SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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F O R M 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF JULY 2008
TAT TECHNOLOGIES LTD.
(Name of Registrant)
P.O.BOX 80, Gedera 70750 Israel
(Address of Principal Executive Office)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT FILES OR WILL FILE ANNUAL
REPORTS UNDER COVER OF FORM 20-F OR FORM 40-F.
FORM 20-F [X] FORM 40-F [_]
INDICATE BY CHECK MARK IF THE REGISTRANT IS SUBMITTING THE FORM 6-K IN
PAPER AS PERMITTED BY REGULATION S-T RULE 101(B)(1): [_]
INDICATE BY CHECK MARK IF THE REGISTRANT IS SUBMITTING THE FORM 6-K IN
PAPER AS PERMITTED BY REGULATION S-T RULE 101(B)(7): [_]
INDICATE BY CHECK MARK WHETHER BY FURNISHING THE INFORMATION CONTAINED IN
THIS FORM, THE REGISTRANT IS ALSO THEREBY FURNISHING THE INFORMATION TO THE
COMMISSION PURSUANT TO RULE 12G3-2(B) UNDER THE SECURITIES EXCHANGE ACT OF 1934.
YES [_] NO [X]
IF "YES" IS MARKED, INDICATE BELOW THE FILE NUMBER ASSIGNED TO THE
REGISTRANT IN CONNECTION WITH RULE 12G3-2(B): 82- ____________
TAT Technologies Ltd.
6-K Items
1. Notice of and Proxy Statement for TAT Technologies Ltd. Annual General
Meeting to be held August 18, 2008 mailed July 14, 2008.
2. Form of TAT Technologies Ltd. Proxy Card.
ITEM 1
TAT TECHNOLOGIES LTD.
P.O. Box 80
Gedera 70750, Israel
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NOTICE OF 2008 ANNUAL GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders of TAT Technologies Ltd.:
We are pleased to invite you to the 2008 Annual General Meeting of
Shareholders to be held on Monday, August 18, 2008 at 10:00 a.m. Israel time, at
the offices of KMN Holdings Ltd., 85 Medinat Hayehudim St., 14th floor, Business
Park, Herzlia Pituach 46140, Israel, for the following purposes:
(1) To elect each of Mr. Giora Inbar, Mr. Avraham Ortal, Mr. Eran Saar and
Ms. Daniela Yaron-Zoller to serve as a director, to hold office until
our 2009 Annual General Meeting of Shareholders and until their
successors are elected and qualified;
(2) To elect Mr. Avraham Shani to serve as an outside director for an
initial three-year term expiring at our 2011 Annual General Meeting of
Shareholders;
(3) To approve an agreement by and between us and TAT Industries for the
purchase of 15% of the outstanding ordinary shares of Bental
Industries Ltd. from TAT Industries Ltd;
(4) To ratify and approve the reappointment of Baker Tilly Oren Horowitz &
Co., C.P.A., members of Baker Tilly International, as our independent
registered public accountants for the year ending December 31, 2008
and to authorize our Board of Directors to delegate to our Audit
Committee the authority to determine their remuneration in accordance
with the volume and nature of their services; and
(5) To review and discuss our auditor's report and consolidated financial
statements for the year ended December 31, 2007.
The Board of Directors recommends that you vote in favor of all of the
items, which are described in the attached Proxy Statement.
Shareholders of record at the close of business on July 9, 2008 are
entitled to notice of and to vote at the Meeting. You can vote by proxy
either by mail or in person. If voting by mail, the proxy must be received
by our transfer agent or at our registered office in Israel at least
forty-eight (48) hours prior to the appointed time of the Meeting to be
validly included in the tally of ordinary shares voted at the Annual
General Meeting. Detailed proxy voting instructions are provided both in
the Proxy Statement and on the enclosed proxy card.
By Order of the Board of Directors
Aya Ben David,
Secretary
July 11, 2008
TAT TECHNOLOGIES LTD.
P.O. Box 80
Gedera 70750, Israel
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PROXY STATEMENT
NOTICE OF 2008 ANNUAL GENERAL MEETING OF SHAREHOLDERS
This proxy statement is being furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of TAT Technologies Ltd., an
Israeli corporation, to be voted at the Annual General Meeting of Shareholders,
or the Meeting, to be held on Monday, August 18 at 10:00 a.m. Israel time, at
the offices of KMN Holdings Ltd., 85 Medinat Hayehudim St., 14th floor, Business
Park, Herzlia Pituach 46140, Israel, and any adjournments thereof.
This Proxy Statement, the attached Notice of 2008 Annual General Meeting
and the enclosed proxy card are being mailed to shareholders on or about July
14, 2008.
PURPOSE OF THE ANNUAL GENERAL MEETING
At the Meeting, shareholders will be asked to vote upon the following
matters: (i) election of four directors for terms expiring at our 2009 Annual
General Meeting of Shareholders.; (ii) election of one outside director for an
initial three-year term expiring at our 2011 Annual General Meeting of
Shareholders; (iii) approval of an agreement by and between us and TAT
Industries for the purchase of 15% of the outstanding ordinary shares of Bental
Industries Ltd. from TAT Industries; and (iv) ratification and approval of the
reappointment of Baker Tilly Oren Horowitz & Co., C.P.A., members of Baker Tilly
International, as our independent registered public accountants for the year
ending December 31, 2008 and to authorize our Board of Directors to delegate to
our Audit Committee the authority to determine their remuneration in accordance
with the volume and nature of their services. In addition, our auditor's report
and consolidated financial statements for the year ended December 31, 2007 will
be reviewed and discussed at the Meeting.
