Procedure for meetings between officers and Shareholders

Pursuant to legal position no. 101-24: “Engagement Between a Reporting Corporation and those Investing in its Securities”, published by the Israel Securities Authority of March 2021 (hereafter – the “Authority’s Staff Position”), which recommends that corporations consider publishing the key points of the procedures relating to investor relations, in order to inform investors of the manner by which investors may contact and maintain relations with the corporation, encourage investors’ involvement in the corporation's affairs and generate certainty among all investors as to the existence of such interfaces with the corporation; and further to what is stated in Section 11.3.1.2 to the Report on the Corporation’s Affairs as of December 31^st, 2020 regarding the Company’s procedure dealing with meetings between officers and shareholders, as adopted by the Board of Directors on November 3^rd, 2020 (hereafter – the “Procedure”), set forth below are the key points of this procedure.

The decision to adopt the procedure was made, among other things, following the conclusions and recommendations of the report issued by the external examiner, Prof. Yoram Danziger, which deals with the engagement between directors and shareholders, while reviewing different relevant approaches in the literature and the development of relevant trends around the world regarding this issue. It should be noted that the Company’s decision was made prior to the publication of the Authority’s Staff Position, which also pointed out that the adoption of a policy and procedures whose objective is to regulate the different interfaces between the corporations and their investors may contribute to proper corporate governance, improve the interfaces between the corporations and the investors and increase investors’ confidence in the corporations in particular and in the capital market in general. After reviewing prevailing trends around the world regarding meetings between officers and shareholders, as well as the legal situation in Israel, the company decided to allow its officers to meet with shareholders in accordance with principles set out for that purpose in the adopted procedure.

The procedure sets principles which enshrine the existing practice and the Israel Securities Authority’s positions as to multiple participants’ meetings with shareholders as part of the investor relations activity, while putting in place guidelines as to the manner by which such meetings should be conducted (including using digital means); delivering advance notice through an immediate report; defining the contents that may be discussed in such meetings; regulating the duty to document and report the key points of such meetings, etc. It should be noted that in generally, the Company shall hold meetings with many participants between officers and shareholders – using technological means or face to face – at least twice a year, shortly after the publication of the financial statements.

In addition, the procedure also regulates the rules regarding meetings between individual officers  and shareholders (in their capacity as shareholders); these rules include a guiding principle whereby such meetings shall only be carried out as “one on one” meeting, under extraordinary circumstances. The procedure also regulates the issue of the identity of the officers who may meet with a shareholder and potential composition of the attendees of such meetings (a combination of several officers); the identity of the party that may suggest the holding of a meeting (including a clarification to the effect that a shareholder may also suggest a meeting); “blackout periods” during in which meetings with shareholders will generally not take place (before the publication of financial reports); the frequency of meetings, their location (at the company’s offices or at the shareholder’s offices on using technological means); the duty to inform the relevant organs of the company that a meeting is due to take place and the duty to document the content of the meeting once it has taken place; restrictions placed on the contents that may be discussed in such meetings (including regarding the sharing of material information about the corporation as per the Authority’s Staff Position); specific instructions as to holding meetings and dedicated arrangements as part of the appointment committee, whose role is to recommend candidates for service as company directors, and more. It should be noted that the key points of the procedure on meetings with shareholders will apply, mutatis mutandis to the correspondence between officers and shareholders. It should also be noted that the internal auditor shall hold an internal audit at least once every two years, to verify that the provisions of this procedure are implemented.