RETALIX LTD.

The oversight of the management of our business is vested in our board of directors, which may exercise all such powers and do all such acts as we are
authorized to exercise and do, and are not, by the provisions of our articles of association or by law, required to be exercised or done by our shareholders.
Our board of directors may, in its discretion, cause our company to borrow or secure the payment of any sum or sums of money for the purposes of our
company, at such times and upon such terms and conditions in all respects as it deems fit, and, in particular, by the issuance of bonds, perpetual or
redeemable debentures, debenture stock, or any mortgages, charges, or other securities on the undertaking or the whole or any part of the our property, both
present and future, including our uncalled or called but unpaid capital for the time being.
Dividend and Liquidation Rights
Our board of directors is authorized to declare dividends, subject to applicable law. Dividends on our ordinary shares may be paid only out of profits
and other surplus, as defined in the Companies Law, as of the end of the most recent financial statements or as accrued over a period of two years,
whichever is higher. Alternatively, if we do not have sufficient profits or other surplus, then permission to effect a distribution can be granted by order of
an Israeli court. In any event, a distribution is permitted only if there is no reasonable concern that the dividend will prevent us from satisfying our existing
and foreseeable obligations as they become due. Our board of directors is authorized to declare dividends, provided that there is no reasonable concern that
the dividend will prevent us from satisfying our existing and foreseeable obligations as they become due. Dividends may be paid in cash or other property.
In the event of our liquidation, after satisfaction of liabilities to creditors, our assets will be distributed to the holders of ordinary shares in proportion to
their respective holdings. Dividends and liquidation rights may be affected by the grant of preferential dividends or distribution rights to the holders of a
class of shares with preferential rights that may be authorized in the future.
Redeemable Shares
Our articles of association allow us to create redeemable shares, but at the present time, we do not have any redeemable shares.
Fiduciary Duties of Office Holders
The Companies Law imposes a duty of care and a duty of loyalty on all office holders of a company. The duty of care requires an office holder to act
with the level of care with which a reasonable office holder in the same position would have acted under the same circumstances.
The duty of care of an office holder includes a duty to use reasonable means to obtain:
information on the advisability of a given action brought for his approval or performed by him by virtue of his position; and
all other important information pertaining to these actions.
The duty of loyalty of an office holder includes a duty to:
refrain from any conflict of interest between the performance of his duties in the company and the performance of his other duties or his personal
affairs;
refrain from any activity that is competitive with the company;
refrain from exploiting any business opportunity of the company to receive a personal gain for himself or others; and
disclose to the company any information or documents relating to a company’s affairs which the office holder has received due to his position as an
office holder.
Approval of Certain Transactions Under Israeli Law
Under the Companies Law, the approval of the board of directors is required for all compensation arrangements of office holders who are not
directors. Under the Companies Law, director’s compensation arrangements require the approval of the audit committee, the board of directors and the
shareholders, in that order.
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