XTL BIOPHARMACEUTICALS LTD.

External and Independent Directors
The Israeli Companies Law requires Israeli companies with shares that have been offered to the public either in or outside of Israel to appoint
two external directors. No person may be appointed as an external director if that person or that person’s relative, partner, employer or any entity under
the person’s control, has or had, on or within the two years preceding the date of that person's appointment to serve as an external director, any
affiliation with the company or any entity controlling, controlled by or under common control with the company. The term affiliation includes:
No person may serve as an external director if that person’s position or business activities create, or may create, a conflict of interest with that
person's responsibilities as an external director or may otherwise interfere with his/her ability to serve as an external director. If, at the time external
directors are to be appointed, all current members of the Board of Directors are of the same gender, then at least one external director must be of the
other gender. A director in one company shall not be appointed as an external director in another company if at that time a director of the other
company serves as an external director in the first company. In addition, no person may be appointed as an external director if he/she is a member or
employee of the Israeli Security Authority, and also not if he/she is a member of the Board of Directors or an employee of a stock exchange in Israel.
External directors are to be elected by a majority vote at a shareholders' meeting, provided that either:
The initial term of an external director is three years and may be extended for an additional three-year term. An external director may be
removed only by the same percentage of shareholders as is required for their election, or by a court, and then only if such external director ceases to
meet the statutory qualifications for their appointment or violates his or her duty of loyalty to the company. At least one external director must serve on
every committee that is empowered to exercise one of the functions of the Board of Directors.
An external director is entitled to compensation as provided in regulations adopted under the Israeli Companies Law and is otherwise
prohibited from receiving any other compensation, directly or indirectly, in connection with service provided as an external director.
Ido Seltenreich and Vered Shany serve as external directors pursuant to the provisions of the Israeli Companies Law. They both serve on our
audit committee, our nomination committee and our compensation committee.
Subject to certain exceptions, issuers that list on NASDAQ must have boards of directors including a majority of independent directors, as
such term is defined by NASDAQ. We are in compliance with the independence requirements of both the SEC and NASDAQ.
Audit Committee
• an employment relationship;
• a business or professional relationship maintained on a regular basis;
• control; and
• service as an office holder, other than service as an officer for a period of not more than three months, during which the company first
offered shares to the public.
• the majority of shares voted at the meeting, including at least one-third of the shares held by non-controlling shareholders voted at the
meeting, vote in favor of election of the director, with abstaining votes not being counted in this vote; or
• the total number of shares held by non-controlling shareholders voted against the election of the director does not exceed one percent of
the aggregate voting rights in the company.
The Israeli Companies Law requires public companies to appoint an audit committee. The responsibilities of the audit committee include
identifying irregularities in the management of the company’s business and approving related party transactions as required by law. An audit
committee must consist of at least three directors, including all of its external directors. The chairman of the Board of Directors, any director employed
by or otherwise providing services to the company, and a controlling shareholder or any relative of a controlling shareholder, may not be a member of
the audit committee. An audit committee may not approve an action or a transaction with a controlling shareholder, or with an office holder, unless at
the time of approval two external directors are serving as members of the audit committee and at least one of the external directors was present at the
meeting in which an approval was granted.
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