ISRAEL Law and Practice Contributed by: Barak Platt, Micki Shapira and Moshe Pasker, Arnon, Tadmor-Levy
all but the most extreme “for cause” termina- tion situations, including upon resignation of the employee. In addition, the insurance policy must meet cer - tain criteria, including: • with respect to disbursements of pension/ provident and disability insurance; • the employment agreement must explicitly specify that the parties have entered into the arrangement; and • both employer and employee deposits must be made in line with the percentages set out in Section 14. 2.6 National Security Review The Advisory Committee for Evaluating National Security Aspects of Foreign Investments (the “Advisory Committee” ) was formed in 2019 to examine foreign investments from a national security perspective, in a centralised way. It began its work in 2020, establishing a mech - anism to handle regulator queries concern - ing transactions that may give rise to national security considerations. This ensures more encompassing and effective scrutiny of national security concerns across those sectors that the government views as critical to the economy and national security. Although substantial oversight powers over national security considerations in foreign investments are included in existing legislation, the Advisory Committee has authority to review transactions that are not subject to FDI regulato - ry requirements. While the Advisory Committee published a general methodology and guidelines in August 2024, as of now the transactions that it has reviewed and its recommendations have not been made public.
For additional national security-related restric - tions please see 2.3 Restrictions on Foreign Investments . 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments Class Action: Nestlé-Osem Merger Deal (December 2021) This was a class action lawsuit in which unfair pricing was alleged regarding “going-private” merger between Osem and its controlling share - holder, Nestlé. The allegation was based on con - flicts of interest and procedural flaws in the work of the independent board committee appointed by Osem to oversee the merger. The Supreme Court of Israel ruled that, when negotiations for a transaction with a control - ling shareholder are conducted independently through a special committee (which will consist solely of external and independent directors), and the transaction is approved by the audit committee, the board of directors, and the gen - eral meeting by a special majority that excludes interested parties, a rebuttable presumption of fairness arises, indicating that the transaction is fair (ie, “the business judgement rule” ). However, if it is found that significant flaws exist in the work of the independent committee, the court may exercise judicial review. This ruling strengthens the protection of the special inde - pendent committee’s work and the incentives for its establishment, while raising the threshold required to demonstrate flaws in its conduct. 3.2 Significant Changes to Takeover Law Proposed Amendment No 37 to the Israeli Com - panies Law will introduce significant changes
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