SCHEDULE 14A
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INFORMATION REQUIRED IN PROXY STATEMENT
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CORPORATION NAME
TAT TECHNOLOGIES LTD.
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(Name of Registrant as Specified in itsIn Its Charter)
-------------------------------------------------------------------------------CORPORATION NAME
TAT TECHNOLOGIES LTD.
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TAT TECHNOLOGIES LTD.
P.O. BOX 80
GEDERA 70750, ISRAEL
NOTICE OF ANNUAL GENERALSPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 26, 2002, 2004
NOTICE IS HEREBY GIVEN that an Annual Generala Special Meeting of Shareholders (the
"Annual"Special Meeting") of TAT Technologies Ltd. (the "Company") will be held on Thursday, December 26, 2002,
2004 at 2:00 P.M. Israel time, at the Company's executive offices in Park Re'em
Industrial Zone, Yasour,Bnei Ayish, Israel, to consider and act upon the following
matters:
PROPOSAL 1
1. To elect eight directorsapprove the Share Purchase Agreement between the Company and
T.O.P. Limited Partnership (the "Investor") pursuant to servewhich the Company will
sell to the Investor an aggregate of 857,143 Ordinary Shares (the "Issued
Shares") of its capital stock and issue warrants to the Investor to purchase an
additional 500,000 Ordinary Shares, (the "Warrant Shares"); which in such officethe
aggregate would represent the issuance of more than twenty percent (20%) of the
issued and outstanding Ordinary Shares as of the Record Date, and therefore
would require shareholder approval under Rule 4460 of the National Association
of Securities Dealers, Inc. and to approve all other documents related to the
Transaction and, subject to the provisionscompletion of the Company's ArticlesTransaction, to appoint Mr.
Ishay Davidi, Mr. Gillon Beck and Mr. Yechiel Gutman as members of Association.
2. To reappoint Kost, Forer and Gabbay as independent auditors
of the Company for the year ending December 31, 2002 and to authorize the Board of
Directorsthe Company;;
PROPOSAL 2
2. To approve an amendment to determine their remuneration.the employment agreement by and between
the Company and Shlomo Ostersetzer;
PROPOSAL 3
3. To approve amendmentsan amendment to the Company's Articles of
Association, whereby the Company's Board of Directors shall have the power to
declareemployment agreement by and pay dividends without prior shareholder approval.
4. To receive the auditor's report, the financial statements ofbetween
the Company and Dov Zeelim; and
PROPOSAL 4
4. To approve the directors' report onemployment agreement by and between the Company forand
Yossi Rosenberg;
PROPOSAL 5
5. To approve the fiscal year ended
December 31, 2001.
5.employment agreement by and between Limco Airpair
Inc. and Eran Frenkel and the employment agreement by and between the Company
and Eran Frenkel;
PROPOSAL 6
6. To approve an Amendment of the Article of Association of the
Company;
PROPOSAL 7
7. To approve the purchase of a Directors and Officers liability
insurance policy.
PROPOSAL 8
8. To approve a directors and officers exemption and indemnification
undertaking by the Company.
PROPOSAL 9
9. To transact such other businessesbusiness as may properly come before the
meeting orSpecial Meeting and any adjournmentcontinuations and adjournments thereof.
A shareholder who wishes to vote at the AnnualSpecial Meeting by proxy must
deliver a proxy to the offices of the Company no later than 48 hours before the
time appointed for the AnnualSpecial Meeting or any adjournment thereof.
A quorum required for the AnnualSpecial Meeting consists of at least two
shareholders present in person or by proxy, holding or representing at least
one-third50.1% of the total voting rights of the Company. If, within half an hour after
the time appointed for the holding of the AnnualSpecial Meeting, a quorum is not
present, the AnnualSpecial Meeting shall be adjourned to the same day in the next week
at the same time and place or any other time as the Board of Directors of the
Company shall designate and state in a notice to the shareholders, and if, at
such adjourned meeting, a quorum is not present within half an hour after the
time appointed for holding the meeting, two shareholders present in person or by
proxy shall constitute a quorum.
Approval of the proposals to be voted at the Special Meeting excluding
proposal. 6, requires the affirmative vote of the majority of shareholders
present in person or by proxy and entitled to vote thereon; proposal 6 requires
the affirmative vote of 75% of shareholders present in person or by proxy and
entitled to vote thereon. In addition, the approval of all of the proposals
requires: (1) the affirmative vote of no less than one-third of the votes of the
non-controlling shareholders represented at the Special Meeting in person or by
proxy, entitled to vote thereon and voting thereon: or (2) the total votes of
non-interested shareholders voting against the resolution are not in excess of
one percent of the Company's voting rights.
The accompanying Proxy Statement contains further information with
respect to these matters and the text of the resolutions proposed to be adopted
at the AnnualSpecial Meeting.
