Translation from the Hebrew. The Hebrew version is the binding version. For the attention of: The Securities Authority www.magna.isa.gov.il For the attention of: The Tel-Aviv Stock Exchange Ltd www.tase.co.il August 23, 2010 Re: Israel Chemicals Ltd. ("the Company") Immediate Report on calling an Annual General Meeting of the shareholders of the Company Notice is hereby given in accordance with the Companies Law, 5759-2999 ("the Companies Law"), the Securities (Immediate and periodic reports) Regulations, 5730-1970 ("the Immediate Report Regulations") and the Companies (Notice and notification of a general meeting and a type meeting in a public company) Regulations, 5760-2000, concerning the calling of the Annual General Meeting of shareholders of the Company, which will convene on Tuesday, October 4, 2010, 2010 at 11:00, in the Company s offices at 23 Aranha Street, Millennium Tower (23 rd floor) in Tel-Aviv. The following items are on the agenda of the Annual General Meeting: 1. Presentation of the financial statements, Directors Report and Periodic Report of the Company for 2009, and discussion thereof. Presentation and discussion of the financial statements, Directors' Report and Periodic Report of the Company for 2009. Discussion only. No vote will be taken. 2. Reappointment of the Company s auditors and authorization of the Board of Directors of the Company to set their fees Reappointment of the Company s auditors, KPMG Somekh Chaikin, CPA, as auditors of the Company for 2010 and until the end of the next Annual General Meeting (including any auditing action or other review required, if required, for prior periods), and to authorize the Board of Directors to set their fees for auditing actions and other services for that period. In addition, a report will be given on the auditors' fees for auditing actions and contractual terms in respect of additional services in 2009. 3. Reappointment of the serving Directors (who are not external directors) in the Company and approval of remuneration for their service in the Company 3.1 Reappointment of all the directors serving on the Board of Directors of the Company who are not external directors (for names of the directors, see Resolution 3 on the Agenda below), for an additional term until the end of the next Annual General Meeting. 3.2 Remuneration 3.2.1 The remuneration paid to these directors will continue to be the maximum remuneration payable to external directors (or expert external directors, as the case may be) under the Companies (Rules concerning remuneration and expenses for an external director) Regulations, 5760-2000. 1
3.2.2 The directors whose names are listed below serve also, in addition to their service on the Board of Directors of the Company, on the boards of directors of wholly-owned subsidiaries of the Company: At Dead Sea Works Ltd and Rotem Amfert Negev Ltd. ("ICL Fertilizers Companies"): Nir Gilad, Avisar Paz, Victor Medina, Haim Erez, Moshe Vidman, Avraham (Baiga) Shochat. At Dead Sea Bromine Ltd. and Bromine Compounds Ltd. ("ICL Industrial Products Companies"): Nir Gilad, Avisar Paz, Yossi Rosen and Avraham (Baiga) Shochat. The remuneration to be paid to the above directors (as the case may be) in respect of their service in those subsidiaries, will be at the maximum rate payable to external directors (or expert external directors, as the case may be) under the Companies (Rules in the matter of remuneration and expenses for an external director) Regulations, 5760-2000, as may be from time to time, and according to the rank of the relevant subsidiary. The aforementioned subsidiaries have the highest ranking of the companies and accordingly, the maximum remuneration shall be paid. It is noted that one annual fee will be paid for serving on the boards of ICL Fertilizers Companies, and one annual fee for serving on the boards of ICL Industrial Products Companies. Under the terms of the management agreement and as noted in Section 3.3 below, directors' remuneration will not be paid for the service of Mr. Nir Glad and CPA Avisar Paz. 3.3 Notwithstanding the foregoing in Section 3.2, it is clarified that under the management agreement between the Company and Israel Corporation Ltd. (its controlling shareholder), which was approved by the Special General Meeting of shareholders of the Company on July 20, 2009 ("the Management Agreement"), during 2009 2011 (inclusive), no remuneration will be paid in respect of the service of directors who are employees of Israel Corporation or of H.L. Management & Consulting (1986) Ltd. (a wholly-owned subsidiary of Israel Corporation) who serve on the Board of Directors of the Company and its subsidiaries. Accordingly, the Company does not pay directors remuneration to Mr. Nir Gilad and CPA Avisar Paz for their service on the Board of Directors of the Company and its subsidiaries (as applicable). 3.4 The resolutions, as stated in sections 3.2 and 3.3 above, were approved by the Board of Directors on August 23, 2010. 3.5 All the directors who are proposed for appointment in this resolution, have signed a declaration in accordance with section 224B(a) of the Companies Law, a copy of which is attached as Appendix A to this report. For details of each of these directors to the extent required by Regulation 26 of the Immediate Reports Regulations, see Section E of the Company s Periodic Report for 2009 as published by the Company on March 24, 2010 (ref. 2010-01-427008). This mention constitutes inclusion by way of reference. 4. Appointment of a director 4.1 Appointment of Adv. Eran Sarig as a director in the Company until the end of the next Annual General Meeting. Below are details about Adv. Sarig, as required by Regulation 26 of the Immediate Reports Regulations: 2
