SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 20-F/A
Amendment No. 1
[ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)
OR (g) OF THE SECURITIES EXCHANGE ACT
OF 1934
Or
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from to
Commission file number: 0-19435
ROBOGROUP T.E.K. LTD.
(Exact name of Registrant as specified in its charter
and translation of Registrant's Name into English)
Israel
(Jurisdiction of incorporation or organization)
13 Hamelacha Street, Afeq Industrial Park, Rosh Ha'Ayin, 48091, Israel
(Address of principal executive offices)
Securities registered or to be registered pursuant
to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
------------------- -----------------------------------------
None N/A
Securities registered or to be registered pursuant
to Section 12(g) of the Act:
Ordinary Shares, NIS 0.5 Par Value
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section
15(d) of the Act: None
(Title of Class)
Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report:
Ordinary Shares, par value NIS 0.5 per share
as of December 31, 2001..........................11,221,152
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark which financial statement item the registrant has elected
to follow:
Item 17 [X] Item 18 [ ]
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Senior Management
The following table lists our executive officers and directors:
Name Age Position
Rafael Aravot ...................... 48 Chairman of the Board, Chief Executive Officer
and Director
Noam Kra-Oz ........................ 48 Managing Director and Director
Haim Schleifer ..................... 48 Managing Director and Director
Eldad Chereshnia ................... 43 Joint General Manager of the Educational Sector
Moshe Turner ....................... 49 Joint General Manager of the Educational Sector
Joseph Biran ....................... 56 General Manager of Yaskawa Eshed Technology Ltd.
Alon Shacham ....................... 43 General Manager of MemCall
Anat Katz-Ifergan .................. 34 Chief Financial Officer
Ophra Levy-Mildworth................ 34 Corporate Attorney and Secretary
Gideon Missulawin .................. 62 Director
Menachem Zenziper .................. 59 Director
Arie Kraus ......................... 46 Director
Alex Tal ........................... 56 Director
Amiram Dagan ....................... 48 Outside Director
Tami Gotlieb ....................... 45 Outside Director
Messrs. Aravot, Kra-Oz, Schleifer, Missulawin, Zenziper, Kraus and Tal will
serve as directors until our 2002 annual general meeting of shareholders. Mr.
Dagan and Ms. Gotlieb were elected to serve as our outside directors at our
annual general meeting of shareholders which took place on December 20, 2001.
They will serve in such office pursuant to the provisions of the Israeli
Companies Law for three-year terms until our 2004 annual general meeting of
shareholders. Thereafter, their office may be renewed for only one additional
three-year term.
Rafael Aravot has been our Managing Director since our formation in 1982
and Chief Executive Officer and Chairman of the Board since February 2001. Since
1999 Mr. Aravot has served as a member of our Compensation Committee. Mr. Aravot
is a director of Yaskawa Eshed Technology Ltd., Chairman of the board of MemCall
Ltd. and MemCall LLC. Mr. Aravot received an M.B.A. from Tel Aviv University and
a B.Sc. degree in Mechanical Engineering from the Technion Israel Institute of
Technology in Haifa.
Noam Kra-Oz has been our Managing Director since February 2001 and our
Joint Managing Director from 1992 until 2001. He has also been a director since
December 1983. Mr. Kra-Oz is a director of Yaskawa Eshed Technology Ltd.,
Intelitek Inc., Robotec Technologies Ltd., Computras Computerized Training
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Systems Ltd., Computras Marketing Training Systems (1988) Ltd. and Eshed Robotec
B.V. Mr. Kra-Oz received a B.Sc. in Pharmacology from the Hebrew University of
Jerusalem.
Haim Schleifer has been our Managing Director since February 2001 and our
Joint Managing Director of Research and Development and Pedagogical Department
from 1996. Mr. Schleifer is director of Eshed Robotec B.V., MemCall Ltd. and
MemCall LLC. Mr. Schleifer received an M.B.A. from Tel Aviv University and a
B.Sc. in Electronic Engineering from the Technion Israel Institute of Technology
in Haifa.
