710 / 1 646 213
1914
|
|
|
(1)
|
approval
of a related party transaction – sale of property;
and
|
|
|
(2)
|
approval
of a related party transaction - amendment of the letter of exemption
and
indemnification to office holders and the grant of the letter of
exemption
and indemnification to office holders who are controlling
shareholders.
|
| By Order of the Board of Directors, | |
|
Liat
Menahemi-Stadler
General
Counsel and Corporate Secretary
|
|
|
Dated: January
8, 2008
|
|
(1)
|
approval
of a related party transaction – sale of property ; and
|
|
|
(2)
|
approval
of a related party transaction - amendment of the letter of exemption
and
indemnification to office holders and the grant of the letter of
exemption
and indemnification to office holders who are controlling
shareholders.
|
|
Shares
Beneficially Owned
|
||||||||
|
Name
of Beneficial Owner
|
Number
|
Percent
|
||||||
|
Discount
Investment Corporation Ltd. (1)
|
59,950,000
|
61.48%
|
||||||
|
MFS
Investment Management
|
4,940,310
|
5.07%
|
||||||
|
Directors
and executive officers as a group (21 persons)(2)
|
60,389,392
|
61.66%
|
||||||
|
(1)
|
Includes
24,375,855 Ordinary Shares held by two wholly-owned subsidiaries
of
Discount Investment Corporation Ltd. (“DIC”) (namely, PEC Israel Economic
Corporation, a Maine corporation, and DIC Communication and Technology
Ltd., an Israeli company) and 5,362,500 Ordinary Shares, representing
approximately 5.5% of our issued and outstanding shares, held by
four
shareholders whose voting rights are vested in DIC. DIC is a
majority-owned subsidiary of IDB Development Corporation Ltd. (“IDB
Development”), which in turn is a majority-owned subsidiary of IDB Holding
Corporation Ltd. (“IDB”). IDB, IDB Development and DIC are
public Israeli companies whose shares are traded on the Tel Aviv
Stock
Exchange.
|
|
·
|
Ganden
Holdings Ltd. (“Ganden”), a private Israeli company controlled by Nochi
Dankner (who is also the Chairman of IDB, IDB Development and DIC
and one
of our directors) and his sister Shelly Bergman, holds, directly
and
through a wholly-owned subsidiary, approximately 50.04% of the outstanding
shares of IDB;
|
|
|
·
|
Shelly
Bergman, through a wholly-owned company, holds approximately 4.23%
of the
outstanding shares of IDB;
|
|
|
·
|
Avraham
Livnat Ltd. (“Livnat”), a private Israeli company controlled by Avraham
Livnat (one of whose sons, Zvi Livnat, is a director and Executive
Vice
President of IDB, Deputy Chairman of IDB Development and a director
of
DIC, and another son, Shay Livnat, is one of our directors and a
director
of IDB Development) holds, directly and through a wholly-owned subsidiary,
approximately 11.69% of the outstanding shares of IDB;
and
|
|
|
·
|
Manor
Holdings BA Ltd. (“Manor”), a private Israeli company controlled by Ruth
Manor (whose husband, Isaac Manor, is one of our directors and he
and
their son Dori Manor are directors of IDB, IDB Development and DIC)
holds,
directly and through a majority-owned subsidiary, approximately 11.68%
of
the outstanding shares of IDB.
|
|
(2)
|
Includes
439,392
shares issuable upon the exercise of stock options that are exercisable
on, or within 60 days following, December 31, 2007. In practice,
a lower
number of shares are issuable upon exercise of such options because
the
2006 share incentive plan, unless otherwise approved by our board
of
directors, provides for a net exercise mechanism that effectively
reduces
the number of shares issuable upon exercise by such number of shares
whose
market value equals the exercise price. Also includes the 59,950,000
shares held, directly or indirectly, by DIC, which may be deemed
to be
beneficially owned by Nochi Dankner by virtue of his control of
IDB. Each of our directors who is affiliated with
IDB
or DIC disclaims beneficial ownership of such
shares.
|
|
1.
