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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[x] 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 July 29, 2004
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Special Meeting") of TAT Technologies Ltd. (the "Company") will be held on July
29, 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.
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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.
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 July 9, 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
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Avi Kahana, Secretary
Gedera, Israel
July 14, 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.
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TAT TECHNOLOGIES LTD.
PROXY STATEMENT
INTRODUCTION
This Proxy Statement and enclosed form of proxy are being furnished
commencing, on or about July 14, 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 July 29, 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 July 9, 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
During 2003, the Company paid its officers and directors compensation
in the aggregate amount of $2,053,088. 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 & BONUS TERMINATION OPTION PLAN REALIZATION PLAN
SOCIAL BENEFITS BENEFIT
Total 1994 Plan 1995 Plan 1999 Plan
Options
Shlomo Ostersetzer (1) $246,625 $118,707 12 Months 250,000 -- 125,000 125,000
Advance
notice
Dov Zeelim (1) $247,637 $118,707 12 Months 350,000 50,000 125,000 175,000
Advance
notice
Israel Ofen (1) $331,981(3) $ 26,271 12 Months 142,635 10,135 34,500 98,000
Advance
notice
Jacob Danan (1) $172,748(3) $ 47,241 12 Months -- -- -- --
Advance
notice
Shraga Katz (1) $171,854(3) -- 12 Months 10,000 -- -- 10,000
Advance
notice
Shaul Menachem (2) $240,538(3) $ 60,000 12 Months -- -- -- --
Advance
notice
Eran Frenkel $ 90,000 -- 6 Months -- -- -- --
Advance
notice
Yossi Rozenberg $ 99,336 $ 3,311 6 Months -- -- -- --
Advance
notice
Avi Kahana $ 42,107 $ 1,325 -- -- -- --
Moshe Tachnai $ 7,147 -- 7,500 2,500 -- 5,000
Meir Dvir $ 7,248 -- 7,500 2,500 -- 5,000
Yaakov Fish $ 6,959 -- 7,500 2,500 -- 5,000
Yael Rozenberg $ 6,673 -- -- -- -- --
Lior Zeelim $ 6,673 -- -- -- --
<FN>
(1) 12 months advance notice for both sides
(2) 12 months advance notice with commitment of 1 year employment in Israel
(3) Including wages received from exercising options and their sale in 2003.
</FN>
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STOCK OPTION PLANS
In June 1994, the Board of Directors of the Company adopted a share
option plan (the "1994 Plan"), pursuant to which 125,000 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 $4.00 per share
as follows: Israel Ofen: 37,500; Dov Zeelim: 50,000; and an aggregate of 37,500
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. As of the date hereof there were 71,135
options outstanding pursuant to the 1994 Plan.
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 400,000 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 $4.50 per share as follows: Shlomo Ostersetzer: 125,000;
Dov Zeelim: 125,000; Israel Ofen: 65,000; and an aggregate of 85,000 to other
employees and services renderers of the Company. As of the date hereof there
were 302,000 options outstanding pursuant to the 1995 Plan.
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. As of the date hereof there were 425,500 options
outstanding pursuant to the 1999 Plan.
As of date hereof no options were granted to any officers of the
Company listed in the executive compensation table above and 130,115 option were
exercised by the executive officers listed in the executive compensation table
above.
SHARE OWNERSHIP
The following table sets forth as of July 8, 2004 the number of
Ordinary Shares, nominal value NIS 0.90 per share, of the Company (the "Ordinary
Shares") owned beneficially by all officers and directors of the Company .
Number of Ordinary Percent of
Name and Address Shares Owned Ordinary Shares
TAT Industries(1) 3,113,409 66.76%
Shlomo Ostersetzer(1)(2) 325,738(3)(4) 5.94%
Dov Zeelim(1)(2) 360,087(3)(4) 6.50%
Israel Ofen(2) 142,635(4) 2.60%
Dvir Meir (2) 7,500(4) 0.13%
Fish Yaakov (2) 7,500(4) 0.13%
Tachnai Moshe (2) 7,500(4) 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) On a fully diluted basis.
