document with the SEC describing the tax treatment provided therein. There can be no assurance that such ruling or rulings will be granted before the Closing or at all or that, if obtained, such
ruling or rulings will be granted under the conditions requested by Orbotech.
Exemption from Israeli Tax withholding with respect to Merger
Consideration payable to foreign-resident
(non-Israeli)
shareholders holding their shares through foreign brokers and with respect to registered shareholders (other than Interested Parties, as
defined in the Withholding Tax Ruling)
.
Generally, the Merger Consideration payable to foreign-resident
(non-Israeli)
shareholders holding their shares through foreign brokers
(other than such shareholders holding shares through TASE members)
and the Companys foreign-resident
(non-Israeli)
registered shareholders shall be exempt from Israeli tax withholding.
Foreign-resident
(non-Israeli)
registered shareholders are shareholders who are not
residents of Israel and hold Orbotech shares that are listed on the NASDAQ Global Select Market (Nasdaq) and registered with American Stock Transfer & Trust Company LLC, Orbotechs transfer agent.
The eligibility requirements for the exemption from Israeli Tax Withholding include the following:
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i.
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the shareholder holds no more than 5% of the Companys outstanding shares;
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ii.
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the shareholder is a beneficial owner of such shares (i.e., (a) such shareholder is the legal and economic
beneficiary of the rights arising from the Orbotech shares; and (b) with respect to a
non-individual
shareholder, it has actual activity and is not a pass-through entity aiming to
reduce or avoid Israeli taxation);
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iii.
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the shareholder purchased such shares after their listing on Nasdaq (i.e., after August 9, 1984) and was
not an Israeli resident at the time such shares were purchased; and
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iv.
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the shareholder provides a declaration with respect to its residency and to its entitlement to an exemption
from tax withholding by submitting a declaration of status for Israeli income tax purposes (the Declaration of Status).
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Additionally, all
non-individual
shareholders, as well as individual shareholders receiving Merger
Consideration in excess of $100,000, must provide a certificate of residency for tax purposes from the tax authority of its state of residency. Each individual shareholder must also provide a copy of his/her passport.
Israeli Tax Withholding with respect to Cash Merger Consideration payable to shareholders holding their shares through TASE members (other than Interested
Parties).
With respect to the Cash Merger Consideration payable to shareholders holding their shares through TASE members (other than
Interested Parties), Israeli income tax shall be withheld by the applicable TASE member, in accordance with the Ordinance and the rules promulgated thereunder.
Israeli Tax Withholding with respect to Merger Consideration payable to foreign-resident employees of Orbotechs subsidiaries.
Generally, the Merger Consideration payable to foreign-resident employees of the Companys foreign subsidiaries in respect of their
options and/or settled RSUs and restricted shares, will be eligible to be exempt from Israeli withholding tax.
The eligibility for such
exemption is subject to the submission, by the employee, of a declaration regarding his/her residency and entitlement to such exemption. Each foreign-resident employee must provide a copy of his/her passport and any foreign-resident employee
receiving Merger Consideration in excess of $100,000 must also provide a confirmation from the tax authorities of his/her state of residency confirming its tax residency status.