We are not aware of any other matters that will come before the Meeting. If
any other matters properly come before the Meeting, the persons designated as
proxies intend to vote on such matters in accordance with the judgment of the
Board of Directors.
PROXY PROCEDURE
Only holders of record of our ordinary shares, par value of NIS 0.9 per
share, as of the close of business on July 9, 2008, are entitled to notice of,
and to vote in person or by proxy, at the Meeting.
Shares eligible to be voted and for which a proxy card is properly signed
and returned and actually received by our transfer agent or at our registered
office in Israel at least forty-eight (48) hours prior to the beginning of the
Meeting will be voted as directed. If directions are not given or directions are
not in accordance with the options listed on a signed and returned proxy card,
such shares will be voted FOR the nominees for directors and FOR each proposal
for which the Board of Directors recommends a vote FOR. Unsigned or unreturned
proxies, including those not returned by banks, brokers, or other record
holders, will not be counted for quorum or voting purposes.
We will bear the cost of soliciting proxies from our shareholders. Proxies
will be solicited by mail and may also be solicited personally or by telephone
by our directors, officers and employees. We will reimburse brokerage houses and
other custodians, nominees and fiduciaries for their expenses in accordance with
the regulations of the U.S. Securities and Exchange Commission concerning the
sending of proxies and proxy material to the beneficial owners of stock.
You may vote by submitting your proxy with voting instructions by mail if
you promptly complete, sign, date and return the accompanying proxy card in the
enclosed self-addressed envelope to our transfer agent or to our registered
office in Israel at least forty-eight (48) hours prior to the appointed time of
the Meeting. You may revoke your proxy at any time prior to the exercise of
authority granted in the proxy by giving a written notice of revocation to our
Corporate Secretary, by submitting a subsequently dated, validly executed proxy,
or by voting in person.
QUORUM AND VOTING
As of July 9, 2008, the record date for determination of shareholders
entitled to vote at the Meeting, there were outstanding 6,547,671 ordinary
shares. Each ordinary share entitles the holder to one vote.
The presence of two shareholders, holding at least one third (1/3) of our
issued share capital voting rights, represented in person or by proxy at the
Meeting, will constitute a quorum. An affirmative vote of the holders of a
majority of the ordinary shares represented at the Meeting, in person or by
proxy, entitled to vote and voting thereon, is required to approve the election
of the nominees for director and each of the proposals, except as otherwise
stated in the proposal.
ELECTION OF DIRECTORS
(ITEM 1 ON THE PROXY CARD)
Our articles of association provide for a Board of Directors consisting of
no less than two and no more than eleven members. Our Board of Directors is
currently composed of six directors, including two outside directors appointed
in accordance with the Israeli Companies Law (see Item 2 below regarding outside
directors). Our directors, other than our outside directors, are elected at each
annual meeting of shareholders. All the members of our Board of Directors
(except the outside directors) may be reelected upon completion of their term of
office.
In January 2008, following a change in the control of our company in
December 2007 eight new directors were elected by our Board of Directors,
including Mr. Giora Inbar, who was appointed as the Chairman of our Board of
Directors. At such time, the former Chairman of our Board of Directors, Mr.
Shlomo Ostersetzer, the former Vice Chairman of our Board of Directors and Chief
Executive Officer, Mr. Dov Zeelim, and five other directors resigned from our
Board of Directors. In June 2008, our Board of Directors determined to
streamline composition of our Board of Directors, and Messrs. Mordechai Bones,
Shimon Barkama, Meir Dvir, Amiram Eliasaf and Golan Kashi resigned from our
Board effective as of July 1, 2008.
At the Meeting, shareholders are being asked to elect the following current
directors, Messrs. Giora Inbar, Avraham Ortal and Eran Saar and Ms. Daniela
Yaron-Zoller, to hold office until our 2009 Annual General Meeting of
Shareholders and until their successors are elected and qualified. All of the
directors standing for election at the Meeting were elected to serve in such
capacity by our Board of Directors in January 2008.
Under the Israeli Companies Law the board of directors of a public company
is required to determine the minimum number of directors with ``accounting and
financial expertise'' who will serve on the board. Our Board of Directors
determined that at least two directors must have ``accounting and financial
expertise,'' as such term is defined by regulations promulgated under the
Israeli Companies Law.
We are a "controlled company" within the meaning of the NASDAQ Marketplace
Rules, since TAT Industries Ltd., or TAT Industries, holds more than 50% of our
voting power. As such, we are exempt from the NASDAQ Marketplace Rules
requirement that a majority of a company's Board of Directors must qualify as
independent directors within the meaning of the NASDAQ Marketplace Rules. We are
also exempt from the NASDAQ Marketplace Rules requirement regarding the process
for the nomination of directors; instead, we follow Israeli law and practice in
accordance with which directors are proposed by the Board of Directors and
elected by the shareholders, unless otherwise provided in a company's articles
of association. Our articles of association do not provide otherwise. Our
practice has been that our director nominees are presented in our proxy
statement for election at our annual meetings of shareholders.