(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 41.59% of the equity
rights and the voting rights in TAT Industries as of June 15, 2004. 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 20.99% of the equity rights and the voting rights in TAT
Industries as of May 15, 2004
(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,
142,635 Ordinary Shares.
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DESCRIPTION OF SECURITIES
The Ordinary Shares
The Company has 20,000,000 authorized Ordinary Shares, NIS 0.15 par value, with
4,688,516 of such shares outstanding as of the date of this proxy statement. All
issued and outstanding Shares of the Company are, validly issued, fully paid,
and non-assessable. Shares do not have preemptive rights. Neither the Memorandum
of Association nor the Articles of Association of the Company nor the laws of
the State of Israel restrict in any way the ownership or voting of Shares by
nonresidents, except with respect to subjects of countries, which are in a state
of war with Israel.
Dividend and Liquidation Rights
The Shares are entitled to the full amount of any cash or share dividend, if
declared.
Subject to the rights of the holders of Shares with preferential or special
rights, which may be authorized in the future, holders of Shares are entitled to
receive dividends pro rata temporis out of assets legally available therefore
and, in the event of the winding up of the Company, to share ratably in all
assets remaining after payment of liabilities. Directors may declare interim
dividends and recommend a final annual dividend out of retained earnings
available for cash dividends, as determined for statutory purposes, at such
times and in such amounts as it may determine. Declaration of the final dividend
requires shareholder approval, which may reduce but not increase such dividend
from the amount proposed by the Board.
In case of a stock dividend, holders of each class of shares can receive shares
of one class, whether such class existed prior thereto or was created therefore,
or shares of the same class, which conferred upon the holder the right to
receive such dividend.
Voting, Shareholders' Meetings and Resolutions
Holders of Shares have one vote for each share held on all matters submitted to
a vote of shareholders subject to any special voting rights, which, may be
contained in any class of shares with preferential rights, which may be
authorized in the future. The quorum required for a meeting of shareholders
consists of at lease two shareholders present in person or by proxy and holding
or representing one third of the voting rights of the Company. A meeting
adjourned for lack of a quorum, which, may be so adjourned after half an hour
from the time appointed for such meeting, is adjourned to the same day in the
next week at the same time and place or any time and place as the directors
designate in a notice to the shareholders. If at such reconvened 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 regardless of the number of shares represented.
An ordinary resolution (such as resolutions for the election of directors, the
declaration of dividends and the appointment of auditors) requires approval by
the holders of a majority of the shares represented at the meeting in person or
by proxy and voting thereon. A special or extraordinary resolution (such as
resolutions amending the Memorandum or Articles of Association and regarding
changes in capitalization, mergers, consolidations, winding up,
authorizing a class of shares with special rights and other changes as specified
in the Israeli Companies Ordinance (New Version, 1983) requires approval of the
holders of 75% of the shares represented at the meeting and voting thereon.
Transfer of Shares and Notices
Fully paid up shares are issued in registered form and may be transferred
freely. Each shareholder of record is entitled to receive notice of
shareholders' meetings together with notice by publication in two Israeli
newspapers.
Modification of Class Rights
Shares with preferential rights or other special rights relating to, among other
things, dividends, voting and liquidation preferences can be created only by
adoption by the shareholders of a special resolution. The Company has no present
plans to propose shares with preferential rights.
The rights attached to any class (unless otherwise provided by the
terms of issue of such class) may be varied with the consent in writing of the
holders of all the issued shares of that class or with the adoption of a special
resolution passed at a separate general meeting of the holders of the shares of
such class.
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Election of Directors
The shares do not have cumulative voting rights in the election of
directors. Thus, the holders of Shares conferring more than 50% of the voting
power have the power to elect all of the directors, to the exclusion of the
remaining shareholders.
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 24, 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: July 12, 2004
By Order of the Board of Directors
/s/ Avi Kahana
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Avi Kahana, Secretary
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