|
The
consideration for the plot is NIS 39 million (the "Consideration")
plus
value added tax ("VAT").
|
|
2.
|
Our
rights to the plot are sold "As Is" and include our rights and obligations
under the lease agreement, development agreement and a public
infrastructure performance agreement, between us and a third
party.
|
|
3.
|
The
transaction is subject to the requisite corporate approvals of both
parties, as required under the Israeli Companies Law (the
“Condition Precedent”). In case the Condition Precedent
is not fulfilled within 90 days from the date of the Agreement, the
Agreement will not come into force and sums previously placed in
escrow by
Bayside will be returned to Bayside.
|
|
4.
|
Upon
the payment of the entire Consideration (plus VAT) to us, we will
transfer
possession of the plot to Bayside.
|
|
5.
|
The
transaction is subject to obtaining the consent of ILA to the transfer
of
our rights in the plot. The ILA is not expected to demand a consent
fee
for the transfer of rights in the plot since the lease agreement
is
capitalized. Consent fees are usually demanded by the ILA in relation
to
the transfer of rights in a non-capitilized lease. In case the ILA
does
not give its consent to the transfer of rights, each party will be
entitled to terminate the Agreement, in which case any sums previously
paid or placed in escrow by Bayside will be returned to Bayside.
In case
the ILA demands consent fees and/or any other payment following a
claim
(if made) as to our alleged failure to comply with the terms of the
development agreement and/or the lease agreement, the parties will
contest
such demands. If such demands remain, we will bear their cost.
In case such demands exceed 3% of the Consideration (with the addition
of
the applicable VAT), we will be entitled to terminate the Agreement,
unless the parties or either one of us, decide to pay the difference
between the said 3% and the ILA’s demands.
|
|
6.
|
Immediately
after the Condition Precedent is fulfilled, Bayside will be entitled
to
register a pledge on the rights in the plot, to secure its rights
according to the Agreement.
|
|
7.
|
The
Agreement includes other terms customary in similar
transactions.
|
|
Item
2 –
|
Amendment
of the Letter of Exemption and Indemnification to Office Holders
and the
Grant of the Letter of Exemption and Indemnification to Office Holders
who
are Controlling
Shareholders
|
| By Order of the Board of Directors, | |
|
Liat
Menahemi-Stadler
General
Counsel and Corporate Secretary
|
|
|
Dated: January
8, 2008
|
| Date: _____________ | |
| To: ____________________ |
|
1.
|
The
Company
hereby exempts you in advance of any liability for any damage caused
to it
due to a breach of your duty of care towards it in your actions
by virtue
of your position as an office holder, and subject to those limitations
determined by any law. It is hereby clarified that the Company
does not
exempt you in advance from your liability towards it due to a breach
of
duty of care in an allocation, inasmuch as such applies to you,
if at
all.
|
|
2.
|
The
Company
hereby undertakes to indemnify you for indebtedness or expense
as detailed
in Paragraph 4 below, which may be imposed upon you or which you
paid
following actions you took by virtue of your being an office holder,
inasmuch as the indebtedness or expense was not actually paid by
an
insurance policy or an indemnification of a third
party.
|
|
3.
|
The
provisions
of this letter of exemption and indemnification are subject to
the
provisions of Chapter 3 of Part 6 of the Companies
Law.
|
|
4.
