Source - RNS
RNS Number : 7531L
Frutarom Industries Limited
05 October 2016
 

Frutarom Industries Ltd.

 

("the Company")

 

 

Hereby submitted is an immediate report on a material private offering and a non-material private offering of the Company's securities in accordance with the Securities Law, 1969 (the "Securities Law"); the Securities Regulations (Private Offering of Securities in a Listed Company), 2000 ("Private Offering Regulations"); and the Companies Law, 1999 (the "Companies Law"); an immediate report in accordance with the Securities Regulations (Periodic and Immediate Reports), 1970 ("Reports Regulations") and an outline as set forth in the Securities Regulations (Details of an Outline of an Offer of Securities to Employees), 2000 (the "Outline Regulations")

 

for the offering of Options to Mr. Ori Yehudai, who serves as the President and Chief Executive Officer of the Company and to 44 additional employees and officeholders of the Company and of the Company's affiliated companies, in accordance with section 15B of the Securities Law and the Outline Regulations as well as according to the Private Offering Regulations and the Reports Regulations

 

hereby offered are

 

17,957 options unregistered for trade ("the Options") to Mr. Ori Yehudai who serves as the President and the Chief Executive Officer of the Company ("the President") and 44 additional employees and officeholders of the Company and the Company's affiliated companies (jointly "Offeree(s) "). Of the Options, 5,387 Options are hereby granted to the President, 3,600 Options are hereby granted to four other officeholders of the Company ("the Officeholders"), and 8,970 are hereby granted to other employees who are not Officeholders. The Options are exercisable into 17,957 registered ordinary Company shares of NIS 1.00 par value each (the "Shares" or "Underlying Shares"), subject to the adjustments as detailed in the Plan (as defined below).

 

Assuming that all the Options will be exercised into Shares, the shares will comprise approximately 0.03% of the Company's issued and paid up share capital and approximately 0.03% of the voting rights therein on the grant date (following the grant) and approximately 0.03% of the Company's issued and paid up share capital and the voting rights therein on a fully diluted basis, as detailed in Section 1.1 below.

 

The Options granted under this outline and report (the "Outline" or "Outline and Report") are offered to the Offerees free of consideration.

 

The Outline and Report are also submitted in accordance with the Private Offering Regulations with respect to a non-material private offering for 44 employees and officeholders in the Company and in the Company's related companies and with respect to a material private offering (as defined in the Private Offering Regulations) for the President (jointly, the "Offering") and in accordance with Regulation 37A3 to the Reports Regulations with respect to the President.  Details required under the Sixth Schedule to the Reports Regulations relating to the compensation to the President (the "Report") are included in Chapter 6 of this Outline and Report.

 

The Offering concerning the allocation of Options to Offerees who are not the President, in accordance with the terms of this Outline and Report, was approved by the Compensation Committee on August 10, 2016 and by the Company's Board of Directors ("Board of Directors") on August 14, 2016. The Offering concerning the allocation of options to Officeholders is in accordance with the Company's Compensation Policy.

 

The Offering concerning the allocation of Options to the President in accordance with the terms of this Outline and Report is in accordance with the President's terms of employment and the Company's Compensation Policy. For further details regarding the President's terms of employment, see the Company's immediate report dated June 27, 2013. For details on the Company's Compensation Policy, see the Company's report on the matter dated December 29, 2013.

 

The quantity of Options granted to all of the Offerees was approved by the Compensation Committee on September 28, 2016 and by the Board of Directors on October 3, 2016.

 

 

October 5, 2016



Table of Contents

 


Page

Chapter 1 - Introduction

4

1.1    The Offered Options

4

1.2    The Offerees and determining entitlement

5

1.3     Permits and approvals with respect to the outline

6



Chapter 2 -Details of the Offering

7

2.1    Granting the Options

7

2.2    Exercise of Options

7

2.3    The exercise procedure

7

2.4    Adjustment of rights and instructions for protecting Offerees

8

2.5    Restrictions on exercising Options - termination of employment

10

2.6    Transferability of Options and Underlying Shares

11

2.7   Taxation implications for Option allocation, their exercise into shares and sale of Underlying Shares with respect to employees who are Israeli residents

11

2.7.1 General

11

2.7.2 Taxation applicable to Options under the provisions of section 102 to the Ordinance   and minimal trust period

12

2.8    Consideration for the offered Options

13

2.9    Economic value of the Options

13

2.10  Agreements between Offerees and other shareholders

 

13

Chapter 3 - The Underlying Shares

14

3.1    Voting rights

14

3.2    Rights to dividends and to the distribution of bonus shares

15

3.3    Distribution of Assets

18

3.4    Appointment of directors

18

3.5    Notice of general meetings

18

3.6    General meetings of Company shareholders

18

3.7    Transfer of shares

20

3.8    Increasing share capital and changes to rights attached to Company shares

20



Chapter 4 - Details on the Company's Share Price

22

 

Chapter 5 - Reference to Financial Statements

23

 

Chapter 6 - Material Private Offering to the President and the Sixth Addendum to the Reports Regulations

24

6.1    The Options allocated according to this report and the Company's share capital

24

6.2    Information regarding the price of Company shares

26

6.3    Fair value of the Options

26

6.4    Consideration and the method by which it was determined

26

6.5    Personal interest in approval of the offer to the President

26

6.6    Required authorizations

26

6.7    Agreements between the President and other shareholders

26

6.8    The date of granting Options to the President

26

6.9    Additional details under the Private Offering Regulations and regulation 37A3 and the Sixth Schedule to the Reports Regulations regarding the President

27


Chapter 1 - Introduction

 

1.1    The Offered Options

 

         The quantity of offered Options - According to this Outline and Report 17,957 Options  not registered for trade are offered without any consideration and exercisable into  17,957 shares, subject to adjustments as detailed in the Plan (as defined below).