The Board of Directors has fixed the close of business on November
14, 2002,2004 (the
"Record Date"), as the record date for the determination of the shareholders
entitled to notice of and to vote at the annual meetingSpecial Meeting and any adjournments or
postponements thereof. Only holders of record of the Company's common stock on
the record date are entitled to vote at the meeting.
By Order of the Board of Directors
/s/ Avi Kahana
Avi Kahana, Secretary
Gedera, Israel
November __, 2002June , 2004
PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND PROMPTLY RETURN IT IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.
TAT TECHNOLOGIES LTD.
PRELIMINARY PROXY STATEMENT
INTRODUCTION
This Proxy Statement and enclosed form of proxy are being furnished
commencing, on or about November 14, 2002,_____, 2004, in connection with the solicitation by the
Board of Directors of TAT Technologies Ltd., an Israeli corporation (the
"Company"), of proxies in the enclosed form for use at the Annual GeneralSpecial Meeting of
Shareholders (the "Annual"Special Meeting") to be held on December 26, 2002,_____, 2004, and at any
adjournments thereof for the purposes set forth in the accompanying Notice of
Annual GeneralSpecial Meeting of Shareholders.
Any proxy given pursuant to such solicitation and received prior to the
AnnualSpecial Meeting will be voted as specified in such proxy. If no instructions are
given, proxies will be voted (i) FOR the election of the nominees for
directors listed herein, (ii) FOR the reappointment of Kost, Forer and Gabbay as
independent auditors for the Proposals recommended by the Company's fiscal year ending December 31, 2002 and
authorizing the
Board of Directors to determine their remuneration, and (iii)
FOR the receipt of the auditor's report, the Company's financial statements and
the directors' report on the Company for the fiscal year ended-December 31,
2001.Directors.
Any proxy may be revoked by written notice received by the Secretary of
the Company at any time prior to the voting thereof, by submitting a subsequent
proxy or by attending the AnnualSpecial Meeting and voting in person. In
addition at the Annual Meeting, the Company will distribute to those
shareholders in attendance a copy of the auditor's report with respect to the
Company's financial statements for the fiscal year ended December 31, 2001, as
well as a copy of such financial statements and will present the directors'
report on the Company.
VOTING AT THE MEETING
The Board of Directors has fixed the close of business on November
14, 2002, 2004 (the
"Record Date"), as the record date for the determination of the shareholders
entitled to notice of and to vote at the annual meetingSpecial Meeting and any adjournments or
postponements thereof. Only holders of record of the Company's common stock on
the record date are entitled to vote at the meeting.
As of the Record Date, there were 4,474,9864,688,516 Ordinary Shares
outstanding. Each Ordinary Share entitles the holder thereof to one vote on all
of the proposals to be voted on at the AnnualSpecial Meeting.
The quorum required for the AnnualSpecial Meeting consists of at least two
shareholders present in person or by proxy, holding or representing at least
one-third50.1% of the total voting rights of the Company. If the AnnualSpecial Meeting is
adjourned for lack of a quorum it will be adjourned to the same day in the next
succeeding week at the same time and place or at any other time as the Board of
Directors of the Company shall designate and state in a notice to the
shareholders. If at such adjourned meeting a quorum is not present within half
an hour from the time appointed for holding the meeting, two shareholders
present in person or by proxy will constitute a quorum.
Approval of the proposals to be voted at the Special Meeting excluding
proposal 6, require the affirmative vote of the majority of shareholders present
in person or by proxy and entitled to vote thereon; proposal 6 requires the
affirmative vote of 75% of shareholders present in person or by proxy and
entitled to vote thereon; In addition, the approval of all of the proposals
should include one of the following: (1) the affirmative vote no less than
one-third of the votes of the non-controlling shareholders represented at the
Special Meeting in person or by proxy, entitled to vote thereon and voting
thereon; or (2) the total votes of non-interested shareholders voting against
the resolution are not in excess of one percent of the Company's voting rights
3
PROPOSAL NO. 1 ELECTIONAPPROVAL OF DIRECTORS
EightISSUANCE OF SHARES TO TA-T.O.P. LIMITED PARTNERSHIP
PROPOSAL 1
1. To approve the Share Purchase Agreement between the Company and
TA-T.O.P. Limited Partnership (the "Purchaser") pursuant to which the Company
will sell to the Purchaser an aggregate of 857,143 Ordinary Shares (the "Issued
Shares') of its capital stock in exchange for $6,000,001 and issue warrants to
the Purchaser to purchase an additional 500,000 Ordinary Shares (the "Warrant
Shares"), which in the aggregate would represent the issuance of more than
twenty percent (20%) of the issued and outstanding ordinary shares as of the
Record Date, and therefore would require shareholder approval under Rule 4460 of
the National Association of Securities Dealers, Inc. The Warrants are
exercisable at $8.50 per share and all other Transaction Documents and, subject
to the completion of the Transaction, to appoint Mr. Ishay Davidi, Mr. Gillon
Beck and Mr. Yechiel Gutman as members of the Board of the Company. More details
of the total transaction with the Purchaser and biographical information with
respect to the three directors are disclosed immediately following the
Proposals.