|
The
undertaking of indemnification stated in Paragraph 2 above, will
apply to
indebtedness or expense imposed upon you or paid by you, as
follows:
|
|
4.1
|
Monetary
indebtedness imposed upon you for the benefit of another person
by a court
ruling, including a judgment given in a compromise or an arbitrator's
rulling approved by court, due to actions you carried out by virtue
of
your being an office holder related, directly or indirectly, to
one or
more of the events detailed in the appendix to this letter of exemption
and indemnification (henceforth – "the Appendix")
provided that the maximum amount of indemnification will not exceed
the
amount detailed in Paragraph 5 below;
|
|
|
4.2
|
Reasonable
litigation expenses, including attorney's fees, which you spent
because of
an investigation or proceedings which was conducted against you
by an
authority authorized to conduct an investigation of proceedings,
and which
concluded without filing an indictment against you and without
a
|
|
monetary
indebtedness being imposed upon you instead of criminal proceedings,
or
which concluded without filing an indictment against you but with
a
monetary indebtedness being imposed upon you instead of criminal
proceedings in a criminal offence not requiring criminal proof
of Mens
Rea; in this paragraph – conclusion of proceedings
without filing an indictment in a matter in which a criminal
investigation was initiated – shall mean closing the case in accordance
with Section 62 of the Criminal Procedure Law [Integrated Version],
5742 –
1982 (in this Paragraph – the Criminal Procedure Law), or a stay in
proceedings by the Attorney General in accordance with Section
231 of the
Criminal Procedure Law; "Monetary indebtedness instead of criminal
proceedings" -monetary indebtedness legally imposed instead of
criminal
proceedings, including an administrative fine in accordance with
the
Administrative Offences Law, 57461985, a fine for an offence determined
to
be an offence punishable by fine in accordance with the provisions
of the
Criminal Procedure Law, a monetary sanction or
redemption;
|
||
|
4.3
|
Reasonable
litigation expenses, including attorney's fees, which you will
pay or for
which you will be made liable by the court, in proceedings conducted
against you by or in the name of the Company or by another person,
or in a
criminal indictment from which you will be acquitted, or in a criminal
indictment in which you will be convicted of a crime not requiring
proof
of Mens Rea.
|
|
5.1
|
The
amounts
which the Company will pay in accordance with Paragraph 4.1 above
to all
office holders in the aggregate, in accordance with all letters
of
exemption and indemnification that were issued and /or will be
issued in
accordance with the indemnification decisions
|
|
| 5.2 |
If
and to the extent that the
total of all the amounts which the Company will be required to
pay in
accordance with Paragraph 4.1 above at any date whatsoever,
with the addition of
the total of all the amounts that the Company has paid up to that
date, in
accordance with the letters of indemnification as defined in Paragraph
5.1
above, will exceed the maximum indemnity amount, the maximum indemnity
amount,
or the balance remaining of
it, respectively, will be divided between the office holders who
will be
entitled to the said amounts in respect of claims made by them
to the
Company under the letters of indemnification and were not paid
to them
prior to that
date, so that the amount that
each one of the said office holders will actually receive will
be
calculated according to the ratio between the amount due to each
one of
the office holders and the amount due to all the said office holders,
in
the aggregate,
at that date in respect of
these claims. If it becomes clear at a later date, that amounts
which the Company was required to pay have become available,
whether because of
|
| that stated in Paragraph 7 below or because of the dismissal of claims against office holders without the need to pay for them all or part of the amounts that the office holder claimed, the balance of the indemnification amount will be increased by the amounts made available and all the office holders who received only their relative share as stated above will be entitled to their relative share, pro rata, of the amounts made available. | ||
|
5.3
|
In
order to
clarify the manner of calculation detailed in Paragraph 5.2 above,
we
shall give the following example: let us assume that the maximum
indemnity
amount is 500. At a certain date, Office Holder A was paid an amount
of
100 in respect of an indemnification given to him. As a result,
the balance for indemnification after the payment stands at
400. At a later date, Office Holders B, C and D were sued, and
they claim indemnification from the Company in the amounts of 100,
200,
and 300 respectively. In such a case, since the amount of
indemnification claimed (600) is larger than the balance for
indemnification (400), the balance will be divided proportionately
between
the office holders in the following manner: Office holder B will
receive
400*100/600, Office holder C will receive 400*200/600, and Office
holder D
will receive 400*300/600. If after the said payment, it will
become clear that Office holder A was not entitled to indemnification,
an
amount of 100 will become available and it will be returned to
the general
fund. The amount that become available (100) will be divided
proportionately between B, C and D so that B will be paid an additional
amount of 100*100/600, C will be paid an additional amount of 100*200/600,
and D will be paid an additional amount of 100*300/600.