Under the Israeli Companies Law, the affirmative vote of the holders of a
majority of the ordinary shares represented at the Meeting, in person or by
proxy, entitled to vote and voting thereon, is required to elect each of the
nominees named above. The vote for each of the nominees for director will be
separate.
Set forth below is information about each nominee, including age,
position(s) held with the company, principal occupation, business history and
other directorships held. There was no change in the information below with
respect to the four directors, from the information provided in our Annual
Report on Form 20-F filed with the Securities and Exchange Commission on June
30, 2008.
BRIGADIER GENERAL (RES.) GIORA INBAR (52) was elected as the Chairman of
our Board of Directors by our Board of Directors in January 2008. Brigadier
General (Res.) Inbar currently serves as the Chairman of the Board of Directors
of Isal Amlat, our controlling shareholder, and as the Chief Executive Officer
of KMN Holdings Ltd., the parent of Isal Amlat. Brigadier General (Res.) Inbar
also serves as Chairman of the Board of Directors of a number of companies in
the KMN Group, including our parent company TAT Industries and our majority
owned subsidiary Limco-Piedmont. Brigadier General (Res.) Inbar served as the
Division Commander of the Northern Command of the Israeli Defense Forces from
1995 through 1998. During the 25 years of his service, he also served as a
commander of special operations units. Brigadier General (Res.) Inbar holds a
B.A. degree and an M.B.A. degree in Business Administration from Haifa
University and is also a graduate of the U.S. Army War College.
DR. AVRAHAM ORTAL (41) was elected as a director by our Board of Directors
in January 2008. Since February 2008, Dr. Ortal has served as the Chief
Executive Officer of Mofet Holdings Ltd., an 80.38% subsidiary of KMN Holdings
Ltd., the parent of Isal Amlat, and as the Vice President of KMN Holdings Ltd.,
and is responsible for all of its international operations. Dr. Ortal also
serves on the Board of Directors of Mofet Holdings Ltd., our parent company TAT
Industries and our majority owned subsidiary Limco-Piedmont. From March 1999 to
January 2008, Dr. Ortal was a partner in the law firm of Zellermayer, Pelossof &
Co. of Tel Aviv, Israel. While at Zellermayer, Pelossof & Co., Dr. Ortal
specialized in international business and finance transactions. Prior to joining
Zellermayer, Pelossof & Co., Dr. Ortal was an associate at the New York law firm
Davis Polk & Wardell and was an Adjunct Lecturer (Mergers & Acquisitions) at the
Duke University School of Law. Dr. Ortal holds an LL.B. degree from the College
of Management, an L.L.M. degree from Duke University School of Law and an S.J.D.
degree from Duke University.
ERAN SAAR (35) was elected as a director by our Board of Directors in
January 2008. Since June 2006, Mr. Saar has served as the Chief Executive
Officer of Isal Amlat, our controlling shareholder, and as Chief Financial
Officer of KMN Holdings Ltd., the parent of Isal Amlat. Mr. Saar serves as a
member of the Board of Directors of seven companies in the KMN Group, including
our parent company TAT Industries. From 2005 to 2006, Mr. Saar served as the
deputy director of the corporate finance department of the Israeli Securities
Authority. Mr. Saar holds a B.A. degree in Law and Accounting and an M.B.A.
degree, both from the Hebrew University of Jerusalem.
DANIELA YARON-ZOLLER (42) was elected as a director by our Board of
Directors in January 2008 and is a member of our Audit Committee. Ms.
Yaron-Zoller currently serves as a director of the strategic customer division
of NESS Technologies Ltd. Ms. Yaron-Zoller also serves as a member of the Board
of Directors of several companies in the KMN Group, including our parent
company, TAT Industries, and of Mekorot Water Company Ltd. Ms. Yaron-Zoller
holds a B.A. degree in Law from the University of Tel Aviv.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
DIRECTOR NOMINEES NAMED HEREIN.
BENEFICIAL OWNERSHIP OF SECURITIES BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
None of our directors and executive officers beneficially owns more than 1%
of our outstanding shares.
As of July 9, 2008, one director held options to purchase an aggregate of
5,000 ordinary shares at an exercise price of $1.625 per share. Such options
have vested and will expire on January 19, 2009. The options were issued under
our 1999 Stock Purchase Plan.
Isal Amlat, a company organized under the laws of the State of Israel, is
the beneficial holder of 65.11% of our outstanding shares, of which 9.85% are
held directly by it and 55.26% are held directly by our parent company TAT
Industries. Accordingly, Isal Amlat ultimately controls our company.
The following table sets forth certain information as of July 9, 2008
regarding the beneficial ownership by all shareholders known to us to own
beneficially more than 5% of our outstanding ordinary shares.
Number of
Ordinary Shares
Beneficially Percentage of
Name Owned(1) Ownership(2)
-------------------------------------- --------- ---------
Isal Amlat Investments (1993) Ltd. (3) 4,263,508 65.11%
TAT Industries (4) 3,618,508 55.26%
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(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Ordinary shares relating
to options and warrants currently exercisable or exercisable within 60
days of the date of this table are deemed outstanding for computing
the percentage of the person holding such securities but are not
deemed outstanding for computing the percentage of any other person.
Except as indicated by footnote, and subject to community property
laws where applicable, the persons named in the table above have sole
voting and investment power with respect to all shares shown as
beneficially owned by them.
(2) The percentages shown are based on 6,547,671 ordinary shares issued
and outstanding as of July 9, 2008.
(3) Includes 645,000 ordinary shares held directly by Isal Amlat and
3,618,508 ordinary shares held directly by TAT Industries, which is
79,26% controlled by Isal Amlat. As such, Isal Amlat may be deemed to
be the beneficial owner of the aggregate 4,263,508 ordinary shares
held directly by itself and TAT Industries. Isal Amlat is 81.65%
controlled by KMN Holdings Ltd., an Israeli company publicly traded on
the Tel Aviv Stock, which is 59.95% controlled by Ron Elroy.
(4) TAT Industries is 79.26% controlled by Isal Amlat. As such, Isal Amlat
may be deemed to be the beneficial owner of the aggregate 3,618,508
ordinary shares held directly by TAT Industries. Isal Amlat is 81.65%
controlled by KMN Holdings Ltd., an Israeli company publicly traded on
the Tel Aviv Stock, which is 59.95% controlled by Ron Elroy.
AUDIT COMMITTEE
Under the Israeli Companies Law, the board of directors of any public
company must establish an audit committee. The audit committee must consist of
at least three directors and must include all of the outside directors. The
audit committee may not include the chairman of the board of directors, any
director employed by the company or providing services to the company on an
ongoing basis, or a controlling shareholder or any of the controlling
shareholder's relatives.
In addition, the NASDAQ Marketplace Rules require us to establish an audit
committee comprised of at least three members, all of whom must be independent
directors, each of whom is financially literate and satisfies the respective
"independence" requirements of the Securities and Exchange Commission and NASDAQ
and one of whom has accounting or related financial management expertise at
senior levels within a company.
Our Audit Committee assists our Board of Directors in overseeing the
accounting and financial reporting processes of our company and audits of our
financial statements, including the integrity of our financial statements,
compliance with legal and regulatory requirements, our independent registered
public accountants' qualifications and independence, the performance of our
internal audit function and independent registered public accountants, finding
any defects in the business management of our company and proposing to our Board
of Directors ways to correct such defects, approving related-party transactions
as required by Israeli law, and such other duties as may be directed by our
Board of Directors. The audit committee may consult from time to time with our
independent auditors and internal auditor with respect to matters involving
financial reporting and internal accounting controls.
Our Audit Committee consists of three members of our Board of Directors who
satisfy the respective "independence" requirements of the Securities and
Exchange Commission, NASDAQ and Israeli law for audit committee members. Our
current Audit Committee members are Messrs. Rami Daniel and Michael Shevi, our
outside directors under Israeli law, and Ms. Daniela Yaron-Zoller. Our Board of
Directors has determined that both Rami Daniel and Michael Shevi qualify as
audit committee financial experts, as defined by rules of the Securities and
Exchange Commission. The Audit Committee meets at least once each quarter.
EXECUTIVE COMPENSATION
The following table sets forth all the compensation we paid with respect to
all of our directors and executive officers as a group for the year ended
December 31, 2007.
Salaries, fees, Pension,
Commissions retirement and
and bonuses similar benefits
----------- ---------
All directors and executive
officers as a group (15 persons) $ 3,738,000 $ 281,000
During the year ended December 31, 2007, we paid our directors a per
meeting attendance fee of NIS 1,270 (approximately $3,110), plus an annual fee
of NIS 24,574 (approximately $6,016).
As of December 31, 2007, one director held options to purchase an aggregate
of 5,000 ordinary shares at an exercise price of $1.625 per share. Such options
have vested and will expire on January 19, 2009. The options were issued under
our 1999 Stock Purchase Plan.
At our 2007 annual general meeting of shareholders, our shareholders
approved the grant by our subsidiary Limco-Piedmont of options to purchase
shares of Common Stock of Limco Piedmont at $11.00 per share (the price to the
public in the initial public offering of Limco-Piedmont) to each of Messrs. Dov
Zeelim, the former Vice Chairman of our Board of Directors and our former Chief
Executive Officer, and Gillon Beck, a former director, in consideration for
their efforts and contributions to Limco Piedmont. Messrs. Zeelim and Beck were
granted options to purchase 35,000 and 30,000 shares of Common Stock of Limco
Piedmont, respectively. Such options expired without being exercised upon the
resignation of Messrs. Zeelim and Beck from their respective offices in May 2008
and December 2007, respectively.
Pursuant to their former employment agreements, the former Chairman of our
Board of Directors and our former President, Mr. Shlomo Ostersetzer, and the
former Vice Chairman of our Board of Directors and our former Chief Executive
Officer, Mr. Dov Zeelim, were each entitled to a bonus of 2.5% of our annual
consolidated operating income, in excess of $500,000. In the years ended
December 31, 2007, 2006 and 2005, we paid to Messrs. Ostersetzer and Zeelim in
the aggregate approximately $462,035, $517,730 and $292,298, respectively, which
amounts were divided equally between them.
At our 2007 annual general meeting of shareholders, our shareholders
approved the grant of a special bonus in the amount of $25,000 to Mr. Eran
Frenkel, in consideration for his efforts and contributions to Limco-Piedmont.
In May 2008, our Audit Committee and Board of Directors approved, effective
as of January 1, 2008, the payment to all of our directors other than our two
outside directors (within the meaning of Israel law) and Messrs. Giora Inbar,
Golan Kashi, Dr. Avraham Ortal and Eran Saar, of a service fee equal to the
highest applicable annual remuneration and per meeting attendance fee as
provided by Israeli law from time to time. The compensation was approved without
shareholder approval in accordance with the Companies Regulations (Relief from
Related Party Transactions), 5760-2000, promulgated under the Israeli Companies
Law.
RELATED PARTY TRANSACTIONS
MANAGEMENT AND SERVICES AGREEMENT
In February 2000, we entered into an agreement with TAT Industries, our
controlling shareholder, to purchase its operations relating to the manufacture
of aviation accessories and for the lease of certain real estate and buildings.
Pursuant to the terms of this agreement, all of the employees of TAT Industries
were transferred to us effective January 1, 2000, without any change in the
conditions of their employment. TAT Industries pays us $50,000 per year for
administrative and accounting personnel and secretarial staff, who served as
employees of TAT Industries before they were transferred to us and who continue
to provide such services.
In addition, pursuant to the terms of the agreement, we entered into a
lease agreement, pursuant to which we lease from TAT Industries, effective as of
January 1, 2000, an area of approximately 329,000 square feet, including 90,000
square feet of manufacturing, office and storage space, for a period of 24 years
and eleven months. In consideration for the lease agreement, we agreed to pay
TAT Industries an annual rental fee of $300,000, with an additional incremental
payment of 2% per year, such rental fee is subject to revaluation every fifth
year. In 2006, the rental fee was revaluated by a real estate appraiser, and as
a result the base fee was increased to $316,200 per year. The rental fee will be
revaluated again in 2010.
OTHER TRANSACTIONS
Prior to December 31, 2007, our Israeli operations employed the services of
a purchasing agent, Gal Tech Inc., or Gal Tech, a company owned by Messrs.
Shlomo Ostersetzer and Dov Zeelim, former directors and officers of our company,
and Israel Ofen, an officer of our company. According to an export agreement,
dated April 14, 1992, Gal Tech was entitled to a handling fee in the amount of
10% of all purchases by our company in North America per year and a handling fee
in the amount of 3% of all sales by our company to North America per year (not
including sales of heat transfer products). However, pursuant to this agreement,
the total amount to be paid by us to Gal Tech would not exceed the sum of 5% of
our purchases in North America and 5% of our sales to North America (not
including sales of heat transfer products) per year. In the years ended December
31, 2007, 2006 and 2005, we paid approximately $442,224, $387,000 and $537,000,
respectively, to Gal Tech, in accordance with such agreement. Ifat Frenkel (the
daughter of Dov Zeelim, the former Vice Chairman of our Board of Directors and
our former Chief Executive Officer) was the President of Gal Tech from January
1, 2003 to July 2006 and since August 2006, she has served as an officer of Gal
Tech. The export agreement was terminated by the parties as of December 31,
2007.
Pursuant to their former employment agreements, the former Chairman of our
Board of Directors and our former President, Mr. Shlomo Ostersetzer, and the
former Vice Chairman of our Board of Directors and our former Chief Executive
Officer, Mr. Dov Zeelim, were each entitled to a bonus of 2.5% of our annual
consolidated operating income, in excess of $500,000. In the years ended
December 31, 2007, 2006 and 2005, we paid to Messrs. Ostersetzer and Zeelim in
the aggregate approximately $462,035, $517,730 and $292,298, respectively, which
amounts were divided equally between them.
Ta-Top, a former major shareholder, provided us with management and
consulting services in consideration for the lesser of: (i) 3% of our
consolidated operating income in excess of $500,000, or (ii) $250,000 per year.
In the years ended December 31,2007, 2006 and 2005, we paid Ta-Top $250,000,
$250,000 and $175,379, respectively, for such services. The agreement was
terminated by the parties as of December 31, 2007.
OTHER RELATIONSHIPS
Mr. Israel Ofen, Executive Vice President and our Chief Financial Officer,
also serves as the general manager of TAT Industries.
Mr. Giora Inbar, the Chairman of our Board of Directors, Mr. Shmuel Fledel,
our Chief Executive Officer, Dr. Avraham Ortal, a member of our Board of
Directors, and Mr. Israel Ofen, Executive Vice President and our Chief Financial
Officer, also serve on the Board of Directors of Limco-Piedmont.
ELECTION OF OUTSIDE DIRECTOR
(ITEM 2 ON THE PROXY CARD)
Under the Israeli Companies Law, companies incorporated under the laws of
the State of Israel whose shares have been offered to the public are required to
appoint at least two outside directors. The Israeli Companies Law provides that
a person may not be appointed as an outside director if the person, or the
person's relative, partner, employer or an entity under that person's control,
has or had during the two years preceding the date of appointment any
affiliation with the company, or any entity controlling, controlled by or under
common control with the company. The term "relative" means a spouse, sibling,
parent, grandparent, child or child of spouse or spouse of any of the above. The
term affiliation includes an employment relationship; a business or professional
relationship maintained on a regular basis; control; and service as an officer
holder, (excluding service as an outside director of a company that is offering
its shares to the public for the first time).
In addition, no person may serve as an outside director if the person's
position or other activities create, or may create, a conflict of interest with
the person's responsibilities as director or may otherwise interfere with the
person's ability to serve as director. If, at the time an outside director is
appointed all members of the board of directors are of the same gender, then
that outside director must be of the other gender. A director of one company may
not be appointed as an outside director of another company if a director of the
other company is acting as an outside director of the first company at such
time.
At least one of the outside directors elected must have "accounting and
financial expertise" and any other outside director must have "accounting and
financial expertise" or "professional qualification," as such terms are defined
by regulations promulgated under the Israeli Companies Law.
Any committee of the board of directors must include at least one outside
director and the audit committee must include all of the outside directors. An
outside director is entitled to compensation as provided in regulations adopted
under the Israeli Companies Law and is otherwise prohibited from receiving any
other compensation, directly or indirectly, in connection with such service.
Outside directors are elected by shareholders by a special majority. In
general, outside directors serve for a three-year term, which may be renewed for
only one additional three-year term. Outside directors can be removed from
office only by the same special percentage of shareholders as can elect them, or
by a court, and then only if the outside directors cease to meet the statutory
qualifications with respect to their appointment or if they violate their duty
of loyalty to the company.
Messrs. Michael Shevi and Rami Daniel were reelected to serve as outside
directors of our company at our 2007 annual general meeting of shareholders for
a second three-year term expiring at 2010 annual general meeting of
shareholders, following which the service of Messrs. Shevi and Daniel as outside
directors may not be extended. On July 1, 2008, Mr. Shevi informed us that
effective as of the election of his successor he will resign as our outside
director due to other commitments.
Accordingly, at the Meeting, shareholders will be asked to elect Mr. Avi
Shani as an outside director of our company for an initial three-year term
expiring at our 2011 annual general meeting of shareholders.
MR. SHANI (60) has served as Senior Vice President of Business Development
and Chief Economist of IDB Development Corporation from July 2000 to October
2004. From February 2005 until February 2008, Mr. Shani served as the Chief
Executive Officer of TCM Mobile. Mr. Shani serves as a member of the Board of
Directors of Pesagot-Gadish Provident Fund, Calanit - Carmon Ltd. and Clal
Finance Hedge Funds. Mr. Shani holds a B.A. degree in Economics and an M.B.A.
from the Tel-Aviv University.
Our Board of Directors has determined that Messrs. Daniel and Shani each
qualifies as an outside director within the meaning of the Israeli Companies
Law. Our Board of Directors has further determined that Mr. Daniel and Mr. Shani
have accounting and financial expertise, as such terms are defined by
regulations promulgated under the Israeli Companies Law.
The election of the nominee for outside director requires the affirmative
vote of a majority of ordinary shares represented at the Meeting, in person or
by proxy, entitled to vote and voting on the matter, provided that either (i)
the shares voting in favor of such resolution include at least one-third of the
shares of non-controlling shareholders who vote on the matter (excluding the
vote of abstaining shareholders), or (ii) the total shareholdings of the
non-controlling shareholders who vote against such proposal do not represent
more than 1% of the voting rights in our company.
We are not aware of any reason why the nominee, if elected, would be unable
or unwilling to serve as an outside director. In the event that the named
nominee for outside director would be unable to serve, the proxies will be voted
for the election of such other person as shall be nominated by our Board of
Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEE
FOR OUTSIDE DIRECTOR.
APPROVAL OF AN AGREEMENT WITH TAT INDUSTRIES OUR CONTROLLING SHAREHOLDER,
FOR THE PURCHASE OF SHARES OF BENTAL INDUSTRIES LTD.
(ITEM 3 ON THE PROXY CARD)
Under the Israeli Companies Law, the terms of an extraordinary transaction
with a controlling shareholder must be approved by the audit committee, board of
directors and the general meeting of shareholders.
On March 27, 2008, we entered into an agreement with Bental Investments
Cooperative Agricultural Society Ltd., or Bental Investments, to purchase from
it 27% of the outstanding shares of Bental Industries Ltd., or Bental
Industries, an Israeli company that specializes in innovative motion
technologies for military and aviation and a leading supplier in its field to
Israel's defense industries. In consideration for such ownership interest, we
agreed to pay $3,375,000 upon consummation of the transaction. In addition,
Bental Investments agreed to grant us a call option to purchase an additional
18% of the outstanding shares of Bental Industries held by it, in up to four
installments, in consideration of $2,250,000. The consideration for the option
shares will bear interest of 2% per annum. The call option will be valid for a
period of four years commencing as of January 1, 2009. We agreed to grant to
Bental Investments a put option in the amount of $2,137,500, valid for a period
of two years as of January 1, 2011. We agreed that for the foregoing amounts,
the exchange rate of the U.S. dollar to the NIS will range between $1=NIS
3.70-3.95. If the exchange rate is less than NIS 3.70, then the foregoing
amounts will be increased proportionately, if the rate is more than NIS 3.95
then the amounts will be decreased proportionately and if the exchange rate is
within the above range, the amounts will remain intact. In the event that during
the three year period following the closing of the transaction we consummate an
"exit," as such term is defined in the agreement, Bental Investments will be
entitled to additional consideration for the shares and call option shares (if
purchased) equal to a certain percentage of the difference between the price per
share that we paid for such shares and the price per share paid in the exit
transaction (30% if the exit is within one year of the closing, 20% if the exit
is within two years of the closing and 10% if the exit is within three years of
the closing). On April 15, 2008, we entered into an agreement to purchase an
additional 10% of the outstanding shares of Bental Industries from Mivtach
Shamir Investments (1993) Ltd., or Mivtach, in consideration for $1,225,000. We
agreed that the exchange rate of the dollar to the NIS will range between $1=NIS
3.70-3.95, as described above.
The foregoing transactions with Bental Investments and Mivtach were
consummated on May 21, 2008, as a result of which we currently hold 37% of the
outstanding shares of Bental Industries and a call option to purchase an
additional 18% of the outstanding shares of Bental Industries.
Our Audit Committee and Board of Directors have approved, subject to
shareholder approval, our entering into an agreement with TAT Industries, our
parent company, for the purchase of 15% of the outstanding ordinary shares of
Bental Industries, which are held by it, in consideration for $1,837,500. The
price per share and the exchange rate of the dollar to the NIS are the same as
the price per share and the exchange rate in the third party transactions we
entered into with the unrelated parties as described above.
Our Audit Committee and Board of Directors believe that the terms of the
agreement with TAT Industries are comparable to terms of the share purchase
agreements we have entered into with the unrelated parties as described above
and are at arm's length, and that entering into such agreement is in our best
interest.
It is therefore proposed that at the Meeting the shareholders adopt the
following resolution:
"RESOLVED, to approve the agreement with TAT Industries for the
purchase of 15% of the outstanding ordinary shares of Bental Industries,
held by it in consideration for $1,837,500."
Pursuant to the Israeli Companies Law, the affirmative vote of the holders
of a majority of the ordinary shares represented at the Meeting, in person or by
proxy, entitled to vote and voting thereon, is required to approve the foregoing
resolution, provided that either (i) the shares voting in favor of such
resolution (excluding the vote of abstaining shareholders) include at least
one-third of the non-interested shareholders with respect to such proposal
represented and voting on the matter, or (ii) the total shareholdings of the
non-interested shareholders with respect to such proposal who vote against the
resolution (excluding the vote of abstaining shareholders) must not represent
more than 1% of the voting rights in our company. Under the Israeli Companies
Law, a "personal interest" (i) includes the personal interest of a relative of
the shareholder (including spouse thereof); (ii) includes the personal interest
of a corporation in which the shareholder or relative (including spouse thereof)
serves as a director or the chief executive officer, owns at least 5% of the
shares, or has the right to appoint a director or the chief executive officer;
and (iii) excludes an interest arising solely from the ownership of the
company's ordinary shares. In the proxy card attached to this proxy statement
you will be asked to indicate whether you have a personal interest in this
transaction.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE FOREGOING
RESOLUTION.
APPOINTMENT OF AUDITORS
(ITEM 4 ON THE PROXY CARD)
We first appointed Baker Tilly Oren Horowitz & Co., C.P.A., members of
Baker Tilly International, as our independent auditors in 2006. Baker Tilly Oren
Horowitz & Co., C.P.A. has no relationship with us or any of our affiliates
except as auditors.
At the Meeting, shareholders will be asked to ratify and approve the
re-appointment of Baker Tilly Oren Horowitz & Co., C.P.A. as our independent
registered public accountants for the fiscal year ending 2008, pursuant to the
recommendation of our Audit Committee and Board of Directors. As a result of
Baker Tilly Oren Horowitz & Co., C.P.A. familiarity with our operations and its
reputation in the auditing field, our Audit Committee and Board of Directors
believe that Baker Tilly Oren Horowitz & Co., C.P.A. has the necessary
personnel, professional qualifications and independence to act as our
independent registered public accountants.
At the Meeting, shareholders will also be asked to authorize our Board of
Directors to delegate to our Audit Committee the authority to determine the
remuneration of our independent auditors according to the volume and nature of
their services. With respect to fiscal year 2007, we paid Baker Tilly Oren
Horowitz & Co., C.P.A., approximately $437,389 for audit services, $52,000 for
audit-related services and $12,500 for tax-related services.
It is therefore proposed that at the Meeting the shareholders adopt the
following resolution:
"RESOLVED, that the appointment of Baker Tilly Oren Horowitz & Co.,
C.P.A., members of Baker Tilly International, as the independent public
accountants of the Company to conduct the annual audit of our financial
statements for the year ending December 31, 2008, be and hereby is ratified
and approved, and it is further resolved, that the Board of Directors be,
and it hereby is, authorized to delegate to the Audit Committee of the
Board if Directors the authority to determine the remuneration of such
auditors in accordance with the volume and nature of their services."
The affirmative vote of the holders of a majority of the ordinary shares,
represented at the Meeting in person or by proxy, entitled to vote and voting
thereon, is required to approve the foregoing resolution.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOREGOING RESOLUTION.
AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
Our Audit Committee has adopted a policy and procedures for the
pre-approval of audit and non-audit services rendered by our independent public
accountants. Pre-approval of an audit or non-audit service may be given as a
general pre-approval, as part of the audit committee's approval of the scope of
the engagement of our independent auditor, or on an individual basis. The policy
prohibits retention of the independent public accountants to perform the
prohibited non-audit functions defined in Section 201 of the Sarbanes-Oxley Act
and the rules of the Securities and Exchange Commission, and also requires the
audit committee to consider whether proposed services are compatible with the
independence of the public accountants.
REVIEW AND DISCUSSION OF OUR AUDITOR'S REPORT AND FINANCIAL STATEMENTS
At the Meeting, our Auditor's Report and Financial Statements for the year
ended December 31, 2007 will be presented. We will hold a discussion with
respect to the financial statements at the Meeting. This item will not involve a
vote of the shareholders.
COPIES OF THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,
2007 WILL BE MAILED WITHOUT CHARGE TO ANY SHAREHOLDER ENTITLED TO VOTE AT THE
ANNUAL GENERAL MEETING, UPON WRITTEN REQUEST TO: TAT TECHNOLOGIES LTD., PARK
RE-EM INDUSTRIAL ZONE, P.O. BOX 80, GEDERA 70750, ISRAEL, ATTENTION: AYA BEN
DAVID, SECRETARY.
By Order of the Board of Directors
Aya Ben David
Secretary
Date: July 11, 2008
ITEM 2
TAT TECHNOLOGIES LTD.
ANNUAL GENERAL MEETING OF SHAREHOLDERS
AUGUST 18, 2008
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Aya Ben-David attorney of the undersigned,
for and in the name(s) of the undersigned, with power of substitution and
revocation to vote any and all ordinary shares, par value NIS 0.90 per share, of
TAT Technologies Ltd. (the "Company"), which the undersigned would be entitled
to vote as fully as the undersigned could if personally present at the Annual
General Meeting of Shareholders of the Company to be held on August 18, 2008 at
10:00 a.m. at the offices of KMN Holdings Ltd., 85 Medinat Hayehudim St., 14th
floor, Business Park, Herzlia Pituach 46140, Israel, and at any adjournment or
adjournments thereof, and hereby revoking any prior proxies to vote said shares,
upon the following items of business more fully described in the notice of and
proxy statement for such Annual General Meeting (receipt of which is hereby
acknowledged):
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED. IF NO DIRECTION IS
GIVEN, THIS PROXY WILL BE VOTED FOR (I) THE ELECTION OF THE NOMINEES FOR
DIRECTOR AND (II) PROPOSALS 2 THROUGH 4 SET FORTH ON THE REVERSE. VOTES CAST FOR
PROPOSAL 3 WILL NOT BE COUNTED UNLESS YES OR NO HAS BEEN SPECIFIED AS TO WHETHER
THE SHAREHOLDER HAS A PERSONAL INTEREST (AS DEFINED IN THE PROXY STATEMENT) WITH
RESPECT TO THE PROPOSAL.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
ANNUAL GENERAL MEETING OF SHAREHOLDERS OF
TAT TECHNOLOGIES LTD.
AUGUST 18, 2008
PLEASE DATE, SIGN AND MAIL
YOUR PROXY CARD IN THE
ENVELOPE PROVIDED AS SOON
AS POSSIBLE.
PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED.
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND
"FOR" PROPOSALS 2 THROUGH 4.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
--------------------------------------------------------------------------------
1. The election of four Directors for terms expiring in 2009.
NOMINEES:
FOR AGAINST ABSTAIN
Giora Inbar [_] [_] [_]
Avraham Ortal [_] [_] [_]
Eran Saar [_] [_] [_]
Daniela Yaron-Zoller [_] [_] [_]
2. To elect Avi Shani as an outside director.
[_] FOR [_] AGAINST [_] ABSTAIN
PURSUANT TO ISRAELI LAW, IN ORDER TO ENSURE SPECIFIC MAJORITY REQUIREMENTS WE
ARE REQUIRED TO ASK YOU IF YOU HAVE A PERSONAL INTEREST (AS DESCRIBED IN THE
PROXY STATEMENT) WITH RESPECT TO PROPOSAL 3.
3. To approve the agreement with TAT Industries for the purchase of 15% of the
outstanding ordinary shares of Bental Industries Ltd., held by it in
consideration for $1,837,500.
[_] FOR [_] AGAINST [_] ABSTAIN
Do you have a personal interest with respect to Proposal 3? YES ____ NO _____
4. To ratify and approve the reappointment of Baker Tilly Oren Horowitz & Co.,
C.P.A., members of Baker Tilly International, as the Company's independent
registered public accountants for the year ending December 31, 2008 and to
authorize the Company's Board of Directors to delegate to its Audit
Committee the authority to determine their remuneration in accordance with
the volume and nature of their services.
[_] FOR [_] AGAINST [_] ABSTAIN
To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that changes
to the registered name(s) on the account may not be submitted via this method.
[_]
Signature of Shareholder _______ Date _____ Signature of Shareholder__________
Date _____
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR ON THIS PROXY. WHEN
SHARES ARE HELD JOINTLY, EACH HOLDER SHOULD SIGN. WHEN SIGNING AS EXECUTOR,
ADMINISTRATOR, ATTORNEY, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF
THE SIGNER IS A CORPORATION, PLEASE SIGN FULL CORPORATE NAME BY DULY AUTHORIZED
OFFICER, GIVING FULL TITLE AS SUCH. IF SIGNER IS A PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED PERSON.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TAT TECHNOLOGIES LTD.
(Registrant)
By: /s/ Shmuel Fledel
---------------------
Shmuel Fledel
Chief Executive Officer
Date: July 14, 2008