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 December, 2002
ELTEK LTD.
(Name of Registrant)
Sgoola Industrial Zone, Petach Tikva, 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- ---------------
FILED SOLELY FOR THE PURPOSE OF DEPOSITING A COPY OF THE REGISTRANT'S
ANNUAL REPORT TO SHAREHOLDERS WITH THE SECURITIES AND EXCHANGE COMMISSION
ELTEK LTD.
6-K Items
1. Eltek Ltd. Proxy Statement for Annual General Meeting to be held December 29,
2002.
2. Eltek Ltd. Proxy Card.
ITEM 1
ELTEK LTD.
November 29, 2002
NOTICE OF 2002 ANNUAL MEETING OF SHAREHOLDERS
Eltek Ltd. Shareholders:
We cordially invite you to our Annual General Meeting of Shareholders.
It will be held at 10 a.m. on Thursday, December 29, 2002 at our offices at 4
Drezner Street, Sgoola Industrial Zone, Petach Tikva, Israel.
The purpose of the meeting is to consider and vote upon the following
matters:
1. Adoption of our Amended and Restated Articles of Association to
incorporate changes made in accordance with the Israeli Companies Law;
2. The election of one Class I director for a term expiring in 2003, two
Class II directors for a term expiring in 2004 and two Class III
directors for a term expiring in 2005;
3. Approval and ratification of the terms of compensation for our outside
directors;
4. Approval and ratification of the terms of compensation for our
independent director;
5. Ratification of the grant of 30,000 stock options to the Chairman of
our Board of Directors;
6. Ratification of the grant of a bonus to the Chairman of our Board of
Directors;
7. Approval and ratification of the compensation of the Chairman of our
Board of Directors and the reimbursement of expenses to be incurred by
him;
8. Appointment of Somekh Chaikin as our independent auditors for the year
ending December 31, 2002;
9. Receipt and consideration of our Auditor's Report, Directors' Report
and Consolidated Financial Statements for the fiscal year ended
December 31, 2001; and
10. The transaction of any other business that may properly come before
the meeting.
The Board of Directors recommends that you vote in favor of all of the
proposals, which are described in the attached Proxy Statement.
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 48 hours prior to the meeting to be validly included in the
tally of ordinary shares voted at the meeting. Detailed proxy voting
instructions are provided both in the Proxy Statement and on the enclosed proxy
card.
Sincerely,
Nissim Gilam, Chairman
BY ORDER OF THE BOARD OF DIRECTORS
Arieh Reichart, Chief Executive Officer and Secretary
1134038.1
PROXY STATEMENT
This statement is being furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Eltek Ltd. to be voted at the
Annual General Meeting of Shareholders, or the Meeting, to be held on Thursday,
December 29, 2002 and any adjournment thereof. Shareholders will be asked to
vote upon: (i) the adoption of our Amended and Restated Articles of Association
(ii) the election of one Class I director, two Class II directors and two Class
III directors;(iii) the terms of compensation for our outside directors; (iv)
the terms of compensation for our independent director; (v) the grant of 30,000
stock options to the Chairman of our Board of Directors (vi) the grant of bonus
to the Chairman of our Board of Directors (vii) the compensation of the Chairman
of our Board of Directors and reimbursement of expenses to be incurred by him;
(viii) appointment of Somekh Chaikin, a member of KPMG, as our independent
auditors for the year ending December 31, 2002; and (ix) consideration and
receipt of our Auditor's Report, Directors' Report and Consolidated Financial
Statements for the fiscal year ended December 31, 2001. Our 2001 Annual Report
on Form 20-F, including our audited financial statements for the fiscal year
ended December 31, 2001, and the proxy card enclosed with this Proxy Statement
are being mailed to shareholders on or about November 29, 2002.
Shares eligible to be voted and for which a proxy card is properly
signed and returned at least 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 director and each proposition 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. 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.
As of November 26, 2002, the record date for determination of
shareholders entitled to vote at the Meeting, there were outstanding 4,855,651
ordinary shares. Each ordinary share entitles the holder to one vote. The
ordinary shares have a par value of NIS 0.6 per share. The presence of two
shareholders, holding at least fifty percent of our share capital voting rights,
represented in person or by proxy at the Meeting, will constitute a quorum.
Proposal 1 requires the affirmative vote of the holders of seventy-five percent
(75%) of the ordinary shares represented at the Meeting in person or by proxy
and voting thereon. Except with respect to proposal 1, an affirmative vote of
the holders of a majority of the ordinary shares represented at the Annual
General Meeting, in person or by proxy and voting thereon is required to approve
each of the proposals to be presented at the Meeting.