|
|
|
5.4
|
In
any event
the amount of indemnification paid to you by the Company, together
with
the amounts paid to you in the framework of an insurance policy
and/or in
accordance with an undertaking of indemnification by any third
party
whatsoever, will not exceed the amount of monetary indebtedness
and/or
expenses as stated in Paragraph 4 above, which was borne or incurred
by
you. For this matter, the amounts of the self participation according
to
the insurance policy, if such were set, will be considered as amounts
not
actually paid. If the Company will pay you or in your place amounts
which
you are entitled to receive in accordance with the insurance policy
and/or
in accordance with the undertaking of indemnification by any third
party
whatsoever, then you will assign the Company your rights to receive
the
sums in accordance with the insurance policy or the undertaking
of
indemnification by a third party, inasmuch as there is no impediment
to
the assignment of these rights, and you will authorize the Company
to
collect these amounts in your name, inasmuch as required to carry
out the
provisions of this Paragraph. If you collected directly from the
insurance
company or from any third party whatsoever, these amounts will
be returned
by you to the Company in accordance with the provisions of Paragraph
7
below.
|
|
6.
|
In
any event
in respect of which you may be entitled prima facie to
indemnification in accordance with this letter of Indemnification,
the
parties will act as follows:
|
|
6.1
|
Subject
to any
laws, the Company will notify you of any suspicion or threat that
legal
proceedings, an investigation or proceedings by an authorized authority,
may be initiated against you, this with due promptness after it
first
became known to the Company, and no later than at the end of 10
|
| business days after it first became known to the Company, and will give you, without delay, a copy of any document connected with the proceedings served to it by the originator of the proceedings. | ||
|
6.2
|
Subject
to any
laws, you will notify the Company of any legal proceedings, investigation
or proceedings by an authorized authority, initiated against you,
and of
any suspicion or threat that such will be initiated against you,
this with
due promptness after it first became known to you, and no later
than at
the end of 10 business days after it first became known to you,
and you
will give the Company or to whom it directs, without delay, a copy
of any
document connected with the proceedings served to you by the originator
of
the proceedings.
|
|
|
6.3
|
The
Company
will be entitled to take over the conducting of your legal defense
in the
framework of such proceedings and/or transfer the said conducting
to a
reputable attorney with experience in the relevant field whom the
Company
will choose for this purpose. The Company may appoint an attorney
as
stated above provided that your agreement is given in advance,
in writing,
to the identity of the attorney. However, your said agreement will
only be
withheld on reasonable grounds, including due to circumstances
in which
there is, in your reasonable opinion, a conflict of interests between
your
defense and that of the Company or another office holder. In the
event of
such conflict of interests, a separate attorney acceptable to you
will be
appointed on for you, in order to protect your personal
interests. Subject to the aforesaid, the Company and/or any
such lawyer are entitled to act in the framework of the said conducting
while reporting to you on a current basis and consulting with
you.
|
|
|
The
Company
and/or the said attorney will be allowed to bring the proceedings
to a
conclusion. However, the Company and/or the attorney will not agree
to a
compromise being made, as a result of which you will be convicted
of a
criminal offense or you will be required to pay amounts for which
you will
not be indemnified in accordance with this letter of indemnification
and
you will not be paid in the framework of the insurance purchased
by the
Company or in the framework of an indemnification by a third party,
except
with your prior consent in writing. The Company will not agree
to decide in a dispute by way of arbitration except after your
prior
consent in writing was received. However, your said consent
will not be withheld except on reasonable grounds.
|
||
|
At
the request
of the Company, you will sign any document authorizing the Company
and/or
any such attorney to conduct in your name your defense in the framework
of
those proceedings and to represent you in everything connected
to the
same, in accordance with the aforesaid.
|
||
|
6.4
|
You
will
cooperate with the Company and/or any such attorney in every reasonable
way required of you by any of them in the framework of their conducting
concerning those proceedings, including dedicating all the time
required
for dealing with those proceedings, signing requests, statements,
powers
of attorney and any other document, provided that the Company will
take
care of full cover of all the expenses involved so that you will
not be
required to pay them or to finance them yourself, all subject to
that
stated in Paragraphs 4 and 5 above.