Name: Eran Sarig ID No.: 027219062 Date of birth: April 3, 1974 Address for service of process: 15 David Avidan Street, Tel Aviv 69620 Citizenship: Israeli Membership of committees of the Board of Directors: To be decided Serving as an external director: No Is he an employee of the Company, a subsidiary, an affiliate or of an Yes. VP Business Development and Strategy at Israel Corporation. interested party, and what position does he hold: Commencement date as director: Education: Occupation during past five years: Other companies in which he serves as a director: Has professional qualifications Is he a relative of an interested party in the Company: Has accounting and financial expertise to comply with the minimum number set by the Board of Directors Expert external director Upon approval by the General Meeting LL.B., Tel Aviv University LL.M. Duke University, USA MBA, Herzliya Interdisciplinary Center Director, Global Business Development. Teva Pharmaceutical Industries: 2007 February 2010. Attorney, Teva Pharmaceutical Industries: 2004-2006. None Yes No Yes No 4.2 Attached to this report is Adv. Sarig's declaration, stating that he meets the requirements for his appointment as a director as laid down in Section 224B of the Companies Law. 4.3 Adv. Sarig was assessed by the Board of Directors of the Company as having accounting and financial expertise as defined in the Companies (Terms and tests for a director with accounting and financial expertise and for a director with professional qualifications) Regulations, 5766-2005. 4.4 Under the Management Agreement referred to in Section 3.,3 above, commencing with the start of his term of office and until the end of 2011, the Company will not pay directors remuneration to Adv. Sarig for his service on the Board of Directors of the Company. 4.5 A resolution according to Section 4 was approved by the Board of Directors of the Company on August 23, 2010. 3
5. Grant of note of exemption and undertaking to indemnify for Adv. Eran Sarig, and approval of the terms of his service for the matter of insurance 5.1 Subject to approval of his appointment as a director as aforesaid in Resolution 4 on the Agenda, it is proposed to approve grant of a note of exemption from liability and an undertaking to indemnify for Adv. Sarig, under the existing arrangement for officers in the Company, in accordance with the decision of the General Meeting of the Company on November 25, 2001 and on August 30, 2007, and as may be approved from time to time for Company officers. In addition, Adv. Sarig will be entitled to benefit from the existing insurance arrangement in the Company in accordance with the decision of the General Meeting on August 30, 2007 (as updated on November 10, 2008), and as may be approved from time to time for Company officers. 5.2 The proposed resolution was approved by the Audit Committee on August 22, 2010 and subsequently by the Board of Directors of the Company on August 23, 2010. Text of Proposed Resolutions on the Agenda 1. Presentation and discussion of the financial statements, Directors Report and Periodic Report of the Company for 2009. Discussion only. No vote will be taken. 2. To reappoint the Company s auditors, KPMG Somekh Chaikin, CPA, as auditors of the Company for 2010 until the end of the next Annual General Meeting (including all auditing actions or other review that shall be required, if required, for prior periods), and to authorize the Board of Directors to set their fees for auditing actions and the terms of engagement for other services for that period. 3. To reappoint all the directors currently serving on the Board of Directors of the Company (who are not external directors): Mr. Nir Gilad, Mr. Yossi Rosen, Mr. Avisar Paz CPA, Mr. Haim Erez, Mr. Victor Medina, Mr. Moshe Vidman and Mr. Avraham (Baiga) Shochat, for an additional term as directors in the Company until the end of the next Annual General Meeting. The remuneration that will be paid to these directors shall continue to be the maximum remuneration payable to external directors (or expert external directors, as the case may be) under the Companies (Rules concerning remuneration and expenses for an external director) Regulations, 5760-2000. Notwithstanding the foregoing, in accordance with the resolution of the Special General Meeting of the Company s shareholders