Eldad Chereshnia has served as our Joint Managing Director of the
Educational Sector since April 2000. From March 1996 until March 2000, he served
as our Vice President - International Marketing. From 1988 to February 1995, he
was General Manager of our subsidiary, Robotec Technologies Ltd. Mr. Chereshnia
serves as a director of our subsidiaries Robotec Technologies Ltd., Intelitek
Inc. and Computras Computerized Training Systems Ltd., Mr. Chereshnia received
his B.A. in Computer Science and Mathematics from Tel Aviv University.
Moshe Turner has served as a Joint General Manager of the Educational
Sector since April 2000. From February 1995 he served as General Manager of
Robotec Technologies Ltd. Mr. Turner was Managing Director for Elbit ATI of the
Elbit Group from November 1993 until January 1995. From February 1991 until
November 1993, he was Vice Managing Director of the Recycling Division of
American-Israeli Paper Mills Ltd. Mr. Turner serves as a director of the
subsidiaries Robotec Technologies Ltd., Intelitek Inc. and Computras
Computerized Training Systems Ltd., Mr. Turner received an M.Sc. in Business
Administration and a B.A. in Economics from Bar Ilan University.
Joseph Biran has served as our Vice President R&D and Operations since
April 1994, and as General Manager of Yaskawa Eshed Technology Ltd. since
December 1996. From 1990 until 1994, he was Research and Development Manager of
Electric Fuel Co. Mr. Biran received his B.Sc. in Mechanical Engineering from
the Technion Institute of Technology in Haifa and also received an M.B.A. from
Tel Aviv University.
Alon Shacham has served as the General Manager of MemCall since August
2000. Mr. Shacham also served as a management member at Information Storage
Devices - Israel, and as a V.P. Marketing at Seagull Semiconductors. Mr. Shacham
received his B.Sc. in Computer Science from the Technion in Haifa.
Anat Katz-Ifergan has served as our Chief Financial Officer since October
1999. She also serves as Chief Financial Officer of all our subsidiaries. From
November 1993 until August 1998 she was Chief Financial Officer and Controller
of Computer Stores MSZ Ltd. Mrs. Katz-Ifergan received her B.A. in Economics and
Accounting from the Bar-Ilan University and her C.P.A. license in Israel in June
1993.
Ophra Levy-Mildworth has served as our Legal Counsel and Company's
Secretary since February 2001. She also serves as the legal Counsel and Company
Secretary of all our subsidiaries. Until September 2000, she was a lawyer in the
law firm of Lahav, Litvak-Abadi. Ms. Levy received her B.A. in Law and Economics
from Tel-Aviv University.
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Gideon Missulawin has been our director since 1983. He served as Chairman
of the Board from December 1985 until February 2001. Since 1999 Mr. Missulawin
has served as a member of our Compensation Committee. Mr. Missulawin is a
director of Vernon Investments Company Ltd. and Newcorp. Ltd. and a number of
foreign companies, mainly in South Africa, some of which are family companies.
Mr. Missulawin holds a B.Sc. in Chemical Engineering from the University of
Witwatersrand in Johannesburg, South Africa and a Master of Business Leadership
(MBL) from the University of South Africa. He undertook post graduate work at
the Weitzman Institute of Science in Rehovot, Israel. He is a graduate member of
the Institution of Chemical Engineers in England, a member of the South African
Institute of Chemical Engineers and a Professional Engineer registered in 1969
with the South African Council for Professional Engineers.
Menachem Zenziper has been our Director since 1983. Mr. Zenziper is a
Director of Zenziper Company for Import of Grain and Fodder Ltd. Mr. Zenziper
received a B.Sc. in Industrial Engineering and Master Degree in Management
Science from the Technion Israel Institute of Technology, Haifa.
Arie Kraus has been a director since December 1983 and a member of our
audit committee. Mr. Kraus served as our corporate Secretary from August 1991
until June 1994. Until 1997 he was responsible for our new building project in
Rosh Ha'Ayin. From December 1983 to 1997, Mr. Kraus was Manager of Shivrug Ltd.
Mr. Kraus received a B.Sc. in Production Engineering from Tel Aviv University.
Alex Tal has been a director since January 2001. Since July 2000 until June
2001, he has served as manager of our New-Ventures Sector. From 1996 until
January 2000, Mr. Tal served as the Israeli Navy General Commander. From 1993
until 1995 he was the Representative of the Israeli Ministry of Defense and the
Israeli Defense Forces in Chile.
Amiram Dagan has served as an outside director since February 2002. Mr.
Dagan is a member of our audit committee. Mr. Dagan was a commander of Israel
Air Force Systems Department, Vice President in Nice Systems Ltd., and presently
serves as development and Operation of the Hetz Hakesef Company. Mr. Dagan is
Graduate of the Technion in Haifa, and received Master degree in Political
Science and National Security from the University of Haifa. He also has a master
degree in Business Administration from Tel Aviv University.
Tami Gotlieb has served as an outside director since February 2002. Ms.
Gotlieb is a member of our audit committee. Ms. Gotlieb is a Manager in Investec
Clali - Management and Underwriting Ltd., an independent business development,
investment banking and financial consultant company. Ms. Gotlieb also serves as
an outside director of Sahar Development and Investments Ltd., Yishpro Leasing
Building Company Ltd., Carmel Investments Group Ltd., and as a director of
Emilia Development Ltd., T.R.A. Radio Tel Aviv Ltd., Incredimail Ltd. the
company for management of the provident funds of Mercantile Bank. Ms. Gotlieb is
a Graduate in International Relations of the Hebrew University in Jerusalem and
has a master degree in Economics from the University of Indiana, USA.
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Ms. Smadar Shilo and Mr. Boaz Helman completed their service as outside
directors in February 2002. Ms. Shilo and Mr. Helman served as outside directors
since February 1997 and were no longer eligible to serve as outside directors
under the Israeli Companies Law.
Noam Kra-Oz and Arie Kraus are brothers. There are no other family
relationships among the members of our Board of Directors.
All directors (except for our outside directors) hold office until the next
annual general meeting of shareholders and until their successors have been
elected. Officers serve at the discretion of the Board of Directors, subject to
the terms of any employment agreement between them and us.
Election of Directors
Pursuant to our articles of association, all of our directors, other than
our outside directors, are elected at our annual general meeting of shareholders
by a vote of the holders of a majority of the voting power represented and
voting at such meeting. Outside directors are elected for a three-year term. All
the members of our Board of Directors (except the outside directors as detailed
below) may be reelected upon completion of their term of office. In the
intervals between our annual general meetings, our Board of Directors may elect
new directors, whether to fill vacancies or in addition to those of their body,
but only if the total number of directors does not at any time exceed twelve,
including our outside directors. Any director so appointed occupies his position
until the next annual general meeting and may be reelected for an additional
term. All of our current directors were elected by our shareholders at our
annual general meeting of shareholders of 2001, including Mr. Dagan and Ms.
Gotlieb, our new outside directors.
Alternate Directors
Our articles of association provide, as allowed by Israeli law, that any
director may, by written notice to us, appoint another person to serve as an
alternate director (subject to the approval of a majority of the other Directors
in a written resolution or at the next meeting of the Board of Directors) and
may cancel such appointment. The term of appointment of an alternate director
may be for one meeting of the Board of Directors, or for a specified period, or
until notice is given of the termination of the appointment. No director
currently intends to appoint any other person as an alternate director.
However, the Israeli Companies Law stipulates that a person not qualified
to be appointed as a director, as well as a person who serves as director or
alternate director, shall not be appointed and shall not serve as alternate
director.
An alternate director shall be treated like a director. The appointment of
an alternate director does not negate the responsibility of the director as
whose alternate he was appointed, and the responsibility will be in effect
taking into account the circumstances of the event, including the circumstances
under which the alternate director was appointed and the length of his term of
service.
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Independent and Outside Directors
The Israeli Companies Law requires Israeli companies with shares that have
been offered 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. The term affiliation includes:
o an employment relationship;
o a business or professional relationship maintained on a regular basis;
o control; and
o service as an officer holder.
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.
Outside directors are elected by shareholders. The shareholders voting in
favor of their election must include at least one-third of the shares of the
non-controlling shareholders of the company who are present at the meeting. This
minority approval requirement need not be met if the total shareholdings of
those non-controlling shareholders who vote against their election represent 1%
or less of all of the voting rights in the company. 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.
If a position of an outside director is vacated and there are less than two
outside directors, a special meeting of shareholders will be held to vote for
election of an outside director.
Any committee of the board of directors which is authorized to act on
behalf 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 Companies Law and is otherwise prohibited from receiving any other
compensation, directly or indirectly, in connection with such service.
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. In addition, we are required to adopt an audit committee charter.
Approval of Related Party Transactions Under Israeli Law
40
The Companies Law codifies the fiduciary duties that "office holders,"
including directors and executive officers, owe to a company. An office holder's
fiduciary duties consist of a duty of care and a duty of loyalty. The duty of
care requires an office holder to act at a level of care that a reasonable
office holder in the same position would employ under the same circumstances.
The duty of loyalty includes avoiding any conflict of interest between the
office holder's position in the company and his personal affairs, avoiding any
competition with the company, avoiding exploiting any business opportunity of
the company in order to receive personal gain for the office holder or others,
and disclosing to the company any information or documents relating to the
company's affairs which the office holder has received due to his position as an
office holder. Each person listed as a director or executive officer in the
table under " -- Directors and Senior Management" above is an office holder.
Generally, under the Companies Law, all arrangements as to compensation of
office holders who are not directors require approval of our board of directors,
and the compensation of office holders who are directors must be approved by our
audit committee, board of directors and, subject only to certain exemptions, our
shareholders.
The Companies Law requires that an office holder promptly disclose any
personal interest that he or she may have and all related material information
known to him or her, in connection with any existing or proposed transaction by
us. The duty of disclosure shall not apply when the personal interest originated
only from the personal interest of the office holder's relative or the
controlling shareholder's relative in a non-extraordinary transaction. That is a
transaction in the ordinary course of business, on market terms, and unlikely to
have a material impact on the company's profitability, assets and liabilities. A
relative is defined as a spouse, siblings, parents, grandparents, descendants,
spouse's descendants and the spouses of any of the foregoing. Some transactions,
actions and arrangements involving an office holder (or a third party in which
an office holder has an interest) must be approved by the board of directors or
as otherwise provided for in a company's articles of association, as not being
adverse to the company's interest. In the case of an extraordinary transaction,
such a transaction must be approved by the audit committee and by the board of
directors itself. A director who has a personal interest in a matter, which is
considered at a meeting of the board of directors or the audit committee, may
not be present during the board of directors or audit committee discussions and
may not vote on this matter, unless the majority of the members of the board or
the audit committee have a personal interest, as the case may be or in the event
such an action is an ordinary action between the company and its director or an
ordinary action in which the director has a personal interest. In the event that
the majority of the members of the Board of Directors have personal interests in
the proposed transaction, the approval of the general meeting is also required.
The Companies Law also provides that extraordinary transactions between a
public company and a controlling shareholder, or extraordinary transactions in
which a controlling shareholder of the company has a personal interest but which
are between a public company and another entity, require the approval of the
audit committee, of the board of directors and of the shareholders. Moreover,
the terms of compensation of a controlling shareholder must be approved by the
audit committee, the board of directors and by the shareholders. The shareholder
approval for an extraordinary transaction and the terms of compensation of a
controlling shareholder must include at least one-third of the shareholders who
have no personal interest in the transaction and are present at the meeting. The
transaction can be approved by shareholders without this one-third approval, if
the total shareholdings of those shareholders who have no personal interest and
voted against the transaction do not represent more than one percent of the
41
voting rights in the company. If a shareholder participates in that vote, he
shall inform the company before the vote whether or not he has a personal
interest in the approval of the transaction. If the shareholder did not inform
as aforesaid, then he shall not be counted.
However, under the Companies Regulations (Relief From Related Party
Transactions), 5760-2000, promulgated under the Companies Law and amended in
January 2002, certain transactions between a company and its controlling
shareholder(s) do not require shareholder approval.
In addition, pursuant to the recent amendment to these regulations,
directors' compensation and employment arrangements do not require the approval
of the shareholders if both the audit committee and the board of directors agree
that such arrangements are for the benefit of the company. If the director or
the office holder is a controlling shareholder of the company then, the
employment and compensation arrangements of such director or office holder do
not require the approval of the shareholders providing certain criteria is met.
The above exemptions will not apply if one or more shareholder, holding at
least 1% of the issued and outstanding share capital of the company or of the
company's voting rights, objects to the grant of such relief, provided that such
objection is submitted to the company in writing not later than seven (7) days
from the date of the filing of a report regarding the adoption of such
resolution by the company pursuant to the requirements of the Israeli Securities
Law. If such objection is duly and timely submitted, then the compensation
arrangement of the directors will require shareholders' approval as detailed
above.
The Companies Law provides that an acquisition of shares in a public
company must be made by means of a tender offer if as a result of the
acquisition the purchaser would become a 25% shareholder of the company. This
rule does not apply if there is already another 25% shareholder of the company.
Similarly, the Companies Law provides that an acquisition of shares in a public
company must be made by means of a tender offer if as a result of the
acquisition the purchaser would become a 45% shareholder of the company, unless
there is a 50% shareholder of the company. Regulations under the Companies Law
provide that the Companies Law's tender offer rules do not apply to a company
whose shares are publicly traded outside of Israel, if pursuant to the
applicable foreign securities laws and stock exchange rules there is a
restriction on the acquisition of any level of control of the company, or if the
acquisition of any level of control of the company requires the purchaser to
make a tender offer to the public shareholders.
Exemption, Insurance and Indemnification of Directors and Officers
The Companies Law provides that an Israeli company cannot exculpate an
office holder from liability with respect to a breach of his duty of loyalty,
but may exculpate in advance an office holder from his liability to the company,
in whole or in part, with respect to a breach of his duty of care. Our articles
of association provide that, subject to any restrictions imposed by corporate
law, we may enter into a contract for the insurance of the liability of any of
our office holders with respect to:
o a breach of his duty of care to us or to another person;
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o breach of his duty of loyalty to us, provided that the office holder
acted in good faith and had reasonable cause to assume that his act
would not prejudice our interests; or
o a financial liability imposed upon him in favor of another person in
respect of an act performed by him in his capacity as an office
holder.
In addition, we may indemnify an office holder against:
o a financial liability imposed on him in favor of another person by any
judgment, including a settlement or an arbitrator's award approved by
a court in respect of an act performed in his capacity as an office
holder; and
o reasonable litigation expenses, including attorneys' fees, expended by
such office holder or charged to him by a court, in proceedings we
institute against him or instituted on our behalf or by another
person, or in a criminal charge from which he was acquitted, all in
respect of an act performed in his capacity as an office holder.
These provisions are specifically limited in their scope by the Companies
Law, which provides that a company may not indemnify an office holder, nor enter
into an insurance contract which would provide coverage for any monetary
liability incurred as a result of certain improper actions.
Our Article of Association provides that such indemnification may be given
retroactively and may be given in advance provided that an undertaking made in
advance to indemnify an officer will be limited to the types of occurrence that
in the opinion of the board of directors of the Company may be anticipated at
the time of giving the undertaking for indemnification, and for an amount that
the board will determine is reasonable in the circumstances of the matter.
Pursuant to the Israeli Companies Law, amendment in our articles of
association concerning indemnification of, and procurement of insurance coverage
and exemption for our office holders must be approved by our shareholders.
Exculpatory insurance and indemnification arrangements with an office
holder who is not a director must be approved by the audit committee and the
board of directors, while the same arrangement with directors must be approved
by the shareholders as well and the same arrangement with a controlling
shareholder must be approved by special majority of the shareholders who don't
have an interest in the arrangement. See "Item 6A. Directors, Senior Management
and Employees - Directors and Senior Management - Approval of Related Party
Transactions Under Israeli Law". Our shareholders have not as yet approved an
undertaking to indemnify officers nor have our shareholders approved the
required amendment to our articles of association. We currently maintain
directors and officers liability insurance with a per claim and aggregate
coverage limit of $7.5 million including costs and expenses
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B. Compensation
During the year ended December 31, 2001, the aggregate remuneration paid to
our directors as a group (nine persons) was approximately NIS 2.8 million
($634,000), and the aggregate remuneration paid to our officers as a group (six
persons) was approximately NIS 2.5 million ($576,000). Such amounts include
pension, retirement and similar benefits.
During the year ended December 31, 2001, we paid each of our outside
directors $445 per month and $276 per meeting attended for serving in such
capacity.
We provide some of our executive officers (Messrs. Aravot, Kra-Oz,
Schleifer, Chereshnia, Turner, Biran, Shacham, Katz and Levy, etc.) with
automobiles at our expense.
As of December 31, 2001, our executive officers who are not also directors,
as a group, consisting of six persons, held options to purchase an aggregate of
30,000 ordinary shares, at an exercise price of $0.5 per share. Such options
expire on 2006. All options were issued under our 1996 Stock Option Plan. See
"Share Ownership - Stock Option Plans."
Under the Companies Law, the board of directors must approve all
compensation arrangements of office holders who are not directors. Directors'
compensation arrangements also require audit committee approval before board
approval and shareholder approval.
C. Board Practices
Audit Committee
Our audit committee is currently composed of Ms. Tami Gotlieb and Messrs.
Amiram Dagan and Arie Kraus. The responsibilities of the audit committee
include: (i) examining the manner in which management ensures and monitors the
adequacy of the nature, extent and effectiveness of accounting and internal
control systems; (ii) reviewing prior to publication the statutory accounts and
other published financial statements and information; (iii) monitoring
relationships with our independent auditors, ensuring that there are no
restrictions on the scope of the statutory audit, making recommendations on the
auditors' appointment and dismissal, and reviewing the activities, findings,
conclusions and recommendations of the independent auditors; (iv) reviewing
arrangements established by management for compliance with regulatory and
financial reporting requirements; and (v) reviewing the scope and nature of the
work of the internal auditing unit.
The audit committee is authorized generally to investigate any matter
within the scope of its responsibilities and has the power to obtain from the
internal auditing unit, our independent auditors or any other officer or
employee any information that is relevant to such investigations.
The Israeli Companies Law provides that public companies must appoint an
audit committee composed of directors. The responsibilities of the audit
committee also include approving related-party transactions as required by law.
Under the Israeli Companies 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
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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, or an
action or a transaction in which the controlling shareholder or the office
holder have a personal interest in, 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.
Internal Audit
The Israeli Companies Law requires the board of directors of a Public
Company to appoint an internal auditor. The internal auditor shall be appointed
by the proposal of the audit committee. A person who does not satisfy the
Israeli Companies Law's independence requirements may not be appointed as an
internal auditor. In addition, the Israeli Companies Law requires that any of
the following persons wouldn't serve as the internal auditor: an office holder
or a shareholder that hold at least 5% of the company's capital or of the rights
to vote or have at least the ability to appoint at least one director of the
company or the ability to appoint the general manager, and any relative of the
office holder and the shareholder, or the auditor of the company and any person
on behalf of him. Moreover, the internal auditor can't have any other position,
not with the company, that might be in conflict of interests with his position
as internal auditor of the company. The role of the internal auditor is to
examine, among other things, the compliance of the company's conduct with
applicable law and orderly business practice. Mr. Yitzhak Mishar has served as
our internal auditor since August 1994. Our internal auditor complies with the
requirements of the Israeli Companies Law.
Employment Agreements
On January 1997, we entered into three-year employment agreements with
Messrs Aravot, Kra-Oz and Schliefer. The agreements provide for a base salary
and a package of benefits including an annual bonus. In 2000, we renewed the
agreements for additional three-year periods with the approval of our Board of
Directors and the audit committee. In 2001 the employment agreements were
amended to reflect that the salaries of Messrs. Aravot, Kra-Oz and Schliefer
were reduced by approximatly15%. The reduction in compensation was approved at
our Annual General Meeting of Shareholders in December 2001.
D. Employees
As of January 1, 2002, we and our subsidiaries, excluding our U.S.
subsidiary, Intelitek Inc., employed 115 people. Of these employees, 34 were
engaged in production, operations and technical support, 32 in research and
development, 6 in training, 21 in sales and marketing, 2 in technical writing
and 20 in management and general administration. Of such employees, 21 were
employed by our 50% owned subsidiary Yaskawa Eshed Technology Ltd. As of January
1, 2002, Intelitek Inc. employed 38 people.
Our employees in Israel have personal employment contracts. Certain
provisions of the collective bargaining agreements between the Histadrut
(General Federation of Labor in Israel) and the Coordinating Bureau of Economic
Organizations (including the Industrialists Association) are applicable to some
of our Israeli employees by an extension order of the Israeli Ministry of
45
Labor. These provisions mainly concern the length of the workday, minimum daily
wages for professional workers, contributions to a pension fund, insurance for
work-related accidents, procedures for dismissing employees, determination of
severance pay and other conditions of employment. Furthermore, under the
collective bargaining agreement the wages of our Israeli employees are partially
linked to the Israeli Consumer Price Index, or CPI. We generally provide our
Israeli employees with benefits and working conditions in excess of the required
minimums.
In October 2001, our Educational Sector began implementing cost-cutting
measures to improve the sector's profitability by decreasing its expenses by
more than $1 million in 2002. This will be achieved primarily by reducing
employees' salaries and employment-terms (such as mobile-phones expenses, social
activities for employees, holiday presents, etc.)
Israeli employees and employers are required to pay predetermined sums to
the National Insurance Institution, which is similar to the United States Social
Security Administration. The aggregate payments in 2001 amounted to
approximately 14% of wages, with the employee contributing 9% of his wages and
the employer the remainder.
Three of our directors are employed full-time by us.
E. Share Ownership
Three following table sets forth certain information as of June 19, 2002
regarding the beneficial ownership by each of our directors and executive
officers:
Number of
Ordinary Shares Percentage of
Beneficially Outstanding
Name Owned (1) Ordinary Shares (2)
---- -
Raphael Aravot ...................................... 878,042(4) 7.8%
Noam Kra-Oz (3) ..................................... 706,478(4) 6.3%
Haim Schleifer ...................................... 701,412(4) 6.3%
Eldad Chereshnia..................................... 26,000(4) *
Moshe Turner......................................... 8,000(4) *
Joseph Biran......................................... --
Alon Shacham......................................... --
Anat Katz-Ifergan.................................... --
Ophra Levy-Mildworth................................. --
Menachem Zenziper ................................... 1,236,960(4) 11.0%
Gideon Missulawin ................................... 745,287(4) 6.6%
Arie Kraus (3) ...................................... 762,177(4) 6.8%
Alex Tal............................................. --
Amiram Dagan......................................... --
Tami Gotlieb......................................... --
-----------
* Less than 1%.
46
(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 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 11,224,152 outstanding ordinary
shares (including 494,321 shares held in treasury) and includes 33,200
ordinary shares issuable upon the exercise of currently exercisable
options granted under our stock option plan, at an exercise price of
$0.50 per share.
(3) Mr. Kraus and Mr. Kra-Oz are brothers and together hold 3,273 shares.
(4) During the years 2000 and 2001, 6 of our directors repaid the full
amount of the loans which were provided to them by RTL for the purpose
of purchasing our shares under the terms of a private placement made
to affiliated parties. Upon repayment of the loans, 700,000 shares
that were held in trust were transferred to these directors.
1996 Stock Option Plan
Options to Purchase Securities from Registrant or Subsidiaries
On February 9, 1998, we issued 405,000 options to a trustee on behalf of 35
employees of ours and our subsidiaries pursuant to our 1996 stock option plan.
Each option confers the right to purchase one ordinary share upon cash payment
of the exercise price.
Commencing on the date of grant, each grantee may exercise 40% of the
options and every year commencing 1999 until 2001, up to an additional 20% of
the options issued to the trustee on behalf of the grantee.
The calculation of the number of options that may be exercised at each date
will be made on a cumulative basis, provided that the number of options
exercised shall not exceed the number that the holder is entitled to exercise at
such date. The options will expire on December 31, 2006.
The right of an option holder to exercise options is contingent on his or
her continuing to be our employee or an employee of a subsidiary at the exercise
date. If the option holder ceases to be an employee at any exercise date, the
grantee may not exercise the options which are exercisable at such time and the
right granted to the option holder with regard to such exercisable options and
any options which will become exercisable in the future, will expire.
Notwithstanding the foregoing, should an option holder cease to be an
employee as a result of death, dismissal or resignation because of poor health,
the holder or the holder's legal heirs, as the case may be, may, for a period of
six months following the termination of employment, exercise any unexercised
vested outstanding options on the date the holder ceased to
47
be an employee, provided, however, that such exercise may not occur after the
expiration date of the options.
In the event that the right of the option holder to exercise options issued
on the grantee's behalf expire, these options will revert to the trustee. We may
notify the trustee to transfer such options or portion thereof, to an employee
of ours or a subsidiary under our control at that time and provided that the
said employee is not an interested party and will not become an interested party
following this issuance, as the term "interested party" is defined in the
Israeli Securities Regulations (Issue of Securities in a Registered Company
which are not Issued to the Public) 1992 and in paragraph 5 of the TASE's
regulations of register of securities for trade.
During the period January 2001 through June 2002 we issued 33,200 of our
ordinary shares to employees as a result of the exercise of stock options.
48
ITEM 19. EXHIBITS
Index to Exhibits
Exhibit Description
3.1* Memorandum of Association of the Registrant
3.2*** Articles of Association of the Registrant
4.1*** Specimen of Ordinary Share Certificate
10.1*** Asset Purchase Agreement, dated October 29, 2000, between
Davenport Industries, LLC and the Registrant
10.2** 1996 Employee Stock Option Plan
99.1 Certification by Chief Executive Officer Pursuant to 18
U.S.C. Section 1350, As Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
99.2 Certification by Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, As Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
99.3 Certification by Chief Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
99.4 Certification by Chief Financial Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
-------------------
* Filed as an exhibit to our registration statement on Form F-1, registration
number 06-2-90176 filed with the Securities and Exchange Commission and
incorporated herein by reference.
** Filed as an exhibit to our registration statement on Form S-8, registration
number 333-8158 filed with the Securities and Exchange Commission and
incorporated herein by reference.
*** Filed as an exhibit to our Annual Report on Form 20-F for the year ended
December 31, 2000 and incorporated herein by reference.
49
SIGNATURES
The registrant hereby certifies that it meets all of the requirements
for filing on Form 20-F and that it has duly caused and authorized the
undersigned to sign this amended annual report on its behalf.
ROBOGROUP T.E.K. LIMITED
BY: /s/ Rafael Aravot
-----------------------------------
Rafael Aravot, Chairman of the Board
and Chief Executive Officer
BY: /s/ Haim Schleifer
-----------------------------------
Haim Schleifer, Director
Date: November 20, 2002
50
EXHIBIT INDEX
Exhibit No. Description of Exhibit Page No.
----------- ------------------------------------------------------------- --------
3.1* Memorandum of Association of the Registrant
3.2*** Articles of Association, as amended, of the Registrant
4.1*** Specimen of Ordinary Share Certificate
10.1*** Asset Purchase Agreement, dated October 29, 2000,
between Davenport Industries, LLC and the Registrant
10.2** 1996 Employee Stock Option Plan
99.1 Certification by Chief Executive Officer Pursuant to 18
U.S.C. Section 1350, As Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
99.2 Certification by Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, As Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
99.3 Certification by Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
99.4 Certification by Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
-------------
* Filed as an exhibit to our registration statement on Form F-1,
registration number 06-2-90176 filed with the Securities and
Exchange Commission and incorporated herein by reference.
** Filed as an exhibit to our registration statement on Form S-8,
registration number 333-8158 filed with the Securities and Exchange
Commission and incorporated herein by reference.
*** Filed as an exhibit to our Annual Report on Form 20-F for the year
ended December 31, 2000 and incorporated herein by reference.
51