A broker who is the record owner of ordinary shares beneficially owned
by a customer will have discretionary authority to vote such ordinary shares in
the election of directors and all other proposals herein if the broker has not
received voting instructions from the beneficial owner by the tenth day before
the Meeting, provided that this Proxy Statement was transmitted to the
beneficial owner at least 15 days before the Meeting. Abstentions and broker
"non-votes" are not counted in determining outcomes of matters being acted upon.
They are counted only for determining a meeting quorum. A broker "non-vote"
occurs when a nominee holding ordinary shares of our company for a beneficial
owner does not vote on a particular proposal because the nominee does not have
discretionary voting power with respect to that proposal and has not received
instructions from the beneficial owner.
We have received indications from our principal shareholders (including
Joseph A. Maiman, Integral International Inc., A. Sariel Ltd., Ohad Maiman and
Michele Yankielowicz) and directors and officers, who together hold
approximately 42.3% of our issued and outstanding ordinary shares, that they
presently intend to vote for all of the nominees for director and in favor of
all of the proposals to be acted upon at the Meeting.
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 Securities and Exchange Commission
concerning the sending of proxies and proxy material to the beneficial owners of
our 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
enclosed self-addressed envelope to our transfer agent or to our registered
office in Israel at least 48 hours prior to the Meeting.
ADOPTION OF THE COMPANY'S AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
(Item 1 on the Proxy Card)
Our existing Articles of Association were filled with the Israeli
Companies Registrar on September 25, 1996. However, due to changes in Israel's
business and legal environment and the effectivness of the new Israeli Companies
Law as of February 1, 2000, our Articles of Association are outdated, and we
believe that they do not provide us or our shareholders with the flexibility
required to conduct our operations in the most efficient and productive manner.
Therefore we are adopting the new Articles of Association. The proposed Articles
of Association may be inspected without charge and copied at our offices located
at Sgoola Industrial Zone, P.O. Box 159 Petach Tikva, 49101, Israel.
Some of the more significant changes relative to the existing Articles
of Association, which are not intended to be exhaustive, include the following:
The Board of Directors, excluding the outside directors, will be divided
into three classes, with member of each class elected for staggered terms of
three years.
The Board of Directors will have the ability to declare dividends (in
cash or in kind) to shareholders without shareholder approval.
As permitted under the new Companies Law, the proposed Amended and
Restated Articles of Association will allow the Company, subject to certain
limitation, to indemnify and/or exempt in advance the Company's officers and
directors from liability due to a breach of their duty of care.
Under the existing Articles of Association and the Israeli law which
was in force until February 1, 2000, actions such as increases in the share
capital of the company, share splits and other recapitalizations required the
approval of at least 75% of the shareholders present and voting at a special
meeting of shareholders. As permitted under the new Companies Law, the proposed
Amended and Restated Articles of Association will require only a simple majority
of shareholders present and voting at any shareholders meeting for approval of
such actions.
As permitted under the new Companies Law, the Company will be permitted
to purchase its own shares under certain circumstances, which was previously
prohibited.
It is proposed that at the Meeting the shareholders adopt the following
resolution:
"RESOLVED, that the Amended and Restated Articles of
Association of the Company, be, and the same hereby are,
adopted and approved."
The affirmative vote of the holders of seventy-five percent (75%) of
the ordinary shares represented at the Meeting in person or by proxy and
entitled to vote will be necessary for approval of the proposal.
The Board of Directors recommends a vote FOR the foregoing resolution
ELECTION OF DIRECTORS
(Item 2 on the Proxy Card)
Subject to the approval of our Amended and Restated Articles Of
Association, our board of directors will be divided into three (3) classes. The
three classes are to be designated Class I, Class II, and Class III and will
consist of one director, two directors and the remaining directors (other than
outside directors), respectively. The term of office of the director in Class I
will expire at the end of the first Annual General Meeting after his or her
initial election; the term of office of the directors in Class II will expire at
the end of the second Annual General Meeting after their initial election; and
the term of office of the directors in Class III will expire at the end of the
third Annual General Meeting after their initial election. At each Annual
General Meeting after the initial classification of the Board, the class of
directors whose term expires at the time of such election will be elected to
hold office until the third succeeding Annual General Meeting. Each director
will hold office until the end of the Annual General Meeting at which his or her
term ends, or until his or her office is vacated pursuant to these Articles or
the Israeli Companies Law, which ever occurs first. In addition to these three
classes of directors, we have two "outside directors" as defined by the Israeli
Companies Law who hold office for a term of three years. All the members of our
board of directors, except the outside directors, may be reelected upon
completion of their term of office.