PROPOSAL 2
2. To approve an amendment to the employment agreement by and between
the Company and Shlomo Ostersetzer (the amendment is detailed immediately
following the proposals); and
PROPOSAL 3
3. To approve an amendment to the employment agreement by and between
the Company and Dov Zeelim; (the amendment is detailed immediately following the
proposals); and
PROPOSAL 4
4. To approve the employment agreement by and between the Company and
Yossi Rosenberg (the details of Mr. Rosenberg's employment agreement are
disclosed immediately following the proposals);
PROPOSAL 5
5. To approve the employment agreement by and between the Company and
Eran Frenkel (the details of Mr. Frenkel's employment agreement are disclosed
immediately following the proposals);
PROPOSAL 6
6. To approve an Amendment of the Article of Association of the Company
(the details of the Amendment are disclosed immediately following the
proposals);
PROPOSAL 7
7. To approve the purchase of Directors and Officers liability
insurance policy.
PROPOSAL 8
8. To approve a directors and officers' exemption and indemnification
undertaking by the Company.
4
PROPOSAL 9
9. To transact such other business as may properly come before the
Special Meeting and any continuations and adjournments thereof.
THE TRANSACTION
On June 15, 2004, the Company entered into a Share Purchase Agreement
(the "Agreement") with TA-T.O.P., Limited Partnership (the "Purchaser"), which
is wholly-owned by Ta-Tek Ltd., an Israeli private company wholly-owned by FIMI
Opportunity Fund ("FIMI"). The Agreement provides for the purchase of 857,143
shares of the Company's stock by the Purchaser in exchange for $6,000,001. The
Purchaser has certain demand and piggy-back registration rights with respect to
the shares. As part of the transaction, the Company's parent company TAT
Industries, Ltd., certain management shareholders of the Company and the
Purchaser agreed to enter into a shareholder's agreement, which provides among
things that the Purchaser shall have the right to designate three members to
serve on the Company's Board of Directors. The Shareholder's agreement also
provides for certain standard bring along and tag along rights, as well as a
right of first refusal with respect to any shares proposed to be electedsold by any of
the parties. The shareholder's agreement also provides for a lock-up whereby no
party may sell more than 150,000 shares prior to serveJune 2006 and a standstill
restriction, which provides that the Purchaser shall not purchase (in the open
market or otherwise) an amount of shares, which would increase the Purchaser's
ownership of the Company to above 35%.
As part of the transaction, the Purchaser will also receive warrants to
purchase an aggregate of 500,000 shares of the Company's common stock at $8.50
per share. The warrants are exercisable for 66 months. In addition, FIMI and the
Company entered into a Credit Line Agreement, which provides for a line of
credit in such officean amount of up to $2,000,000. Loans made pursuant to the credit line
bear interest at 5% per annum and are repayable on or before December 15, 2009.
The Company will pay an annual commitment fee equal to .5% of the amount of the
credit line. The parties entered into a management agreement, which provides
that the Company will engage FIMI to provide certain management services to the
Company in exchange for annual payments equal to 3% of the operating profit of
the Company for that year in excess of US$ 500,000; provided however that in no
event will the total management fees in any given year exceed $250,000 per
annum. The agreements are subject to the approval of the Company's shareholders.
Shareholders may receive copies of the applicable agreements by e-mailing a
request to the Company's Secretary (Avi@tat.co.il).
BIOGRAPHICAL INFORMATION ON PROPOSED DIRECTORS.
MR. ISHAY DAVIDI (42) IS THE CEO & SENIOR PARTNER, FIMI FUNDS. Mr. Davidi is the
founder of FIMI fund (Founded 1997), and serves as CEO and senior partner in
FIMI. Mr. Davidi serves as Director in several of the Fund Portfolio companies.
Prior to this position, he held the position of manager of an Israeli VC Fund,
and prior to that, CEO in two industrial companies. Mr. Davidi holds a BSc in
Industrial Engineering from Tel Aviv University, and received an MBA in Finance
from Bar Ilan University.
MR. GILLON BECK (42) IS A PARTNER IN THE FIMI OPPORTUNITY FUND. Mr. Beck
currently serves as partner in the FIMI opportunity Fund, and serves as a
director in several of the Fund Portfolio companies. Prior to this position, he
held the position of C.E.O & President of Arad Ltd Group, a world leader and
manufacturer of water measurement technologies. Mr. Beck holds a BSc Cum-Laude
in Industrial Engineering from the Israel Institute of Technology Technion, and
he received an MBA in Finance from Bar Ilan University.
5
ADV. GUTMAN YECHIEL (59) Adv. Gutman is a member of the Israeli Security
Authority (ISA) management. He also serves as a Director in many Israeli
companies, among them are Israel Refinery Company, E1-A1 (The National
Air-line), Bank OTZAR HACHAYAL (Subsidiary of HAPOALIM Bank). Adv. Gutman served
as Advisor to the Minister of Justice. Adv. Gutman holds an LLB, and MA, from
the Hebrew University, Jerusalem. Mr. Yechiel would be classified as an
independent director.