|
|
6.5
|
The
Company
will not be obligated to indemnify you for any amount which will
be
charged to you following a compromise or arbitration arrangement,
unless
the Company's consent was given in advance in writing to the compromise
arrangement or the carrying out of that arbitration,
respectively.
|
|
|
6.6
|
Whether
the
Company exercises its right in accordance with Paragraph 6.3 above
or not,
the Company will take care of full cover of all the litigation
expenses
stated in Paragraphs 4.2 and 4.3 above, and will pay those expenses
so
that you will not be required to pay them or to finance them yourself,
all
subject to that stated in Paragraphs 4 and 5.4 above.
|
|
|
Subject
to Paragraph 7.1 below,
amounts that
will be
paid by the Company as stated above will be credited as an advance
payment
on account of the indemnification amount to which you will be entitled
in
accordance with this letter of indemnification.
|
||
|
6.7
|
Upon
your
request to make a payment in connection with any event whatsoever
in
accordance with this letter of indemnification, the Company will
take all
the steps required by law for its payment, and will act to arrange
for any
approval that may be required in connection with the same, if
required.
|
|
|
6.8
|
At
any time,
you may contact the Corporate Secretary and receive information
regarding
the amount of balance remaining for indemnification not yet paid
by virtue
of the letters of indemnification as defined in Paragraph 5.1
above.
|
|
7.1
|
If
the Company
paid you or instead of you any amounts in accordance with this
letter of
indemnification, including amounts in accordance with Paragraph
6.6 above,
and it became clear afterwards that you are not entitled to
indemnification from the Company for those amounts, the amounts
will be
considered as a loan provided to you by the Company which will
bear
interest at the minimum rate determined in accordance with section
3 (i)
of the Income Tax Ordinance, or any other law which will replace
it, as
may be from time to time, and which does not represent a taxable
benefit
to you.
|
|
|
In
the said
event, you will repay the loan when required in writing by the
Company to
do so, and in accordance with a payment arrangement which the Company
will
decide, with the approval of the Audit Committee of the
Company.
|
||
|
It
is hereby
clarified that, in the event that the Company paid you, or instead
of you,
litigation expenses, including attorney's fees, following an investigation
or proceedings carried out against by the authorized authority,
or
concerning criminal proceedings initiated against you, these amounts
will
be considered as a loan the Company provided you, on the conditions
stated
in this Section. If and when it will be made clear that the
Company may legally indemnify you for these amounts, these amounts
will
become indemnification amounts paid to you by the Company in accordance
with this letter of indemnification, you will not be required to
refund
them to the Company, the interest in respect of them
|
| will be waived, and the Company will bear tax payments which will therefore apply to you , inasmuch as there will be such. | ||
|
7.2
|
It
is hereby
clarified that amounts ruled in your favor in the framework of
legal
proceedings, a compromise arrangement or arbitration concerning
indebtedness or expenses which were previously paid to you or instead
of
you by the Company in accordance with this letter of indemnification,
will
be refunded by you to the Company immediately upon their receipt
by you.
In the event that the said amounts were ruled in your favor and
you have
not yet received them, you will assign the Company your rights
for the
receipt of the said amounts and/or authorize the Company to collect
these
amounts in your name.
|
|
8.
|
The
Company's
obligation in accordance with this letter of exemption and indemnification
will remain in your favor after the end of your service as an office
holder provided that the actions subject to this letter of exemption
and
indemnification were carried out during your period of service
as an
office holder.
|
|
9.
|
The
Company's
obligations in accordance with this letter of exemption and
indemnification will be interpreted widely and in a manner intended
for
their implementation, inasmuch as permitted by law, for the purpose
for
which they were intended. In the event of a contradiction between
any
provision in this letter of exemption and indemnification and the
provision of law which cannot be conditioned upon, changed or added
to,
the said provision of the law will prevail, but the aforesaid will
not
impair or derogate from the validity of the other provisions in
this
letter of exemption and indemnification.