on July 20, 2009, the Company shall not pay directors remuneration to Mr. Nir Gilad and CPA Avisar Paz for their service as directors on the Board of Directors of the Company and the Company s subsidiaries (as applicable). The remuneration to be paid to directors Haim Erez, Moshe Vidman and Avraham (Baiga) Shochat for their service in ICL Fertilizers Companies, and to directors Nir Gilad, Avisar Paz, Yossi Rosen, and Avraham (Baiga) Shochat for their service in ICL Industrial Products Companies, shall be the maximum rate payable to external directors (or to expert external directors, as the case may be) under the Companies (Rules concerning remuneration and expenses of an external director) Regulations, 5760-2000, as may be from time to time, and according to the rank of the relevant subsidiary. 4. To appoint Adv. Eran Sarig as a director in the Company until the end of the next Annual General Meeting. In accordance with the decision of the Special General Meeting of the Company s shareholders on July 20, 2009, the Company shall not pay directors remuneration to Adv. Sarig for his service on the Board of Directors of the Company. 5. To approve (subject to the approval of Resolution 4 on the Agenda) grant of a note of exemption from liability and an undertaking to indemnify Adv. Eran Sarig in the existing arrangement at the Company, in accordance with the decision of the General Meeting of the Company on November 25, 2001 and on August 30, 2007, and as may be approved from time to time for Company officers. Adv. Sarig 4
shall be entitled to benefit from the existing insurance arrangement at the Company as resolved by the General Meeting on August 30, 2007 (as amended on November 10, 2008), and as may be approved from time to time for Company officers. Majority Required The majority required for passing the resolutions on the Agenda of the Annual General Meeting (including an adjourned meeting, if held) is a majority of the votes of the shareholders who are present, in person or by proxy, who are entitled to attend the meeting and who participate in the vote (without taking abstentions into account). Quorum and Postponed Meeting A quorum for holding the meeting is constituted when there are at least two shareholders present, in person or by proxy, who together hold more than 50% of the issued shares granting voting rights in the Company, within half an hour of the time set for opening the meeting. If a quorum is not present at the general meeting at the end of half an hour from the time set for the start of the meeting, the meeting will be postponed to the same day of the following week, at the same time and in the same place. If at the postponed meeting a quorum is not constituted after the elapse of half an hour from the time set for the meeting, then two shareholders who have voting rights and who hold at least one third of the issued share capital of the Company, who are present in person or by proxy, shall constitute a quorum. Eligibility to Vote and Effective Date Pursuant to Section 182 of the Companies, the effective date for determining the eligibility of a Company shareholder for the matter of the right to attend and vote at the Annual General Meeting and the postponed meeting, is the close of trading on the Tel Aviv Stock Exchange Ltd. on September 20, 2010 ("the Effective Date"). A Company shareholder may attend and vote at the meeting in person, it or may appoint a proxy, who can attend the Annual General Meeting and vote on its behalf (as provided in the Articles of Association of the Company). A letter of appointment appointing such a proxy to vote ("the Letter of Appointment") must be in writing and signed by the appointer, and if the appointer is a corporation, it must be signed in a way that is duly binding upon the corporation. The Letter of Appointment should be deposited in the Company's offices at least 48 hours prior to the start of the meeting or the postponed meeting, as the case may be. Pursuant to the Companies (Proof of ownership of a share for voting at the general meeting) Regulations, 5760-2000, a shareholder in whose name a share is registered with a member of the stock exchange and that share is included among the shares registered in the register of members in the name of the nominees company, who wishes to vote at the General Meeting, should submit to the Company confirmation from that member of the stock exchange with which its right to a share is registered, concerning its ownership of the share on the Effective Date, as required under those Regulations. Review of the Immediate Report A copy of this report can be reviewed by appointment with the General Counsel and Company Secretary, Adv. Lisa Haimovitz, at the registered office of the Company, 23 Aranha Street, Millennium Tower, Tel Aviv, at telephone no. 03-6844412, on Sunday Thursday between 09:00 and 16:00, up to the date of convening the Annual General Meeting, and also on the website of the Securities Authority at www.magna.isa.gov.il. 5
Yours sincerely, Israel Chemicals Ltd. 6