AMENDMENT TO THE EMPLOYMENT AGREEMENT WITH SHLOMO OSTERSETZER
The current employment agreement with Mr. Ostersetzer, provides for an annual
salary of $180,000 per year, with a bonus equal to 2.5% of the Company's income
from operations, in excess of $500,000. The shareholders are being asked to
approve an amendment to the employment pursuant to which the agreement will be
valid for a minimum period until December 31, 2007. Mr. Ostersetzer can give 12
months advance notice of termination of his employment not before January 1,
2008. The Company can give 12 months advance notice of termination of employment
not before January 1, 2007, provided that if the Company gives the advance
notice prior to July 1, 2008 it has to be approved by at least four directors
(not including the Directors nominated by FIMI).
AMENDMENT TO THE EMPLOYMENT AGREEMENT WITH DOV ZEELIM
The current employment agreement with Mr. Zeelim, provides for an
annual salary of $170,000 per year, with a bonus equal to 2.5% of the Company's
income from operations, in excess of $500,000. The shareholders are being asked
to approve an amendment to the employment pursuant to which the agreement will
be valid for a minimum period until December 31, 2007. Mr. Zeelim can give 12
months advance notice of termination of his employment not before January 1,
2008. The Company can give 12 months advance notice of termination of employment
not before January 1, 2007, provided that if the Company gives the advance
notice prior to July 1, 2008 it has to be approved by at least four directors
(not including the Directors nominated by FIMI.)
EMPLOYMENT AGREEMENT WITH YOSSI ROSENBERG
Mr. Rosenberg is the Son in Law of Mr. Shlomo Ostersetzer and serves as Vice
President Economics. The main terms of Mr. Rosenberg's Employment Agreement are:
a monthly salary N.I.S. 30,000 (ap. $6,650) + social benefits, linked to Israeli
con Index; a yearly increase of salary equal to 5% above the said Israeli Index;
a Company car, telephone, reimbursement of expenses (including yearly
professional seminar up to $3,000) and a minimum yearly bonus of $12,000.
EMPLOYMENT AGREEMENT WITH ERAN FRENKEL
Mr. Frenkel is the Son in Law of Mr. Dov Zeelim and serves as Vice President
Business Development of Limco Airepair Inc. The main terms of Mr. Frenkel's
Employment Agreement are: a monthly salary of US$ 6,666 plus social benefits; a
yearly increase of salary equal to 5%; US$ 10,000 per year participation by the
Company in Mr. Frenkel Housing Expenses in the USA; a Company car, telephone,
reimbursement of expenses (including yearly professional seminar up to $3,000);
Minimum yearly bonus of $12,000 and Sales Commission of 1.5% up to US$ 30,000
per year. When Mr. Frenkel will end his employment by Limco and return to Israel
he will be appointed as Vice President of the Company under the same terms as in
Mr. Rosenberg's agreement.
6
AMENDMENT OF THE ARTICLE OF ASSOCIATION OF THE COMPANY
To approve an amendment to the Articles of Association of the Company on the
following issues: (1) All resolutions of the shareholders meetings shall pass by
a simple majority of votes present and participating at the meeting; and (2) The
Articles regarding exemption, indemnification and liability insurance of
directors and officers shall be adjusted to the provisions of the Company'sIsraeli
Companies Law; A copy of the proposed resolutions amending the Articles of
Association. Background information
with respect to the Board of Directors' nominees for election all of whom are
incumbent directors, appears below.
SHLOMO OSTERSETZER, 75, has served as Chairman of the Board of
DirectorsAssociation of the Company since April 1985. Mr. Ostersetzer has also servedis attached as Chief Executive Officer of the Company since 1990. Mr. Ostersetzer was one of
the founders of TAT Industries in 1968, the Company's controlling shareholder,
and has served in various capacities since 1970, including President, Managing
Director and Chairman of the Board of Directors of TAT Industries. Mr.
Ostersetzer received his M.Sc. in Mechanical Engineering from ETH-Polytechnical
Institute in Zurich, Switzerland.
DOV ZEELIM, 62, has served as Vice Chairman of the Board of Directors
of the Company since April 1985 and has served as President and Chief Operating
Officer since August 2000. In addition, Mr. Zeelim has served in various
managerial capacities of TAT Industries for over 21 years, including Managing
Director, Executive Vice President and Vice Chairman. Mr. Zeelim is licensed as
a C.P.A. in Israel. Mr. Zeelim is the father of Lior Zeelim, a director of the
Company.
ISRAEL OFEN, 53, has served as Executive Vice President since August
2000, Chief Financial Officer since August 1993 and a director of the Company
since April 1985. In addition, Mr. Ofen has served to various other managerial
capacities, including, Managing Director, President and Vice President of
Finance. In addition, Mr. Ofen has served as General Manager of TAT Industries
since August 2000, a member of the board since 1987, and was Vice President of
Finance for ten years. Mr. Ofen is licensed as a C.P.A. in Israel.
