Companies Law, 5759-1999

The general manager shall be appointed and dismissed by the board of directors, unless otherwise provided in the articles of association.

Office holders in a company, other than directors and the general manager, shall be appointed and dismissed, in a public company and in a private company that is a bond company by the general manager, and in a private company that is not a bond company by the board of directors; all subject to any other provision in the articles of association.

Sections 225 to 226a, 231 to 232a, 233(2) and 234 shall apply, with the necessary modifications, in respect of an office holder who is not a director, in a public company and in a private company that is a bond company.

An office holder shall act at the level of skill at which a reasonable office holder in the same position and under the same circumstances would act, and shall in particular take, having regard to the circumstances of the matter, reasonable measures to obtain information relevant to the business viability of an act brought for that person's approval or of an act carried out by that person by virtue of that person's position, and to obtain any other information of importance for such acts.

The appointment of a director who has accounting and financial expertise or who has professional qualifications pursuant to sections 219(d) or 240(a1) does not alter the liability imposed upon that director or upon the other directors of the company under any law.

Where a director becomes aware of a matter of the company in which an apparent breach of law or an impairment of proper business conduct has come to light, that person shall act without delay to convene a meeting of the board of directors as referred to in section 98(b)(2).

"conclusion of a proceeding without the filing of an indictment in a matter in which a criminal investigation was opened" means the closing of a file pursuant to section 62 of the Criminal Procedure Law [Consolidated Version], 5742-1982 (in this subsection — the Criminal Procedure Law), or the staying of proceedings by the Attorney General pursuant to section 231 of the Criminal Procedure Law;

"monetary liability as an alternative to a criminal proceeding" means a monetary liability imposed by law as an alternative to a criminal proceeding, including an administrative fine under the Administrative Offences Law, 5746-1985, a fine in respect of an offence designated as a fine offence pursuant to the provisions of the Criminal Procedure Law, a financial sanction or a ransom payment;

A company may, if a provision to that effect has been established in its articles of association, enter into a contract to insure the liability of an office holder therein in respect of a liability to be imposed on that office holder arising from an act performed by that office holder by virtue of being an office holder therein, in any one of the following:

No effect shall be given to a provision in the articles of association permitting the company to enter into a contract to insure the liability of an office holder therein, to a provision in the articles of association or to a resolution of the board of directors permitting the indemnification of an office holder, or to a provision in the articles of association exempting an office holder from liability towards the company, in respect of any of the following: