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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 November, 2002
ROBOGROUP T.E.K. LTD.
(Name of Registrant)
Rechov Hamelacha 13, Afeq Industrial Estate, Rosh HaAyin 48091 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 |X| No |_|
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-___________
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Report Regarding Special Private Offer and Undertaking of Indemnity and Release
from Liability of Directors and Officers
An immediate report is hereby submitted pursuant to the provisions of
Section 4 of the Israeli Securities Regulations (Private Offer of Securities in
a Registered Company), 2000, (the "Private Offer Regulations"), and pursuant to
the provisions of the Israeli Securities Regulations (Transaction between a
Company and a Controlling Shareholder), 2001 (the "Controlling Shareholder
Regulations"), regarding a special private offer of securities to controlling
shareholders of RoboGroup ("the Company"), and the convening of an annual
general meeting of shareholders of the Company (the "Meeting"), wherein the
agenda will include a proposal regarding the special private offer.
In addition, an immediate report is hereby submitted in accordance with
the Controlling Shareholder Regulations regarding the delivery of
indemnification and release agreements, and the convening of the Meeting wherein
the agenda will include a proposal regarding the delivery of indemnification and
release agreements will be proposed.
A. Special Private Offer of Securities to Controlling Shareholders of the
Company
Introduction
On November 11, 2002, the board of directors of the Company,
following the approval of the audit committee, resolved to approve a stock
option plan for directors and employees of the Company and its
subsidiaries, authorizing the grant of options to purchase up to 1,270,000
of the Company's ordinary shares par value NIS 0.50 each, subject to
adjustments as set forth below (the "Options"). The board of directors of
the Company also resolved to convene a Meeting wherein the agenda will
include a proposal to approve the special private offer (the "Special
Private Offer"). The directors of the Company are to be allotted 570,000
Options in the special private offer (the "Directors' Plan"), employees of
the Company and its subsidiaries in Israel are to be allotted up to
480,000 Options under the provisions of the offer of securities to
employees (the "Employees' Plan") and employees of the Company's US
subsidiary who are not Israeli residents will be allotted 220,000 Options
under an employee plan in accordance with the laws of the United States of
America(*). The aggregate amount of options allotted to all employees of
the Company and its subsidiaries is 700,000.
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(*) The principal terms (i.e. Exercise Price, Exercise periods etc.) of
the 220,000 options allotted to the Company's US employees who are
not Israeli residents (the "US option Plan") will be identical to
the principal terms of the options allotted to Israeli employees and
to the options allotted to directors according to this report. To
the best of the Company's
knowledge, the none of the employee offerees under the US Option
Plan are an interested party in the Company and will not become an
interested party as a result of the allotment of said options. The
options under the U.S. Option Plan will be subject to the Securities
Regulations (details for paragraphs 15A through 15C of the Law),
2000.
At the Meeting to be convened on December 17, 2002, the Special
Private Offer and the two option plans for employees will be submitted to
shareholders for approval as one proposal, hence, it will not be possible
to approve only one of the plans. A profile, including the details of the
option plans for employees will be filed after the Company receives Tel
Aviv Stock Exchange approval for registration of the shares underlining
the Options for trading.
1. Details of the Special Private Offer
570,000 Options will be allotted under the Directors' Plan to nine
(9) directors of the Company, such Options to be offered subject to
fulfillment of the conditions hereinafter specified in this notice.
2. The Offerees
The Company will allot to a trustee (the "Trustee") 570,000 Options
of the Company for all of the Company's directors on the date of the
resolution of the board of directors regarding the Special Private Offer.
The offerees are Messrs. Rafael Aravot, Ahinoam Kra-Oz, Haim Schliefer,
Gideon Missulawin, Menachem Zenziper, Arie Kraus, Alex Tal, Tammy Gotlieb
and Amiram Dagan (the "Offerees").
The Options will be allotted to the Trustee for the Offerees in
accordance with the following table:
Name of Offeree Amount
--------------- ------
(a) Rafael Aravot 90,000
(b) Ahinoam Kra-Oz 90,000
(c) Haim Schliefer 90,000
(d) Gideon Missulawin 50,000
(e) Menachem Zenziper 50,000
(f) Arie Kraus 50,000
(g) Alex Tal 50,000
(h) Tammy Gotlieb (outside director) 50,000
(i) Amiram Dagan (outside director) 50,000
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Total 570,000
Three of the Offerees are full-time employees of the Company
(Messrs. Rafael Aravot - Chief Executive Officer; Ahinoam Kra-Oz - Co-CEO;
Haim
Schliefer - Co-CEO), two of them are part-time employees of the Company
(Menachem Zenziper and Gideon Missulawin) and two of them are outside
directors of the Company (Tammy Gotlieb and Amiram Dagan).
3. Interested Party
According to "interested parties" definition in Section 270(5) of
the Companies Law, 1999 (the "Companies Law"), Messrs. Rafael Aravot,
Ahinoam Kra-Oz, Haim Schliefer, Gideon Missulawin, Menachem Zenziper and
Arie Kraus are "interested parties" in the Company, since they are
substantial shareholders whose ownership interest in the Company will
increase following the Special Private Offer.
With regard to the approval of this Special Private Offer, those
Offerees who are interested parties in the Company constitute "controlling
shareholders" of the Company, as this term is defined in Section 268 of
the Companies Law.
4. The Securities Offered
4.1 The Company will allot 570,000 Options to the Trustee for the
Offerees. Each Option will authorize the grant to the optionee of
the right to purchase one ordinary share par value NIS 0.50 of the
Company in consideration for payment in cash of the Exercise Price
on the Exercise Date (as are defined in Section 10 below).
4.2 The shares that are covered by the plan (the "Shares") will have the
same rights as the existing ordinary shares of the Company and will
entitle their holders to the full cash dividend and any other
distribution, including distribution of bonus shares, if the date of
determination of the rights for such dividend or distribution occurs
on or after the date of allotment thereof.
4.3 The Options will not initially be registered for trading on the Tel
Aviv Stock Exchange or on Nasdaq. The Shares will be registered for
trading on Nasdaq, subject to the filing of a registration statement
(Form S-8) with the Securities and Exchange Commission, and on the
Tel Aviv Stock Exchange, subject to the approval of the Tel Aviv
Stock Exchange for registration of the Shares for trading.
Assuming that the 570,000 Options offered to the Offerees under this
Special Private Offer are all exercised, the Shares will comprise
4.83% of the voting rights and of the issued and paid-up capital of
the Company as of the date following the allotment of the Options
and 4.53% of the voting rights and of the issued and paid-up capital
of the Company after full dilution.
For the purposes of this report, "full dilution" assumes that:
75,400 Options allotted to the Trustee under the option plan of 1997
for employees of the Company and its subsidiaries, that have not yet
been exercised as at the date of this report will be exercised(1);
all of the 12,500 Options allotted to an interested party in 2001
are exercised; and all 700,000 of the Options under the Employee
Option Plans are allotted and exercised(2).
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(1) These Options may be exercised through December 31, 2006.
(2) The Option Plan for employees of the Company and its Israeli
subsidiaries will be subject to the approval of the Meeting which is
to convene on December 17, 2002 and to the approval of the Tel Aviv
Stock Exchange of the registration for trading of the Shares that
are covered by the Directors' plan.
(3) The Offerees Tammy Gotlieb and Amiram Dagan will end their first
terms of office as outside directors of the Company in 2005. Should
they be elected for an additional term, they will serve until 2008.
If they are not elected for an additional term, they will be
entitled to exercise only 40% of the Options allotted to them.
4.4 In the event that the right of any of the Offerees to exercise the
Options allotted to him or her as set forth above expires, the
Company will be entitled to instruct the Trustee to transfer such
Options or part thereof to another director of the Company, upon
such conditions as may be determined by the board of directors of
the Company, subject to the conditions of the Directors' Plan and
the provisions of the Israeli law.
4.5 Subject to the provisions of Section 4.4 above, the Options granted
to the Offerees are non-transferable, non-assignable and may not be
assigned by the Offerees in favor of others, other than transfers to
heirs in the event of death or to a guardian in the event of loss of
legal capacity.
5. Terms of Exercise and Dates of Exercise of the Options
5.1 Subject to the provisions of Sections 5.3-5.5 below, each of the
Offerees(3) will be entitled to exercise the Options allotted to him
or her in five installments in accordance with the following dates,
without derogating from the lock up provisions applying to the
Options as described in Section 16 below:
- 20% of the Options will be exercisable - as of January 1, 2004 and
up to the end of the Exercise period.
- 20% of the Options will be exercisable - as of January 1, 2005 and
up to the end of the Exercise period.
- 20% of the Options will be exercisable - as of January 1, 2006 and
up to the end of the Exercise period.
- 20% of the Options will be exercisable - as of January 1, 2007 and
up to the end of the Exercise period.
- 20% of the Options will be exercisable - as of January 1, 2008 and
up to the end of the Exercise period.
5.2 After the Options vest, in accordance with the dates set forth in
Section 5.1 above, each Offeree will be entitled to exercise the
Options allotted to him or her subject to the conditions set forth
in Sections 5.3-5.5 below, up to December 31, 2012 (the "End of the
Exercise Period"). Options not exercised prior to the End of the
Exercise Period will expire and will not grant any rights whatsoever
to their owners.
5.3 The Options may be exercised for as long as the Offeree acts as
director of the Company or a subsidiary and/or for as long as
employment relations exist between the Offeree and the Company
and/or a subsidiary, and for a period of twelve months from the date
of termination of the Offeree's term of office as a director of the
Company or of a subsidiary and/or from the date of termination of
employment relations between the Offeree and the Company and/or a
subsidiary, whichever is the later.
In the event of termination of office of an Offeree as a director of
the Company or of a subsidiary and/or in the event of termination of
employment relations between the Offeree and the Company and/or a
subsidiary for any reason whatsoever other than death, dismissal or
resignation under circumstances set out in Section 5.5 below, the
entitlement of the Offeree to exercise the Options allotted to him
or her will expire at the end of one year following the date of
termination of office as director of the Company or of a subsidiary
or one year following the date of termination of employment
relations between the Offeree and the Company or a subsidiary,
whichever is the later, but not later than the End of the Exercise
Period (the "Date of Expiry of the Right to Exercise"). On the Date
of Expiry of the Right to Exercise, the Offeree will not be entitled
to exercise the Options allotted to him or her, which have not
vested, nor will he even be entitled to exercise such Options
allotted to him or her which have vested, but which have not at such
date been exercised.
5.4 The change of employment of an Offeree from the Company to a
subsidiary and/or the change of office of a director of the Company
to that of director of a subsidiary will not be deemed to be
termination of employment and/or office for the purposes of Section
5.3 above, and the Offeree's rights to exercise the Options allotted
to him or her will not change due to such transfer.
5.5 Notwithstanding the aforesaid, if any of the Offerees ceases to be
an employee and/or ceases to act as a director of the Company or of
a subsidiary of the Company due to death, dismissal or resignation
due to bad health, such Offeree or his legal heirs will have the
right to exercise the Options that such Offeree would have been able
to exercise on the date of termination of employment or, for a
period of eighteen months from the date of termination of employment
relations between the Offeree and the Company or a subsidiary or of
the date of termination of office of director of the Company or a
subsidiary, whichever is the later (but not later than the end of
the exercise term).
For the purpose of this Section only, "subsidiary" is defined as a
company in which the Company holds 25% or more of the par value of
its issued share capital, or of the voting rights in it, or is
entitled to appoint 25% or more of its directors.
6. Provisions to Protect Holders of Options
Upon the occurrence of any of the events set forth below as of the date of
allotment of the Options and until the end of the Exercise Period, the
holders of Options not yet exercised before the occurrence of one of the
following allotment events will be entitled to the following benefits:
6.1 Allotment of bonus shares
In the event of distribution of bonus shares where the date of
determination of entitlement to receive such (in this paragraph: the
"Date of Determination") is prior to the End of the Exercise Period,
the Company will transfer the sum equivalent to the sum of the par
value of the bonus shares which would have been owing to the
Offerees holding Options not yet exercised by such date had they
exercised their Options for shares prior to the Date of
Determination, including - in the event of a second or further
distribution of bonus shares in respect of which the Company acts in
accordance with the provisions of this paragraph - entitlement
resulting from any prior distribution of bonus shares as aforesaid,
into a special fund that will be set up for the purpose of
distribution of the bonus shares in the future, shortly before the
date of allotment of the bonus shares.
The Company will allot shares of the same class allotted as bonus
shares to the ordinary shareholders of shares of the same class as
the exercise shares to Offerees who hold Options and who exercise
their right to exercise such Options after the Date of
Determination. In addition to the Shares to which they are entitled
as a result of exercising such right of exercise, as fully paid
bonus shares at a ratio of one bonus share for every Share, which
will be equal to the ratio of one bonus share for every share
that would have existed in the issued and paid-up capital of the
Company on the date of distribution of the bonus shares, by
appropriate capitalization from out of the special fund.
In such case, the number of Shares to which a holder of Options is
entitled will not increase nor will the payment for one Shares
decrease.
Options not exercised before the End of the Exercise Period will not
grant their holders sums or shares from the special fund or any
other right.
6.2 Offer by way of Rights
In the event of issuance of rights to shareholders of the Company,
in the event that the date of determination of entitlement to
receive such rights is in the period between the date of allotment
of Options to the Offerees and the End of the Exercise Period, the
number of exercise shares will be adjusted to the bonus component of
the rights. The bonus component of the rights will be calculated for
this purpose in accordance with the ratio of the price of the share
on the Tel Aviv Stock Exchange on the date of determination of the
right to take part in the rights issue and the base price for
trading of the shares on the Tel Aviv Stock Exchange "ex- rights",
on the first date on which the shares are to be traded without
rights. Calculation of the bonus component will be audited by the
Company's accountant.
6.3 Additional Provisions to Protect Holders of Options
Subsequent to the date of allotment of the Options to Offerees and
as long as the Options remain unexercised, but in any event no later
than the End of the Exercise Period, the following provisions will
apply:
6.3.1 The Company will have a sufficient number of ordinary shares
of NIS 0.5 par value each in its registered capital, in order
to ensure performance of the right to exercise the additional
rights of those holding the Options and if necessary will
cause its registered capital to increase.
6.3.2 If the Company merges its ordinary shares of NIS 0.5 par value
in its issued capital to shares of a greater par value, or
divides them by sub-division into shares of a smaller par
value, the number of exercise shares allotted following
exercise of the Options will be decreased or increased, as the
case may be, after the effecting of such act.
6.3.3 In the event that a resolution of voluntary winding up of the
Company will be approved, the Company will notify in writing
all of the holders of the Options regarding the passing of
such resolution, and regarding the right of exercise referred
to below. In such event, every person holding Options may,
within 30 days of the date of the notice, give notice in
writing to the Company of his or her desire to be considered
to have exercised his or her exercise right immediately before
such resolution have been approved. The holder of such Options
as aforesaid will be entitled to payment equivalent to the sum
that would be owing to him or her on winding up were he or she
the holder of shares following exercise of the Options owned
by him or her immediately prior to the approval of the
resolution to wind up, less the Exercise Price.
Where the sum to which a holder of Options is entitled
following exercise of the Options held by him or her
immediately prior to the passing of the resolution of winding
up, and after deduction of the Exercise Price from the money
received from his or her portion of the winding up, if
positive, he or she will be deemed to have exercised his or
her right to exercise as aforesaid.
7. Price of Shares of the Company on the Tel Aviv Stock Exchange and on
Nasdaq
The prices of the ordinary shares on the Tel Aviv Stock Exchange and on
Nasdaq on the date of the resolution of the board of directors, November
11, 2002, was NIS 4.22 and $0.99 respectively.
The prices of the ordinary shares on the Tel Aviv Stock Exchange and on
Nasdaq immediately prior to publication of the Immediate Disclosure on
December 11, 2002, was NIS 4.31 and $0.85 respectively.
8. The Economic Value of the Options
The economic value of each of the Options on offered is $0.83.
The economic value is calculated using the "Black and Scholes" formula,
taking into account the average closing price of the shares of the Company
on Nasdaq for the last 30 trading days prior to the filing of this report
on December 12, 2002, i.e. $0.91.
In calculating the economic value of the Options, the following
presumptions were taken into account: Standard deviation - 110%; Exercise
Price - $0.91; average share price on Nasdaq for the last 30 trading days
- $0.91; option term - 108 months; rate of interest - 2%.
9. The Issued Share Capital of the Company, Ownership Interest of the
Offerees and Persons with an Interest in the Company
9.1 The issued share capital of the Company prior to the allotment to
the Offerees and prior to the allotment of the Options under the
Employees' Plans is composed of NIS 5,612,076 divided into
11,224,152 ordinary shares of NIS 0.5 par value each.
9.2 The issued share capital of the Company after the allotment of
570,000 Options to the Offerees (and assuming that they are all
exercised) and after the allotment of 700,000 Options under the
Employees' Plans (assuming that they are all exercised) will be made
up of NIS 6,247,076 divided into 12,494,152 ordinary shares of NIS
0.5 par value each.
9.3 The issued share capital of the Company assuming full dilution (as
such term is defined in paragraph 4.3 above) will be composed of NIS
6,291,026 divided into 12,582,052 ordinary shares of NIS 0.5 par
value each.
9.4 The amounts and rates of holdings of the Offerees, of interested
parties in the Company and the total holdings of the other
shareholders in the issued and paid-up capital of the Company and in
the voting rights in the Company will be as follows:
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Name of interested patry Amount of Percentage Amount of Percentage Amount of Percentage
ownership of ownership of ownership of
before the ownership after the ownership (fully owners
allotment before the allotment after the diluted) (fully
allotment given the allotment diluted)
assumption given the
set forth in assumption
Section 9.2 set forth in
Section 9.2
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Rafael Aravot 878,042 7.82% 968,042 7.74% 968,042 7.69%
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Ahinoam Kra-Oz (a) 706,478 6.29% 796,478 6.37% 796,478 6.33%
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Haim Schliefer 701,412 6.24% 791,412 6.33% 791,412 6.29%
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Gideon Missulawin 745,287 6.64% 795,287 6.36% 795,287 6.32%
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Menachem Zenziper (b) 1,232,960 10.98% 1,282,960 10.26% 1,282,960 10.19%
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Arie Kraus (a) 762,177 6.79% 812,177 6.50% 812,177 6.45%
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Alex Tal -- -- 50,000 0.40% 50,000 0.39%
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Tammy Gotlieb -- -- 50,000 0.40% 50,000 0.39%
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Amiram Dagan -- -- 50,000 0.40% 50,000 0.39%
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David Israel Rosen (c) 812,500 7.23% 812,500 6.50% 825,000 6.55%
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The Company 494,321 4.40% 494,321 3.95% 494,321 3.86%
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Rest of the shareholders 4,890,975 43.57% 5,590,515 44.74% 5,666,375 45.03%
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Total 11,224,152 100% 12,494,152 100% 12,582,052 100%
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(a) Messrs Kraus and Kra-Oz are brothers.
(b) Holds jointly with family members.
(c) To the best of the Company's knowledge, based on a schedule
13D Report filed by Mr. Israel Rosen and his wife with the
U.S. SEC, dated August 26, 2002.
10. Consideration
The Options will be allotted to the Trustee for the Offerees for no
consideration.
The Exercise Price of the Options offered will be the NIS equivalent to
$0.91. The Exercise Price was based on the average close price of the
Company's shares on Nasdaq for the last 30 trading days prior the filing
of this report (the "Exercise Price").
The Exercise Price will be paid to the Company on the date on which the
Offeree notifies the Company in writing of his or her wish to exercise the
Options allotted to him or her and the Company approves his or her
entitlement to exercise the Options in accordance with the conditions of
the Directors' Plan (the "Exercise Date").
11. Method of Determination of Consideration
The Exercise Price has been set by the board of directors and equals, as
aforesaid, the average close price of the Company's shares on Nasdaq for
the last 30 trading days prior the filing of this report. The Exercise
Price in the Special Private Offer to the directors is the same as the
Exercise Price for the Options to be allotted to employees of the Company
and its subsidiaries under the Employees' Plans.
12. Personal Interest of Substantial Shareholder or Officer
Messrs. Rafael Aravot, Ahinoam Kra-Oz, Haim Schliefer, Gideon Missulawin,
Menachem Zenziper and Arie Kraus have a personal interest in the approval
of the Special Private Offer due to their being officers and substantial
shareholders of the Company, as well as Controlling Shareholders as that
term is defined in Section 268 of the Companies Law.
Messrs. Alex Tal, Tammy Gotlieb and Amiram Dagan have a personal interest
in the approval of the Special Private Offer due to their being officers
of the Company.
13. Investment Scheme
The consideration to be received following exercise of the Options, if
exercised, will be used by the Company to finance the operations of the
Company and its subsidiaries, in accordance with the resolutions of the
board of directors from time to time.
14. Consents Required for the purpose of Implementing the Allotment under this
Offer
14.1 The allotment requires the consent of the Meeting, in accordance
with the provisions of Sections 270(4) and -275 of the Companies
Law.
14.2 The allotment requires the consent of the Tel Aviv Stock Exchange
for listing of the exercise shares for trading. Concurrent with the
filing of this report, the Company has applied to the Tel Aviv Stock
Exchange to obtain consent to register the Shares for trading on it.
15. Agreements between the Offerees and Shareholders
To the best of the Company's knowledge, and as confirmed by Offerees,
Messrs. Rafael Aravot, Ahinoam Kra-Oz, Haim Schliefer, Menachem Zenziper,
Arie Kraus, Alex Tal, Tammy Gotlieb and Amiram Dagan , none of the
Offerees have agreements, written or oral, with another shareholder of the
Company or with
each other, or with others regarding the purchase or sale of securities of
the Company or relating to voting rights therein.
Mr. Gideon Missulawin has a power of attorney to vote at shareholders
meetings of the Company the ordinary shares held by another shareholder of
the Company, who at the date of this report holds 72,210 ordinary shares
of the Company.
16. Limitations Regarding Dealings in the Securities Offered
16.1 Lock-up for a period of 24 months will apply to the Options and the
Shares allotted for Offerees who may be subject to provisions of
Section 102 of the Income Tax Ordinance.
16.2 Lock-up under Section 15C of the Securities Law, 1968 and the
regulations made thereunder will apply to the Shares allotted to
Offerees.
16.2.1 For a period of one year from the date of allotment of the
Options (the "Period"), the Exercise Shares will not be
offered for trading on the Tel Aviv Stock Exchange.
16.2.2 During eight consecutive quarters following the end of the
Period (the "Additional Period"), the Exercise Shares may
only be offered during trading on the Tel Aviv Stock Exchange
subject to the following conditions:
(a) The number of Shares that may be offered on any trading
day on the Tel Aviv Stock Exchange will be the daily
average of trading on the Tel Aviv Stock Exchange of
shares of the same class as the Shares, over the period
of eight weeks prior to the date of the offer.
(b) The percentage of Shares offered out of the issued and
paid-up capital of the Company for the date of offer is
one percent of the issued and paid-up capital of the
Company during each quarter. For the purposes of this
paragraph, "issued and paid-up capital" will mean: "with
the exception of shares flowing from the exercise or
conversion of convertible securities issued up to the
date of offer and not yet exercised or converted."
The above lock-ups will also apply to securities purchased during
the Period or Additional Periods as aforesaid, other than under a
prospectus or during the ordinary course of trading on the Tel Aviv
Stock Exchange, by the Offerees.
16.3 The Company intends to file a registration statement (Form F-3) with
the Securities and Exchange Commission in order to allow resale of
the Shares allotted to the Offerees in accordance with the
provisions of the Securities Act of 1933.
17. Reasons Given by Audit Committee and Board of Directors for Approval of
the Private Offer
The Special Private Offer made to Offerees constitutes remuneration for
the contribution of the Offerees to the Company and an incentive to the
Offerees to continue to contribute to the development and promotion of the
Company's business for the long term.
18. The Directors who took part in Approval of the Private Offer
The directors who took part in the approval of the Special Private Offer
in the Audit Committee are Alex Tal, Tammy Gotlieb (outside director) and
Amiram Dagan (outside director).
The directors who took part in the approval of the Special Private Offer
on the board of directors are Rafael Aravot, Ahinoam Kra-Oz, Haim
Schliefer, Gideon Missulawin, Menachem Zenziper, Arie Kraus, Alex Tal,
Tammy Gotlieb (outside director) and Amiram Dagan (outside director).
19. Date of Allotment of the Option
Subject to the approval of the Tel Aviv Stock Exchange to the registration
of the Shares for trading, the Company will grant the Trustee the Options
for the Offerees shortly after receipt of the consent of shareholders of
the Company to the Directors' Plan and the Employees' Plans and after
approval of the Plans by the Assessment Clerk under Section 102 of the
Income Tax Ordinance.
20. Taxation
The Company intends to act as if the provisions of Section 102 of the
Income Tax Ordinance applies to the Directors' Plan. The Options to be
allotted to the Offerees to whom the provisions of Section 102 of the
Income Tax Ordinance may apply will be held by the Trustee and the lockup
under Section 102 and the rules made thereunder will apply to them and to
the shares underlying them.
The Offerees will, each pro rata, bear all tax obligations applying to
them, if any, due to the allotment and/or exercise of the Options and/or
to the effecting of transactions in the Options and/or the Shares.
B. Execution of Indemnification and Release agreements
1. Introduction
On November 11, 2002, the board of directors of the Company resolved,
following the approval of the audit committee, to approve the execution of
indemnification and release agreements to directors and officers of the
Company (the "recipients of the indemnification" or the "recipients of the
release", as the case may be).
2. Controlling Shareholders with a Personal Interest in the Transaction and
the Substance of Such Interest
Messrs. Rafael Aravot, Ahinoam Kra-Oz, Haim Schliefer, Gideon Missulawin,
Menachem Zenziper, and Arie Kraus have personal interest in the
transaction, as each of them is a recipients of the indemnification and a
recipient of the release.
3. Directors with Personal Interest and the Substance of Such Interest
All the members of the Company's board of directors i.e. Rafael Aravot,
Ahinoam Kra-Oz, Haim Schliefer, Gideon Missulawin, Menachem Zenziper, Arie
Kraus, Alex Tal, Tammy Gotlieb and Amiram Dagan have personal interest in
the transaction, as each of them is a member of the recipient of the
indemnification and a recipient of the release.
4. Reasons Given by Audit Committee and Board of Directors for Approval of
the Transaction
The Company wishes to promote deeper involvement and contribution of its
officers in its the business and management. For that purpose, the audit
committee and the board of directors decided to approve the grant and
execution of the indemnification and release agreements in order to ensure
a safe business environment for such officers, acting in their positions
in good faith.
5. Directors who took part in Deliberations of the Audit Committee and the
Board of Directors regarding Approval of the Transaction
All the members of the audit committee (i.e. Tami Gotlieb, Amiram Dagan
and Alex Tal) and all the members of the board of directors took part in
the deliberations of the audit committee regarding the approval of the
transaction.
6. Details of Transactions similar to or in the same class as the Transaction
- are there any?
N.A.
7. The Indemnification agreements
7.1 Under the proposed indemnification agreements, the Company will
irrevocably undertake to indemnify each of the recipients of the
indemnification against any debt or expense as detailed in
paragraphs (a) and (b) below, that was imposed upon him or her due
to an action, or an omission, made in the course of their duties as
an officer of the Company as due to an act done in the course of
acting or by virtue of a transaction with another corporation to
which he she or was appointed as a result of being an officer of the
Company:
(a) A financial obligation that was imposed in favor of another
person according to a court judgment, including a compromise
judgment or an arbitrator's decision that was approved by a
court.
(b) Reasonable litigation expenses, including attorney's fees,
that the officer or director incurred or was required to pay
by a court in a proceeding that was lodged against him by the
Company or in its name or by another person or in a criminal
proceeding in which he was acquitted or in a criminal
proceedings in which he was convicted of an offense that does
not require proof of criminal intention.
7.2 Without derogation from the above, our indemnification obligation
will not apply to any debt or expense that was imposed on a director
or officer for any of the following:
(a) Breach of the duty of loyalty, except for the breach of
loyalty in circumstances in which the officer acted in good
faith and had a reasonable basis to assume that the action
would not harm the Company.
(b) Breach of the duty to of care, which breach was committed
intentionally or rashly.
(c) An action with intent to derive unlawful personal gain.
7.3 The indemnification obligation, according to the indemnification
agreement will be limited to the indemnification for any debt or
expense incurred by the recipient of indemnification in connection
with the proceedings filed against him or her as a result of any of
the following events, directly or indirectly:
(a) An action taken by the recipient of indemnification or by the
Company related to the Company's contracts dealing with
purchasing or selling assets, receiving or granting rights in
any assets and/or receiving or granting any services;
For this matter - "an action related to the Company's
contracts" - including a breach of a contract and negotiations
towards entering a contract.
(b) An action taken by the recipient of indemnification with
respect to his or her duties on behalf of the Company, which
might be considered a tort against any person.
(c) A breach by the director or officer of the duties that apply
to the Company or other related companies, in connection with
the Company being a publicly traded company.
(d) A breach by the recipient of the indemnity or by others of the
duties that apply to the Company or corporations in which the
Company holds securities (the "Corporations"), in connection
with the Corporations' being publicly traded companies;
(e) A breach by the recipient of indemnification of the duties
that apply to the Company or the Corporations with respect to
its filing a prospectus or a report with a regulatory agency.
(f) An approval by the recipient of indemnification of
transactions specified in Chapter 5 of Section 6 of the
Companies Law.
(g) An action taken by the recipient of indemnification or by the
Company, related to the investment of funds by the Company in
any manner.
For this purpose, "an action related to the investment of
funds by the Company" - including locating investment
opportunities, analyzing investment offers, holding
negotiations before making investments, actions relating to
financing of investments, feasibility studies in respect of
investments and/or exercise or non-exercise of the investment.
7.4 The sum of the indemnification for all recipients of the
indemnification in the aggregate, for one set of events will not
exceed the NIS equivalent of four million US Dollars ($ 4,000,000).
7.5 The Company's obligation for indemnification, will apply to all
actions taken by a recipient of the indemnification as an officer of
the Company beginning on the date of his or her appointment as an
officer of the Company and until the date on which he or she no
longer acts as an officer of the Company.
8. The Release Agreements
8.1 According to the release agreements, the Company will release each
of its recipients of release, in accordance with Section 259 to the
Companies Law, from liability for any damage caused to the Company
as a result of a breach of the duty of care.
8.2 The release will not apply to the liability of the recipient of
release for damages caused to the Company as a result of:
(a) A breach of duty of loyalty, except for a breach of loyalty in
circumstances in which the officer acted in good faith and had
a reasonable basis to assume that the action would not harm
the Company.
(b) A breach of the duty to of care, committed intentionally or
rashly.
(c) An action with the intent to derive unlawful personal gain.
8.3 The release will apply to any actions taken by a recipient of a
release as an officer of the Company, starting on the date of his or
her appointment and until the end of their term in office.
C. General
1. Convening of the Meeting
1.1 The Meeting, wherein the agenda will include proposal for the
approval of the Special Private Offer to directors, the stock option
plans for employees and the approval of the indemnification and
release agreements, will be convened at the Daniel Hotel, 60 Ramat
Yam Street, Herzliya Pituach, on 17 December 2002 at 10:00 am.
1.2 The majority required at the Meeting for approval of the Special
Private Offer and delivery of the Indemnification and Release
agreements is an ordinary majority of the shareholders taking part
in the vote, provided that one of the following exists:
(1) The affirmative vote of the holders of a majority of the
ordinary shares represented at the Meeting, provided that at
least one third of the non-interested shareholders with
respect to each proposal represented and voting at the Meeting
are included in the majority (excluding the votes of the
abstaining shareholders); or
(2) The total shareholdings of the non-interested shareholders who
vote against the proposal do not represent more than 1% of the
voting rights in our Company.
1.3 Those who are entitled to take part and vote at the Meeting or at an
adjourned meeting will be shareholders of the Company registered in
the register of members of the Company at the end of the business
day of November 8, 2002 (hereinafter: the "Date of Determination"),
present at the meeting in person or by agent or proxy, in accordance
with the provisions of the articles of association of the Company.
1.4 The complete text of the proposals on the agenda of the Meeting as
well as the immediate disclosure, are available for inspection, upon
prior coordination with the Company's Secretary, in the Company's
offices, Sunday through Thursday between 9:00 and 17:00.
2. Powers of the Securities Authority
2.1 The date of convening of the Meeting as set forth above might be
postponed according to the instruction of the Securities Authority
or the instruction of such employee of the Securities Authority
authorized by it for such purpose (the "Authority") under Section 17
of the Private Offer Regulations and/or under Section 10 of the
Controlling Shareholders Regulations, as follows:
2.2 Within twenty one days of the date of filing of this report, the
Authority may instruct the Company to give details, information and
documents regarding the Special Private Offer under this report
within such time as it may prescribe, and may instruct the Company
to amend the report in such manner and within such time as may be
prescribed.
2.3 Where an instruction to amend the report is given as aforesaid, the
Authority may instruct the adjournment of the Meeting to another
date which will fall no earlier than three business days and no
later than twenty-one business days after the date of publication of
the amendment to the report.
2.4 The Company will file an amendment in accordance with such
instructions in the manner set forth in Section 2(a)(1) of the
Controlling Shareholders Regulations and/or Section 3(a)(1) of the
Private Offer Regulations, will send it to those shareholders to
whom the report was sent and will publish a notice setting out the
date of the Meeting, the fact that an amendment was made to the
report at the instruction of the Securities Authority, and the main
points of the amendment, unless the Securities Authority otherwise
instructs.
2.5 Where an instruction is given regarding adjournment of the date of
convening of the Meeting, the Company will give notice by immediate
report of such instruction.
3. Company Representative Responsible for Immediate Report
Ophra Levy-Mildworth, Adv.
13 Hamelacha Street, Rosh Ha'ayin
Tel: 9004113 - 03
Fax: 9030994 - 03
RoboGroup T.E.K Ltd.
Name and position of signatory for the Company: Ophra Levy-Mildworth, Company's
Secretary
Date of Execution: December 12, 2002
ROBOGROUP T.E.K. LTD.
(Registrant)
By: /s/ Rafael Aravot
---------------------------------
Rafael Aravot
Chief Executive Officer
Date: December 12, 2002