MOSHE TACHNAI, 60, has been a director of the Company since 1985. Mr.
Tachnai has served in various capacities with TAT Industries since 1968.
Presently, Mr. Tachnai is a Manager with Memtech Ltd., a company engaged in
electronics and computer systems and a director of Novo Media Ltd., a company
engaged in printing. Mr. Tachnai studied engineering at the Technion, Israel
Institute of Technology, and business management at the Israeli Labor
Productivity Institute.
DR. MEIR DVIR, 71, has served as a director of the Company since
December 1994. Mr. Dvir has served as deputy General Manager of Business
Research and Development of the Israeli Aircraft Industries since 1985. He is
also a director of Elta-Electronics Industries Ltd., Comodor Aviation Inc. and
Desakrallo the Technologies Systemas Ltd. Mr. Dvir received his Ph.D. in exact
science (mathematics and physics) from the Hebrew University in Jerusalem.
YAACOV FISH, 53, has served as a director of the Company since
January 1994. From 1992 to 1997 Mr. Fish served as Managing Director of Magen
Central Pension Fund Ltd. Mr. Fish served as a financial advisor to Shalev
Transportation Cooperative Ltd. from 1990 to 1994. Mr. Fish served as general
comptroller of Egged Ltd. from 1977 to 1990. Mr. Fish received his B.Sc. in
economics from Bar-llan University in Tel Aviv.
YAEL ROSENBERG, 33, has served as a director of the Company since
December 1999 and has served as a director of TAT Industries since November
1996. Mr. Rosenberg served as a director of T.V.G. Technologies from November
1998 through May 1999. Ms. Rosenberg is the daughter of Shlomo Ostersetzer, who
is Chairman of the Board of the Company and TAT Industries. She is employed as a
lawyer for the law offices of Meitar, Liquornik, Geva & Co. Ms. Rosenberg
received her B.A. in law at the Administration and Management College.
LIOR ZEELIM, 34, has served as a director of the Company since
December 1999. Mr. Zeelim is the son of Dov Zeelim, Vice Chairman of the Board
of the Company and TAT Industries and President of TAT Industries. Mr. Zeelim is
a registered stock broker.
INFORMATION REGARDING THE BOARDAnnex A.
APPROVAL OF DIRECTORS All directors hold office until the next annual meeting of
shareholders and the election and qualification of their successors. Officers
are elected by the Board ofAND OFFICERS LIABILITY INSURANCE
The Company shall purchase a Directors and serve at the discretionOfficers Liability Insurance Policy
to cover liability of the Board.
up to US$ 5,000,000. The Board of Directors haswill be
authorized an Audit Committee. Approval byto renew the Audit Committee and the Board is required for such matters as: (i) certain
transactions to which the Company intends to bePolicy during a party and in which an Office
Holder or certain other parties (including affiliatesperiod of the Company or Office
Holder) have a direct or indirect personal interest, (ii) actions or
arrangements which could otherwise be deemed to constitute a breach of fiduciary
duty or the duty of care of an Office Holderseven years provided its cost
to the Company (iii) arrangements
with directors aswill not be increased more than 25% per year.
DIRECTORS AND OFFICERS EXEMPTION AND INDEMNIFICATION UNDERTAKING
The Company shall issue letters of undertaking to the term of their services, (iv) indemnification of Office
Holder to the Company, (v) certain transactions defined in the Companies
Ordinance as extraordinary transactions (a transaction which is not in the
ordinary course of business or is not at market conditions, or a transaction
which is likely to have a material impact on the profitability, property or
obligations of the Company). Arrangements with directors regarding their service
and in certain circumstances, the other matters enumerated above, may also
require shareholder approval.
The Audit Committee of the Company is comprised of: Dov Zeelim, Moshe
Tachnai, Meir Dvir and Yaacov Fish.
The Company has adopted a formal written Audit Committee Charter
which is reviewed and reassessed annually.
There are no family relationships among any of our officers or
directors, except for Dov Zeelim and Lior Zeelim who are father and son,
respectively.
EXECUTIVE COMPENSATION
During 2001, the Company paid its officers and directors compensation
in the aggregate amount of $1,379,280 and the Company anticipates that the
aggregate compensation paid to its officers and directors during 2002 will be
approximately $1,300,000. The foregoing includes amounts set aside for or
accrued to provide pension, retirement or similar benefits but does not include
amounts expended by the Company for automobiles made available to its officers,
expenses (including business travel, professional and business association dues
and expenses) reimbursed to officers and other benefits commonly reimbursed and
paid for by companies in Israel.