The Board of Directors proposes the election of (i) Mr. Jack Bigio to
serve as Class I director to hold office for one year until the Annual General
Meeting of Shareholders to be held in 2003, and until his successors are elected
and qualified, (ii) Messrs. David Banitt and Leo Malamud, to serve as Class II
directors to hold office for two years until the Annual General Meeting of
Shareholders to be held in 2004, and until their successors are elected and
qualified, and (iii) Messrs. Joseph A. Maiman and Nissim Gilam, to serve as
Class III directors to hold office for three years until the Annual General
Meeting of Shareholders to be held in 2005, and until their successors are
elected and qualified and. Each nominee is currently serving as a member of the
Board of Directors.
In the event the proposal to adopt the Amended and Restated Articles of
Association is not approved, the nominees for directors will be elected for a
one-year term.
Should any of the nominees be unavailable for election, the proxies
will be voted for a substitute nominee designated by the Board of Directors.
None of the nominees are expected to be unavailable.
Under the Company's Articles of Association, the affirmative vote of
the holders of a majority of the ordinary shares represented at the Meeting in
person or by proxy and entitled to vote and voting thereon will be necessary for
shareholder approval of the election as directors of Messrs. Gilam, Banitt,
Bigio, Maiman and Malamud. Set forth below is information about each nominee,
including age, position(s) held with our company, principal occupation, business
history and other directorships held.
Name Age Position
Nissim Gilam..................... 63 Chairman of the Board of Directors
David Banitt..................... 50 Director
Jack Bigio ...................... 38 Director
Joseph A. Maiman................. 56 Director
Leo Malamud...................... 49 Director
Nominees For Election As Director For Terms Expiring In 2003
Nissim Gilam has served as Chairman of our Board Of Directors since
December 1, 1998. Mr. Gilam has served as a director since January 1996 and
previously held office as a director and our chief executive officer during the
period January 1990 through March 1991. Since April 2002 Mr. Gilam has been
self-employed. From September 1993 until March 2002, he served as managing
director of Ney Agencies Ltd., an Israeli company that served as a sales agent
of raw materials and machinery sold by trading companies. From September 1987
through September 1993, he served as vice president-finance of Merhav M.N.F.
Ltd., an Israeli company that constructs turnkey projects in, among other
fields, refineries, energy and agriculture.
David Banitt an independent director, has served as a director since March
1997. Since August 2001, Mr. Banitt has served as chief executive officer of
Nano-OR Ltd. an Israeli start-up company engaged in the development of
electro-optics systems. Prior to joining Nano-OR and since January 2001, he was
self-employed. From September 1993 until January 2001, Mr. Banitt served as
president of Exsight Electro Optical Systems Ltd., an Israeli start-up company
engaged in the development of electro-optics systems. Prior thereto and from
September 1993, Mr. Banitt served as general manager of Nitzanim Initiative
Center and managed of the technological incubator and holding company. Mr.
Banitt holds a B.Sc. degree in Electronics Engineering from Tel Aviv University.
Jack Bigio has served as a director since May 2000. Since May 2002, Mr.
Bigio has served as chief executive officer of Ampal (Israel) Ltd., a public
holding company that trades on the Nasdaq Stock Market. From July 1995 until
April 2002 Mr. Bigio served as vice president-operations and finance of Merhav
M.N.F. Ltd. Prior thereto he served as an economist and executive assistant to
the president of Merhav M.N.F. Ltd. for five years. Mr. Bigio holds a B.A.
degree in Economics and Business Administration and an M.B.A. degree, both from
The Hebrew University of Jerusalem.
Joseph A. Maiman has served as a director since July 1988. Mr. Maiman has
served as president of Merhav M.N.F. Ltd. since August 1972. Since January 2002,
Mr. Maiman has served as the chairman of the board of directors of Israel 10
Channel Ltd. and since April 2002 Mr. Maiman has served as the chairman of the
board of directors of Ampal (Israel) Ltd. Mr. Maiman holds a B.A. degree in
Economics from University of Texas and an M.A. degree in Economics from Cornell
University.
Leo Malamud has served as a director since March 1998. Mr. Malamud has
served as vice president of Merhav M.N.F. Ltd. in charge of project financing
and the group's Latin American activities since 1996. Prior thereto and since
1986, Mr. Malamud served as senior vice president of M.I.C. Metropolitan
Investments Corporation, an Argentinean corporation engaged in financial
projects. Mr. Malamud holds a B.SC. degree in Industrial and Management
Engineering from the Technion, Haifa and an M.B.A. degree from McGill
University, Montreal.
The Board of Directors recommends a vote FOR the election of each
nominee for Director named above.
Outside Directors Continuing in Office
Revital Dgani, 46, has served as an outside director since December 2000.
Ms. Dgani has been an attorney for 19 years and has been self-employed since
January 2000. From April 1995 until December 1999, Ms. Dgani was in-house
counsel of Reved Ltd., an Israeli company engaged in engineering and
construction of residential and commercial buildings and whose shares trade on
the Tel Aviv Stock Exchange. Ms. Dgani received her qualification as a lawyer
and has been a member of the Israel Bar since 1981. Ms. Dgani holds a B.A.
degree in Law from Tel Aviv University. Ms. Dgani's term as an outside director
will expire in 2003.
Erez Shachar, 39, has served as an outside director since December 2000.
Mr. Shachar has served since July 1997 as President and Chief Executive Officer
of Nur Macroprinters Ltd., an Israeli company that manufactures wide and
superwide printing systems and whose shares are traded on the Nasdaq Stock
Market. From May 1995 until July 1997, Mr. Shachar held various positions at
Scitex Europe S.A. (Brussels). Between 1989 and 1992, Mr. Shachar was a software
engineer responsible for new product development for Scitex Corporation Ltd. in
Israel. Mr. Shachar holds a B.Sc. degree in Mathematics and Computer Science
from Tel Aviv University and an M.B.A. degree from Insead, Fontainebleau. Mr.
Shachar's term as an outside director will expire in 2003.
BOARD OF DIRECTORS AND COMMITTEES
Independent and Outside Directors
The Israeli Companies Law requires Israeli companies that have offered
their shares to the public in or outside of Israel to appoint at least two
outside directors. No person may be appointed as an outside director if the
person or the person's relative, partner, employer or any entity under the
person's control has or had, on or within the two years preceding the date of
the person's appointment to serve as outside director, any affiliation with the
company or any entity controlling, controlled by or under common control with
the company.
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 an outside director or may otherwise interfere with the
person's ability to serve as an outside director. If, at the time outside
directors are to be appointed, all current members of the Board of Directors are
of the same gender, then at least one outside director must be of the other
gender.
Audit Committee
The Companies Law provides that public companies must appoint an audit
committee. The responsibilities of the audit committee include identifying
irregularities in the management of the company's business and approving
related-party transactions as required by law. An audit committee must consist
of at least three members, and include all of the company's outside directors.
However, the chairman of the board of directors, any director employed by the
company or providing services to the company on a regular basis, any controlling
shareholder and any relative of a controlling shareholder may not be a member of
the audit committee. An audit committee may not approve an action or a
transaction with a controlling shareholder, or with an office holder, unless at
the time of approval two outside directors are serving as members of the audit
committee and at least one of the outside directors was present at the meeting
in which an approval was granted. Our audit committee is currently composed of
Ms. Revital Dgani and Messrs. David Banitt and Erez Shachar.
In addition, the Nasdaq Stock Market requires us to have at least three
independent directors on our board of directors and to establish an audit
committee independent of management. All of the directors serving on our audit
committee qualify as independent directors under the Nasdaq Stock Market
requirements and Ms. Dgani and Mr. Shachar as independent directors under the
Israeli Companies Law.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of November 16,
2001 regarding the beneficial ownership by (i) all shareholders known to us to
own beneficially more than 10% of our ordinary shares, (ii) each director and
(iii) all directors and executive officers as a group:
Percentage of
Number of Ordinary Shares Outstanding
Name Beneficially Owned (1) Ordinary Shares (2)
---------------------- -------------------
-----------------------------------------------------------
Joseph A. Maiman (3).................................... 1,395,496 28.56%
Integral International Inc. (3)......................... 1,068,396 21.8%
Nissim Gilam (4)........................................ 41,590 *
David Banitt............................................ -- --
Jack Bigio.............................................. --
--
Revital Dgani........................................... -- --
Leo Malamud............................................. -- --
Erez Shachar............................................ -- --
All directors and executive officers as a group
(12 persons) (5)........................................ 1,697,794 33.97%
--------------------
* Less than 1%
(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 issuable
upon exercise of options currently exercisable or exercisable within 60
days of November 26, 2002 are deemed outstanding for computing the
ownership 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) Based on 4,855,651 ordinary shares issued and outstanding as of
November 26, 2002.
(3) Of such shares, 327,100 Ordinary Shares are held directly by Mr.
Maiman, 1,040,645 Ordinary Shares are held of record by Integral
International Inc. ("Integral"), a Panama corporation controlled by Mr.
Maiman, and 27,751 Ordinary Shares are held of record by Integral's
wholly owned subsidiary, A. Sariel Ltd. Mr. Maiman may be deemed to be
the beneficial owner of the 1,068,396 ordinary shares held directly by
Integral International and A. Sariel. Mr. Maiman disclaims beneficial
ownership in 235,000 ordinary shares held by each of his son, Ohad
Maiman, and his sister, Michele Yankielowicz.
(4) Includes 20,000 ordinary shares subject to currently exercisable
options granted under our 2000 Stock Option Plan, at an
exercise price of $4.375 per share, which options expire in July 2005.
(5) Includes 23,333 ordinary shares issuable upon exercise of currently
exercisable stock options granted under our 1996 Stock Option Plan, and
89,333 ordinary shares issuable upon exercise of currently exercisable
stock options granted under our 2000 Stock Option Plan.
Directors and Executive Compensation
The following table sets forth all compensation we paid with respect to
all of our directors and executive officers as a group for the year ended
December 31, 2001:
Salaries, fees,
commissions and bonuses -----------------------
Pension, retirement
and similar benefits
All directors and executive officers
as a group, consisting of twelve persons.................. ------------------------ $110,000
$754,000
During the fiscal year ended December 31, 2001, we paid each of our
outside and independent directors an annual fee of NIS 18,200 ($4,120) and a per
meeting attendance fee of NIS 1,200 ($270). We paid Nissim Gilam, Chairman of
our Board of Directors, a management fee of $3,500 per month. In the first
quarter of 2001, we paid Mr. Gilam a bonus of NIS 90,000 ($20,380) for his
services during the nine-month period ended December 31, 2000.
As of December 31, 2001, our directors and executive officers as a
group, consisting of twelve persons, held options to purchase an aggregate of
162,000 ordinary shares. Of such options, 28,000 options have an exercise price
of $1.75 and 134,000 options have an exercise price of $4.375. The options vest
over a three-year period. Of such options, 14,000 ordinary shares expire in May
2003, options to purchase 14,000 ordinary shares expire in November 2004 and
options to purchase 134,000 ordinary shares expire in July 2005. All of the
options were issued under our 1996 and 2000 Stock Option Plans.
Related Party Transactions
During 1994, our manufacturing facility experienced a mechanical
failure, for which we filed a claim with our insurer in the amount $815,461 to
cover damages flowing from this failure. In December 1994, we agreed to sell the
claim against the insurer for $467,000 to certain of our shareholders which
included Integral International, Inc., Zilnat Holdings B.V., Dr. Ehud Geller
(our former chairman of the board of directors), Samuel Friedrich, Litani
Capital Management Ltd. (a former shareholder which transferred its rights under
this agreement to LCM Holdings LDC), Mahir Reiss and Herve Debache. Under the
agreement with these shareholders, as amended, they have the right to receive,
after deduction of legal expenses, up to a maximum of $650,000 of any funds
recovered from our insurer. Any remaining funds will belong to us. In 1997 the
District Court of Tel Aviv dismissed the complaint for lack of standing based on
the fact that we had sold the right to claim damages from our insurer to our
shareholders. We appealed the decision to the Supreme Court, which overruled the
decision on January 20, 1999, allowing the parties to amend their pleadings, and
remanded the case to the District Court. The district court dismissed the case
for lack of evidence of the cause of the mechanical failure, and awarded trial
expenses and legal fees to the insurer. Both parties filed motions to appeal
with the Supreme Court that are currently pending.
During 2001, we obtained travel services worth NIS 132,000 ($30,000)
from Tour Darom Travel and Tours Ltd., a travel agency that was owned by Mr.
Joseph Maiman, our principal beneficial shareholder and director. In July 2001,
Mr. Maiman sold his interest in Tour Darom Travel and Tours Ltd.
COMPENSATION FOR THE COMPANY'S OUTSIDE DIRECTORS
(Item 3 on the Proxy Card)
Pursuant to the Companies Law, an outside director is entitled to
compensation and to reimbursement of expenses as provided in the Companies
Regulations (Rules Regarding Compensation to an Outside Director), 5760-2000, or
the Companies Regulations, promulgated under the Companies Law. The Companies
Regulations provide that an outside director is entitled to receive from the
company an annual fee and a per meeting attendance fee for his or her
participation at a meeting of the board of directors or any board committee
(including written resolutions, meetings of committees of the Board of
Directors, or convened by our Chief Executive Officer), up to the amounts
specified in the Companies Regulations. An outside director is otherwise
prohibited from receiving any other consideration, directly or indirectly, in
connection with his or her service as an outside director.
Ms. Revital Dgani and Mr. Erez Shachar were elected to serve as our
outside directors at our Annual General Meeting of Shareholders held on December
6, 2000. They will serve for a term of three years until the Annual General
Meeting of Shareholders to be held in 2003 and until their successors are
elected and qualified.
During the year 2000, each of Ms. Dgani and Mr. Shachar were paid an
annual fee of NIS 12,700 ($2,700) and a per meeting attendance fee of NIS 1,125
($230). During the year 2001 each of Ms. Dgani and Mr. Shachar were paid an
annual fee of NIS 18,200 ($3,890) and a per meeting attendance fee of NIS 1,200
($260). During the year 2002 each of Ms. Dgani and Mr. Shachar were paid an
annual fee of NIS 16,050 ($3,430) and a per meeting attendance fee of NIS 1,200
($260).
Our audit committee and board of directors ratified and approved the
payments to our outside directors for the years 2000, 2001 and 2002.
For the year ending December 31, 2003, our board of directors
determined to compensate Ms. Dgani and Mr. Shachar, by paying each of them an
annual fee and a per meeting attendance according to the fixed amount specified
in the Companies Regulations.
The Israeli Companies Law requires that the terms of compensation to
outside directors be approved by the audit committee, the board of directors,
and thereafter, the General Meeting of Shareholders, unless such payments are
determined according to the fixed amount specified in the Companies Regulations.
It is therefore proposed that at the Annual General Meeting the
shareholders adopt the following resolution:
"RESOLVED, that payments to our outside directors during the years
2000, 2001 and 2002, are herby ratified, confirmed and approved."
Under the Companies Law the affirmative vote of the holders of a
majority of the ordinary shares represented at the Annual General Meeting in
person or by proxy and entitled to vote and voting thereon will be necessary for
shareholder approval of the foregoing resolution.
The Board of Directors recommends a vote FOR the foregoing resolution.
COMPENSATION FOR THE COMPANY'S INDEPENDENT DIRECTOR
(Item 4 on the Proxy Card)
The Israeli Companies Law requires that the terms of compensation to
directors, be approved by the audit committee, the board of directors, and
thereafter, the General Meeting of Shareholders.
Mr. David Banitt has served as our director since March, 1997, and is
a member of our Audit Committee. Mr. Banitt qualifies as independent director
under the Nasdaq Stock Market requirements. Our audit committee and board of
directors determined to compensate Mr. Banitt by paying him an annual fee and a
per meeting attendance fee equal to the compensation received by our outside
directors.
During the year 2000 Mr. Banitt was paid an annual fee of NIS 12,700
($2,715) and a per meeting attendance fee of NIS 1,125 ($240). During the year
2001 Mr. Banitt was paid an annual fee of NIS 18,200 ($3,890) and a per meeting
attendance fee of NIS 1,200 ($260). During the year 2002 Mr. Banitt was paid an
annual fee of NIS 1,200 ($260) and a per meeting attendance fee of NIS 1,200
($260).
Our audit committee and board of directors ratified and approved the
payments to our independent director for 2000, 2001 and 2002 fiscal years, and
approved, subject to his election by our shareholders at this Meeting, to pay
our independent director annual remuneration of NIS 18,960 ($4,050) and a per
meeting (including written resolutions, meetings of committees of the Board of
Directors, or convened by our Chief Executive Officer) attendance fee of NIS 949
($205).
It is proposed that at the Meeting the shareholders adopt the following
resolution:
"RESOLVED, that payments to our independent director during the 2000,
2001 and 2002 fiscal years are herby ratified, confirmed and approved,
and that the decision of the audit committee and board of directors of
the Company to pay our independent director an annual remuneration of
NIS 18,960 ($4,050) and a per meeting attendance fee of NIS 949 ($205)
be and hereby is ratified and approved."
Under the Companies Law the affirmative vote of the holders of a
majority of the ordinary shares represented at the Meeting in person or by proxy
and entitled to vote and voting thereon will be necessary for shareholder
approval of the foregoing resolution.
The Board of Directors recommends a vote FOR the foregoing resolution.
Grant of Stock Options to our Chairman
(Item 5 on the Proxy Card)
The Companies Law requires that the terms of compensation to directors,
including grants of options, should be approved by the audit committee, the
board of directors, and thereafter, the general meeting of shareholders. In
consideration for his valuable contribution to our company, Mr. Nissim Gilam,
Chairman of the Board of Directors was granted stock options to purchase a total
of 30,000 ordinary shares under our 2000 Stock Option Plan. The exercise price
of the options is $4.375 per share, the fair market value of our ordinary shares
on August 2, 2000. The options vest ratably over a three-year period from the
date of grant, are exercisable beginning August 2, 2001 and will terminate on
August 1, 2005.
Our audit committee and board of directors ratified and approved the
grant of stock options to purchase a total of 30,000 ordinary shares under our
2000 Stock Option Plan to Mr. Gilam.
It is therefore proposed that at the Meeting the shareholders adopt the
following resolution:
"RESOLVED, that the grant of options to purchase 30,000 ordinary shares
to Mr. Nissim Gilam, Chairman of the Board of Directors, at an exercise
price of $4.375 per share be, and the same hereby is, ratified,
confirmed and approved."
The affirmative vote of the holders of a majority of the ordinary
shares represented at the Meeting in person or by proxy and entitled to vote and
voting thereon will be necessary for shareholder approval of the foregoing
resolution.
The Board of Directors recommends a vote FOR the foregoing resolution.
Grant of Bonus to our Chairman
(Item 6 on the Proxy Card)
The Companies Law requires that the terms of compensation to directors,
be approved by the audit committee, the board of directors, and thereafter, the
general meeting of shareholders.
Mr. Nissim Gilam has served as Chairman of our Board of Directors since
December 1, 1998. During the year 2000, in consideration for his valuable
continuing contribution to the management and development of our company since
his appointment as Chairman, a bonus in the amount of NIS 90,000 ($20,380) was
granted to Mr. Gilam. Our audit committee and board of directors approved and
ratified the grant of the bonus. It is therefore proposed that at the Meeting
the shareholders adopt the following resolution:
"RESOLVED, that the grant of the bonus in the amount of NIS 90,000
($20,380) to Mr. Nissim Gilam, Chairman of the Board of Directors, is
herby ratified, confirmed and approved."
The affirmative vote of the holders of a majority of the ordinary
shares represented at the Meeting in person or by proxy and entitled to vote and
voting thereon will be necessary for shareholder approval of the foregoing
resolution.
The Board of Directors recommends a vote FOR the foregoing resolution.
APPROVAL OF COMPENSATION FOR OUR CHAIRMAN AND REIMBURSEMENT
OF EXPENSES TO BE INCURRED BY HIM
(Item 7 on the Proxy Card)
The Companies Law requires that the terms of compensation to directors
be approved by the audit committee, the board of directors, and thereafter, the
general meeting of shareholders. For the continuing contributions of Mr. Nissim
Gilam, our Chairman of the Board, to the management and development of our
company since his appointment as Chairman, our audit committee and Board of
Directors decided, subject to his election at this Meeting, to compensate him by
approving the payment of a monthly fee to Mr. Gilam in the amount of $3,500 plus
value added tax, effective as of April 2000.
Moreover, our audit committee and Board of Directors decided, subject
to his election at this Meeting, to reimburse Mr. Gilam for various expenses
incurred by him in connection with his service as Chairman of the Board in an
annual amount of up to NIS18,000 ($3,850) effective as of June 2002.
It is therefore proposed that at the Meeting the shareholders adopt the
following resolution:
"RESOLVED, that the resolution of the Board of Directors to pay Mr.
Nissim Gilam, Chairman of the Board of Directors, a monthly fee in the
amount of $3,500 plus value added tax and to reimburse him for expenses
incurred by him in connection with his service as Chairman of the Board
in an annual amount of up to NIS18,000 ($3,850) be, and the same hereby
is, adopted and approved."
The affirmative vote of the holders of a majority of the ordinary
shares represented at the Meeting in person or by proxy and entitled to vote and
voting thereon will be necessary for shareholder approval of the foregoing
resolution.
The Board of Directors recommends a vote FOR the foregoing resolution.
APPOINTMENT OF AUDITORS
(Item 8 on the Proxy Card)
Our Annual General Meeting of Shareholders first appointed Somekh
Chaikin, independent public accountants and a member of KPMG, as our auditors in
1996. Somekh Chaikin has no relationship with us or any of our affiliates except
as auditors. As a result of Somekh Chaikin's knowledge of our operations and
reputation in the auditing field, the Board of Directors believes that the firm
has the necessary personnel, professional qualifications and independence to act
as our auditors. The Board of Directors has again recommended the selection of
Somekh Chaikin as our auditors for the period ending December 31, 2002 and
recommends that the shareholders approve the recommendation. The remuneration of
Somekh Chaikin will be determined by the Board of Directors according to the
volume and nature of their services.
The following resolution will be offered by the Board of Directors at
the Meeting:
"RESOLVED, that the recommendation of our Board of Directors to
appointment Somekh Chaikin to conduct the annual audit of our financial
statements for the year ending December 31, 2002 is hereby approved."
