SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
CORPORATION NAME
TAT TECHNOLOGIES LTD.
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(Name of Registrant as Specified In Its Charter)
CORPORATION NAME
TAT TECHNOLOGIES LTD.
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11(set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
TAT TECHNOLOGIES LTD.
P.O. BOX 80
GEDERA 70750, ISRAEL
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON , 2004
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Special Meeting") of TAT Technologies Ltd. (the "Company") will be held on ,
2004 at 2:00 P.M. Israel time, at the Company's executive offices in Park Re'em
Industrial Zone, Bnei Ayish, Israel, to consider and act upon the following
matters:
PROPOSAL 1
1. To approve the Share Purchase Agreement between the Company and
T.O.P. Limited Partnership (the "Investor") pursuant to which 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 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. and to approve all other documents related to the
Transaction 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;;
PROPOSAL 2
2. To approve an amendment to the employment agreement by and between
the Company and Shlomo Ostersetzer;
PROPOSAL 3
3. To approve an amendment to the employment agreement by and between
the Company and Dov Zeelim; and
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 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 business as may properly come before the
Special Meeting and any continuations and adjournments thereof.
A shareholder who wishes to vote at the Special Meeting by proxy must
deliver a proxy to the offices of the Company no later than 48 hours before the
time appointed for the Special Meeting or any adjournment thereof.
A quorum required for the Special Meeting consists of at least two
shareholders present in person or by proxy, holding or representing at least
50.1% of the total voting rights of the Company. If, within half an hour after
the time appointed for the holding of the Special Meeting, a quorum is not
present, the Special 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 Special Meeting.
The Board of Directors has fixed the close of business on ,2004 (the
"Record Date"), as the record date for the determination of the shareholders
entitled to notice of and to vote at the Special 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
June , 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 _____, 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 Special Meeting of
Shareholders (the "Special Meeting") to be held on _____, 2004, and at any
adjournments thereof for the purposes set forth in the accompanying Notice of
Special Meeting of Shareholders.
Any proxy given pursuant to such solicitation and received prior to the
Special Meeting will be voted as specified in such proxy. If no instructions are
given, proxies will be voted for the Proposals recommended by the Company's
Board of 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 Special Meeting and voting in person.
VOTING AT THE MEETING
The Board of Directors has fixed the close of business on , 2004 (the
"Record Date"), as the record date for the determination of the shareholders
entitled to notice of and to vote at the Special 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 4,688,516 Ordinary Shares
outstanding. Each Ordinary Share entitles the holder thereof to one vote on all
of the proposals to be voted on at the Special Meeting.
The quorum required for the Special Meeting consists of at least two
shareholders present in person or by proxy, holding or representing at least
50.1% of the total voting rights of the Company. If the Special 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
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PROPOSAL NO. 1 APPROVAL OF ISSUANCE 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.
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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 sold 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 June 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 an 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.
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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.
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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 Israeli
Companies Law; A copy of the proposed resolutions amending the Articles of
Association of the Company is attached as Annex A.
APPROVAL OF DIRECTORS AND OFFICERS LIABILITY INSURANCE
The Company shall purchase a Directors and Officers Liability Insurance Policy
to cover liability of up to US$ 5,000,000. The Board of Directors will be
authorized to renew the Policy during a period of seven years provided its cost
to the Company will not be increased more than 25% per year.
DIRECTORS AND OFFICERS EXEMPTION AND INDEMNIFICATION UNDERTAKING
The Company shall issue letters of undertaking to the directors and officers of
the Company which shall include an exemption of liability and obligation to
indemnify the directors and officers of the Company up to the higher of
US$5,000,000 or 25% of the Company's equity capital (net worth) according to the
latest financial statements of the Company.
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 which is attached hereto.
STOCK OPTION PLANS
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.
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.
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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 Company'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 which is attached hereto.
BOARD RECOMMENDATION
PROPOSAL 1
1. To approve the Share 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 of its capital
stock and issue warrants to the Investor to purchase an additional 50,000
Ordinary Shares, and to approve all other Transaction Documents and, subject to
the completion of the transaction, to appoint Mr. Ishai Davidi, Mr. Gillon Beck
and Mr. Yechiel Gootman as members of the Board of Directors of the Company;
PROPOSAL 2
2. To approve an amendment to the employment agreement by and between
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 the Article of Association of the
Company;
PROPOSAL 7
7. To approve the purchase of Directors and Officers' liability
insurance policy.
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PROPOSAL 8
8. To approve a directors and officers exemption and indemnification
undertaking by the Company.
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VOTE REQUIRED
All proposals to be considered 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, 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 meeting, OR
(2) that 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
BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED, AND RECOMMENDS A
VOTE FOR APPROVAL 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, 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 Special Meeting. However, if any
such matter should properly come before the Special Meeting, the persons named
in the enclosed proxy intend to vote such proxy in accordance with their
judgment.
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 Special Meeting. The prompt return of such proxy or
proxies, as the case may be, will assist the Company in preparing for the
Special Meeting. Your cooperation is greatly appreciated.
Dated: , 2004
By Order of the Board of Directors
/s/ Avi Kahana
Avi Kahana, Secretary