EMPLOYEE'S NAME SALARIES & SOCIAL BONUS OPTION PLAN REALIZATION PLAN
BENEFITS
--------------- ----------------- ----- ----------- ----------------
Shlomo Ostersetzer $254,092 $60,700 250,000 -- 125,000 125,000
Dov Zeelim $273,705 $60,700 350,000 50,000 125,000 175,000
Israel Ofen $198,471 $24,030 205,000 37,500 65,000 102,500
Jacob Danan $156,006 $24,743 40,750 2,000 13,750 25,000
Shraga Katz $125,199 $16,634 27,000 2,000 5,000 20,000
Shaul Menachem $165,000 $20,000 10,000 -- -- 10,000
STOCK OPTION PLANS
In June 1994, the Board of Directors of the Company adopted a share
option plan (the "1994 Plan"), pursuant to which 250,0001 Ordinary Shares have
been reserved for issuance upon the exercise of options granted under the 1994
Plan. All options granted under the 1994 Plan are granted on the condition that
the grantee remains employed by the Company for at least five years from the
date of grant as an employee, officer or consultant and are granted on a pro
rata basis during that period. In June 1994, the Board of Directors approved the
granting of options under the 1994 Plan at an exercise price of $2.00 per share
as follows: Israel Ofen: 75,0001; Dov Zeelim: 100,0001; and an aggregate of
75,0001 to other directors, employees of the Company and service renderers. In
September, 1994 the Company's shareholders approved the 1994 Plan and the
granting of the foregoing options.
In March 1995, the Board of Directors of the Company adopted a share
option plan (the "1995 Plan"), and approved by the Company's shareholders in
August 1995 pursuant to which 800,0001 Ordinary Shares have been reserved for
issuance upon the exercise of options granted under the 1995 Plan. In June 1995,
the Board of Directors approved the granting of options under the 1995 Plan at
an exercise price of $2.25 per share as follows: Shlomo Ostersetzer: 250,0001;
Dov Zeelim: 250,0001; Israel Ofen: 130,0001; and an aggregate of 170,0001 to
other employees and services providers of the Company.
In January 1999, the Board of Directors adopted a new share option
plan ("1999 Plan") for which 500,000 Ordinary Shares have been reserved and
granted at an exercise price of $1.625 per share as follows: Shlomo Ostersetzer:
125,000; Dov Zeelim: 175,000; Israel Ofen: 102,500 and an aggregate of 97,500 to
other employees and directors.
During the fiscal year ended December 31, 2001, no options were
granted to any officers of
the Company listed inwhich shall include an exemption of liability and obligation to
indemnify the executive compensation
table abovedirectors and no options were exercised by anyofficers of the executive officers
listed inCompany up to the executive compensation table above.
- --------
(1) These numbers are historically accurate; however,higher of
US$5,000,000 or 25% of the Reverse Split hasCompany's equity capital (net worth) according to the
effectlatest financial statements of halving the numberCompany.
EXECUTIVE COMPENSATION
Incorporated by Reference from the Company's Form 20-F for the year
Ended December 31, 2003 as filed with the U.S. Securities and Exchange
Commission on June ___, 2004, a copy of shares available or granted underwhich is attached hereto.
STOCK OPTION PLANS
Incorporated by Reference from the planCompany's Form 20-F for the year
Ended December 31, 2003 as filed with the U.S. Securities and doubling the exercise price.
Exchange
Commission on June ___, 2004, a copy of which is attached hereto.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated by reference from the Company's Form 20-F for the year
ended December 31, 2003, as filed with the U.S. Securities and Exchange
Commission on June ___, 2004, a copy of which is attached hereto.
7
DESCRIPTION OF SECURITIES
Incorporated by reference from the Company's Form 20-F for the year
ended December 31, 2003, as filed with the U.S. Securities and Exchange
Commission on June ___, 2004, a copy of which is attached hereto.
FINANCIAL STATEMENTS
Incorporated by Reference. The following table sets forthCompany's audited financial statements
for the year ended December 31, 2003 and the related Management's Discussion and
Analysis of Financial Condition and Results of Operations are included in the
Company's Form 20-F, as filed with the U.S. Securities and Exchange Commission
on June ___, 2004, a copy of November 14, 2002which is attached hereto.
BOARD RECOMMENDATION
PROPOSAL 1
1. To approve the numberShare Purchase Agreement between the Company and
TA-T.O.P. Limited Partnership (the "Investor") pursuant to which the Company
will sell to the Investor an aggregate of 857,143 Ordinary Shares owned beneficially by: (i) each officerof its capital
stock and director and any
person knownissue warrants to the CompanyInvestor to beneficially own more than 10%purchase an additional 50,000
Ordinary Shares, and to approve all other Transaction Documents and, subject to
the completion of the Ordinary
Shares;transaction, to appoint Mr. Ishai Davidi, Mr. Gillon Beck
and (ii) all officers and directorsMr. Yechiel Gootman as members of the Company as a group.