The affirmative vote of the holders of a majority of the ordinary
shares represented at the Meeting in person or by proxy and entitled to vote and
voting thereon will be necessary for shareholder approval of the foregoing
resolution.
The Board of Directors recommends a vote FOR the foregoing resolution.
RECEIVE AND CONSIDER THE AUDITOR'S REPORT, DIRECTORS'
REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
(Item 9 on the Proxy Card)
At the Meeting, our Auditor's Report, Directors' Report and the
Consolidated Financial Statements for the fiscal year ended December 31, 2001
will be presented. The affirmative vote of the holders of a majority of the
ordinary shares represented at the Meeting in person or by proxy and entitled to
vote will be necessary to consider and receive our Auditors' Report, Directors'
Report and the Consolidated Financial Statements for the fiscal year ended
December 31, 2001.
The Board of Directors recommends a vote FOR the consideration and
receipt of the Auditor's Report, Directors' Report and Consolidated Financial
Statements for the fiscal year ended December 31, 2001.
OTHER MATTERS
The Board of Directors does not intend to bring any matters before the
Meeting other than those specifically set forth in the Notice of the Meeting and
knows of no matters to be brought before the Meeting by others. If any other
matters properly come before the Meeting, it is the intention of the persons
named in the accompanying proxy to vote such proxy in accordance with the
judgment of the Board of Directors.
By Order of the Board of Directors,
Arieh Reichart
Chief Executive Officer and Secretary
Dated: November 29, 2002
ITEM 2
ELTEK LTD.
4 Drezner Street
Sgoola Industrial Zone
Petach Tikva, 49101 Israel
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) Arieh Reichart and Nissim Gilam, or
either of them, attorneys or attorney of the undersigned, for and in the name(s)
of the undersigned, with power of substitution and revocation in each to vote
any and all Ordinary Shares, par value NIS 0.6 per share, of Eltek 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 Wednesday, December 29, 2002 at 10:00
a.m. at the principal offices of the Company, 4 Drezner Street, Sgoola
Industrial Zone, Petach Tikva, 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):
(1) Adoption of the Company's Amended and Restated Articles of Association
to incorporate changes made in accordance with the Israeli Companies
Law.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(2) Election of one Class I director for a term expiring in 2003, two
Class II directors for a term expiring in 2004 and two Class III
directors for a term expiring in 2005.
In the event that the first proposal is not passed the election of the
nominees will be for a one year term.
[ ] FOR all nominees listed at right (except as marked to contrary at
right)
Class I Directors:
JACK BIGIO
Class II Directors:
DAVID BANITT
LEO MALAMUD
Class III Directors:
JOSEPH MAIMAN
NISSIM GILAM
[ ] WITHHOLD AUTHORITY to vote for all nominees at right
INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name at right.
(3) Approval and ratification of the terms of compensation for our
outside directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Approval and ratification of the terms of compensation for our
independent director.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Ratification of the grant of 30,000 stock options to the Chairman
of our Board of Directors .
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) Ratification of the grant of a bonus to the Chairman of our Board
of Directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(7) Approval and ratification of the compensation to be paid to the
Chairman of our Board of Directors and the reimbursement of
expenses to be incurred by him.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) Appointment of Somekh Chaikin, Independent Accountants as the
Company's independent auditors for the period ending December 31,
2002.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(9) To consider and approve the Auditors and Directors Reports and
the Financial Statements of the Company for the fiscal year ended
December 31, 2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(PLEASE SIGN ON REVERSE SIDE)
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE. IN THE ABSENCE OF
SUCH SPECIFICATION, THE SHARES REPRESENTED BY THIS PROXY CARD WILL BE VOTED FOR
(i) THE ELECTION OF THE SEVEN NOMINEES FOR DIRECTOR AND (ii) PROPOSALS 2 THROUGH
7 SET FORTH ON THE REVERSE. ON ANY OTHER BUSINESS THAT MAY PROPERLY COME BEFORE
THE ANNUAL GENERAL MEETING, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
JUDGMENT OF THE PERSONS NAMED ABOVE AS PROXIES.
Dated_________________________________2002
--------------------------------------
Signature(s)
--------------------------------------
Signatures, if held jointly
(Please sign exactly as name(s) appear(s)
hereon. When signing as attorney, executor,
administrator, trustee, guardian, or as an
officer signing for a corporation, please
give full title under signature.)
SIGNATURES
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.
ELTEK LTD.
------------------------------------
(Registrant)
By: /s/Arieh Reichart
--------------------------------
Arieh Reichart
President and Chief Executive Officer
Date: December 4, 2002