|
|
10.
|
The
total of
all the indemnification amounts payable in accordance with Paragraph
4.1
of the letter of indemnification which were provided, including
those
which will be provided in the future, by virtue of the indemnification
decisions
|
|
11.
|
This
letter of exemption and
indemnification will
not impair or derogate from future decisions of the Company to
provide
indemnification in advance or after the fact in any matter subject
to all
laws, and shall not oblige the Company to provide you additional
indemnification to that stated in this
letter of exemption and
indemnification.
|
|
12.
|
The
Appendix to this letter of
exemption and indemnification is an integral part
thereof.
|
|
1.
|
A
transaction
within the meaning of Paragraph 1 of the Companies Law, including
the
transfer, sale, letting or acquisition of assets or liabilities,
including
securities, or the giving or receiving of right in any one of
them, and an
action directly or indirectly involved in such a
transaction.
|
|
2.
|
An
action,
including provision of information and documents, in connection
with a
transaction as set forth in Paragraph 1 above.
|
|
3.
|
A
report or
notice served by the Company or on its behalf, to the various
supervisory
authorities, including, but not limited to, the Ministry of
Communications, The Ministry of Treasury, the Ministry for the
Environmental protection, the Ministry of Industry, Trade and
employment,
etc.
|
|
4.
|
A
report or
notice served by the Company or on its behalf, by virtue of the
Communication Laws, Companies Laws, Securities Laws, the various
Tax Laws,
Untitrust Laws, statutes regulating labor relations or any other
law
obliging the Company to report or give notice, or a law of another
country
regulating similar matters and/or avoidance of serving the aforesaid
report or notice.
|
|
5.
|
A
report or
notice to the shareholders, whether regulated by laws of Israeli
and/or
foreign securities laws, or regulated by other laws.
|
|
6.
|
A
report or
notice which the Company is obligated to give by power of agreements
with
credit lenders, institutions and other third parties.
|
|
7.
|
Events
in
connection with change in ownership of the Company or change
in the
structure of the Company. Its reorganization, dissolution or
any decision
concerning them, including, but not limited to, merger, division,
change
in the capital of the Company, establishment of subsidiaries,
their
dissolution or sale, issuance and allocation.
|
|
8.
|
An
action in
the areas of the Company's business in connection with the setting
up of
sites and construction of technological engineering systems,
including
matters of Building and Planning, licensing of sites, licensing
of
businesses, security, insurance, environmental
protection.
|
|
9.
|
An
action in
the area of the Company's business in relation to interface with
its
customers, including in connection with customer data banks,
protection of
their privacy and matters covered by Consumer Protection
Laws.
|
|
10.
|
An
action in
the area of the Company's business with relation to the Company's
billing
interface with its customers, and with other communications
operators.
|
|
11.
|
An
action
connected with the relationships with the various communications
operators, dealers, importers, suppliers, consultants and additional
bodies with whom the Company enters into agreements and/or
cooperates.
|
|
12.
|
An
action
connected with multi-participant events which the Company is
accustomed to
hold from time to time with its customers, employees, agents,
dealers or
suppliers.
|
|
13.
|
A
remark,
saying including an expression of a position or opinion made
in good faith
by you as an office holder and by virtue of this position and
|
| including within the framework of meetings of the Board of Directors, one of its committees or in meetings of the Management. | |
|
14.
|
The
aforesaid
will apply with the required adjustments to such actions in "another
company".
|
|
15.
|
An
offer of
securities to the public/or listing of securities for trade in
a stock
exchange, In Israel or abroad, and publishing of a prospectus
for this
purpose.
|
|
16.
|
An
action,
including provision of information and documents, in connection
with that
stated in Paragraph 15 above.
|
| CELLCOM ISRAEL LTD. | ||||||
| Date: | January 8, 2008 | By: | /s/ Liat Menahemi Stadler | |||
| Name: | Liat Menahemi Stadler | |||||
| Title: | General Counsel | |||||