Number of Ordinary Percent of
Name and Address Shares Owned Ordinary Shares
- ---------------- ------------ ---------------
TAT Industries(1) 3,124,521 69.8%
Shlomo Ostersetzer(1)(2) 325,437(3)(4) 5.72%
Dov Zeelim(1)(2) 390,587(3)(4) 6.86%
Israel Ofen(1)(2) 227,492(4) 4.0%
Dvir Meir 7,500 0.13%
Fish Yaakov 7,500 0.13%
Tachnai Moshe 7,500 0.13%
(1) TAT Industries and each of Messrs. Ostersetzer, Zeelim and Ofen has an
address at P.O. Box 80, Gedera, Israel 70750.
(2) Represents all shares that may be acquired within the next 60 days.
(3) Such number does not include shares beneficially held by TAT Industries.
Mr. Shlomo Ostersetzer, Chairman of the Board of Directors and Chief
Executive Officer of the Company, is the Chairman of the Board of TAT
Industries and owns approximately 43.63% of the equity rights and the
voting rights in TAT Industries as of June 15, 2002. Mr. Dov Zeelim,
President and Vice Chairman of the Board of Directors of the Company, is
the Vice Chairman of TAT Industries and owns approximately 22% of the
equity rights and the voting rights in TAT Industries as of June 15,
2002.
(4) Includes Ordinary Shares that the following persons have the right to
acquire upon the exercise of stock options: Shlomo Ostersetzer, 250,000
Ordinary Shares; Dov Zeelim, 350,000 Ordinary Shares; and Israel Ofen,
205,000 Ordinary Shares.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR:
SHLOMO OSTERSETZER, DOV ZEELIM, ISRAEL OFEN, MOSHE TACHNAI, DR. MEIR DVIR,
YAACOV FISH, YAEL ROSENBERG AND LIOR ZEELIM, TO SERVE US DIRECTORS SUBJECT TO
THE PROVISIONS OF THE COMPANY'S ARTICLES OF ASSOCIATION.
PROPOSAL NO. 2 REAPPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has proposed that the firm of Kost, Forer and
Gabbay be reappointed as independent auditors for the fiscal year ending
December 31, 2002. As has been the Company's prior practice, the Board of Directors are to be authorized to fix the remuneration of the auditors in
accordance withCompany;
PROPOSAL 2
2. To approve an amendment to the extentemployment agreement by and naturebetween
the Company and Shlomo Ostersetzer;
PROPOSAL 3
3. To approve an amendment to the employment agreement by and between
the Company and Dov Zeelim;
PROPOSAL 4
4. To approve the employment agreement by and between the Company and
Yossi Rosenberg;
PROPOSAL 5
5. To approve the employment agreement by and between Limco Airepair
Inc. and Eran Frenkel and the employment agreement by and between the Company
and Eran Frenkel;
PROPOSAL 6
6. To approve an Amendment of their services. A representative of
Kost, Forer and Gabbay will attend the meeting and will have an opportunity to
make a statement if he or she desires and respond to appropriate questions.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
REAPPOINTMENT OF THE INDEPENDENT AUDITORS.
PROPOSAL NO. 3 ADOPTION OF AMENDMENTS TO THE COMPANY'S
ARTICLES OF ASSOCIATION
The Board of Directors has proposed that the ArticlesArticle of Association of the
Company be amended so thatCompany;
PROPOSAL 7
7. To approve the Company's Boardpurchase of Directors shall have
the right to declare and pay dividends to the Company's shareholders, without
shareholder approval at an annual general meeting. The Board of Directors
believes that these amendments would provide greater flexibility to the Board of
Directors in taking action to benefit all of the Company's shareholders.
As amended Article 95 of the Articles of Association will be amended
to read as follows:
"The Company's Board of Directors, subject to any restrictions
contained in the Company's Ordinance, may declareOfficers' liability
insurance policy.
8
PROPOSAL 8
8. To approve a directors and pay dividends, either in
the form of cash or stock, to its shareholders according to their rightsofficers exemption and interests in the profits and may fix the time for payment."
As amended Article 100 of the Articles of Association will be amended
to read as follows:
"Upon declarationindemnification
undertaking by the Board of Directors, a dividend may be paid,
wholly or partly, by the distribution of specific assets of the Company or by
distribution of paid up shares, debentures or debenture stock or any other
securities of the Company or of any other companies or in any one or more of
such ways."
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
AMENDMENTS TO THE COMPANY'S BY-LAWS.
PROPOSAL NO. 4 RECEIVING THE AUDITOR'S REPORT,
FINANCIAL STATEMENTS AND DIRECTORS' REPORT
The Company will distribute at the Annual Meeting an Annual Report
containing the auditor's report, the Company's financial statements and the
directors' report on the Company for the fiscal year ended December 31, 2001.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
RECEIPT OF THE (i) THE AUDITOR'S REPORT, (ii) THE COMPANY'S FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001, and (iii) THE DIRECTORS' REPORT ON
THE COMPANY.Company.
****************************
VOTE REQUIRED
Proposals 1, 2, 3 and 4All proposals to be considered at the AnnualSpecial Meeting, excluding
proposal 6, require the affirmative vote of athe majority of shareholders present
in person or by proxy and entitled to vote thereon; proposal 6 requires the
Ordinary Sharesaffirmative vote of 75% of shareholders present in person or by proxy and
entitled to vote thereon; in addition, approval of all the proposals should
include one of the following: (1) the affirmative vote of no less than one-third
of the votes of the non-controlling shareholders represented at the Annual Meeting andmeeting, OR
(2) that the total votes of non-interested shareholders voting thereon.against the
resolution are not in excess of one percent of the Company's voting rights. THE
BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED, AND RECOMMENDS A
VOTE FOR APPROVAL OF EACH OF THE FOREGOING PROPOSALS.
PROPOSALS OF SHAREHOLDERS
A shareholder proposal requested to be presented at the Company's
next Annual Meeting of Shareholders must be received by the Company at its
principal executive offices, TAT Technologies Ltd., P.O. Box 80, Gedera 70750,
Israel, no later than August 31, 2003.2004. The Board of Directors will review any
shareholder proposal received in accordance herewith and will determine whether
such proposal is appropriate and satisfies the applicable requirements for
inclusion in the Company's proxy statement for its next Annual Meeting of
Shareholders.
OTHER MATTERS
The Board of Directors does not know of any other business, which is
subject for action by the shareholders at the AnnualSpecial Meeting. However, if any
such matter should properly come before the AnnualSpecial Meeting, the persons named
in the enclosed proxy intend to vote such proxy in accordance with their
judgment.
Copies of the Company's Annual Report on Form 20-F and the notice of
annual meeting of shareholders, proxy statement and proxies, are available upon
written request, without cost, from the Company's principal executive offices at
TAT Technologies Ltd., P.O. Box 80, Gedera 70750 (Attention: Avi Kahana).
Shareholders are urged to complete, sign, date and return the enclosed
proxy promptly in the envelope provided, regardless of whether or not they
expect to attend the AnnualSpecial Meeting. The prompt return of such proxy or
proxies, as the case may be, will assist the Company in preparing for the
AnnualSpecial Meeting. Your cooperation is greatly appreciated.
Dated: November __, 2002, 2004
By Order of the Board of Directors
/s/ Avi Kahana
Avi Kahana, Secretary
TAT TECHNOLOGIES LTD.
ANNUAL MEETING OF SHAREHOLDERS--DECEMBER 26, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Avi Kahana, with full power of substitution,
proxy to vote all of the Ordinary shares of the undersigned and with all of the
powers the undersigned would possess if personally present, at the Annual
Meeting of Shareholders of TAT Technologies, Inc., to be held at the Company's
principal executive offices located at Industrial Zone, Yasour, Israel, on
December 26, 2002 at 2:00 p.m. Israel time and at all adjournments thereof, upon
the matters specified below, all as more fully described in the Proxy Statement
dated November __, 2002 and with the discretionary powers upon all other matters
which come before the meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF TAT TECHNOLOGIES, LTD.'S BOARD OF
DIRECTORS.
1. To elect eight directors to serve until the Company's next Annual Meeting
of Shareholders.
- SHLOMO OSTERSETZER - DOV ZEELIM - ISRAEL OFEN
- MOSHE TACHNAI - DR. MEIR DVIR - YAACOV FISH
- YAEL ROSENBERG - LIOR ZEELIM
|_| FOR ALL NOMINEES |_| WITHHELD FOR ALL NOMINEES
INSTRUCTION: To withhold authority to vote for any individual, write that
nominee's name in the space provided below:
__________________________________________________________
2. To ratify the appointment Kost, Forer and Gabbay as the Company's
independent accountants for the ensuing year.
|_| FOR |_| AGAINST |_| ABSTAIN
3. To ratify an amendment to the Company's Articles of Association to allow
the Company's Board of Directors to declare and pay dividends without
shareholder approval at an annual general meeting of shareholders.
|_| FOR |_| AGAINST |_| ABSTAIN
4. To receive and accept the auditor's report, the Company's financial
statements and the directors' report on the Company for the fiscal year
ended December 31, 2001.
|_| FOR |_| AGAINST |_| ABSTAIN
5. In their discretion, upon such other matter or matters that may properly
come before the meeting, or any adjournments thereof.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
(CONTINUED FROM OTHER SIDE)
Every properly signed proxy will be voted in accordance with the specifications
made thereon. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSALS
1, 2, 3 and 4.
The undersigned hereby acknowledges receipt of a copy of the accompanying Notice
of Meeting and Proxy Statement and hereby revokes any proxy or proxies
heretofore given.
Please mark, date, sign and mail your proxy promptly in the envelope provided.
Date: , 2002
-----------------------------------
(Print name of Shareholder)
(Print name of Shareholder)
Signature
Signature
NUMBER OF SHARES
Note: Please sign exactly as name appears
in the Company's records. Joint
owners should each sign. When
signing as attorney, executor or
trustee, please give title as such.
PLEASE MARK, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.