 

         Allocation of Options - The Options based on this Outline may be allocated no earlier than the elapse of 14 business days following the submission of the Outline and no later than the date of submission of the Company's 2016 annual periodic report or the date fixed for submission of such report by law, whichever earlier (the "Final Date for Allocation").

 

         Pursuant to a taxation ruling the Company received from the tax authorities on November 23, 2011 (the "Taxation Ruling"), allocation of options under section 102 of the Income Tax Ordinance [New Version] 1961 (the "Ordinance") is conditional upon the Underlying Shares being held in trust for at least 18 months before being transferred to the Offerees. The Options will be granted for each Offeree only if on that date he fills a position in the Company or is engaged with it under agreement, whichever the case.

 

         The Options allocated based on this Outline will be exercisable into shares which will be allocated from dormant shares being held or to be held by the Company.

 

         Percentage of the Company's share capital - The shares arising from the exercise of the offered Options will comprise approximately 0.03% of the Company's issued and paid up share capital and approximately 0.03% of its voting rights on the allocation date (following the allocation), and approximately 0.03% of the Company's issued and paid up share capital and of its voting rights on a fully diluted basis (fully diluted on the assumption that all the securities convertible to Company shares are exercised into shares).

 

         Exercise price - The Options are allocated free of consideration. Each Option will be exercisable into one share in return for payment of an exercise price of NIS 66.60 per share ("Exercise Price"). The Exercise Price is equal to one third of the average purchase price paid by the Company for the dormant shares (the price attributable to dormant shares available to the Company for options which have expired is one third the average purchase price paid by the Company for acquisition of all the remaining dormant shares for the purpose of this option grant).

 

            Vesting Period - The "Vesting Period" of the Options will be as follows:

 

         (a)     1/3 of the Options will be exercisable starting October 1, 2017; subject to the provisions of section 2.7 below;

 

         (b)     1/3 of the Options will be exercisable starting October 1, 2018; and

 

         (c)     1/3 of the Options will be exercisable starting October 1, 2019.

        

         Subject to the provisions of paragraph 2.5 below, the Vesting Period will be considered as only a period in which employee-employer relations exist between the Offeree and the Company or an affiliated company, or a period in which the Offeree is an officeholder or director or a service provider for the Company or an affiliated company, as the case may be. Unless otherwise resolved by the Board of Directors, there are no employee-employer relations between an Offeree and the Company during a period in which the Offeree is on unpaid leave.

 

         Exercise period - Subject to the terms of the plan, including paragraphs 2.2 and 2.5 below, the Options will be exercisable once their Vesting Period has elapsed and up until October 1, 2022 ("Exercise Period").

 

         Expiration of Options - All Options will expire at the end of the Exercise Period and will cease to provide Offerees and/or their heirs any rights at all relating to the Options, including the right to purchase the Underlying Shares ("Option Expiry Date").  Furthermore, if the Options had been allocated through a trustee, the trusteeship will end on the Option Expiry Date.

 

         Instructions on acceleration - The Board of Directors may give instructions to accelerate the Vesting Periods with respect to any or all Options allocated under the Plan, or with respect to removing restrictions relating to the exercise of the Options, all subject to the provisions of law, the Taxation Ruling and the Company's Compensation Policy.

 

         In accordance with the terms of the Plan, the Plan will be implemented and administered by the Board of Directors or, subject to the provisions of the Companies Law, by the Company's Compensation Committee.

 

         For more information on the offered Options and Underlying Shares - see chapters 2 and 3 below.

 

1.2       The Offerees and determining entitlement

 

1.2.1    The Offerees are the President and 44 additional employees and Officeholders of the Company and the Company's affiliated companies. This Offering is addressed to all the Offerees in accordance with the resolutions of the Company's Compensation Committee and the Board of Directors as detailed in paragraph 1.3 below such that each Offeree is offered to  receive free of consideration the number of Options specified in his allocation document.

 

1.2.2    The Offeree under the material private offering is the President. Within the framework of the material private offering the President will be allocated 5,387 Options exercisable to 5,387 ordinary Company shares of NIS 1.00 par value each. This offer is addressed to the President as part of his terms of office and employment and in accordance with the Company's Compensation Policy.

 

            The President is not an interested party by virtue of his holdings, and will not become an interested party by virtue of the Offer the subject of this Report.

           

            To the best of the Company's knowledge, the President has personal interest in the consideration by virtue of his being the Offeree of the material private offering.   

 

1.2.3    Four of the Offerees under the non-material private offering are Officeholders of the Company to whom shall be allocated in the framework of the non-material private offering 3,600 Options exercisable into 3,600 ordinary Company shares of NIS 1.00 par value each. The offering to the officeholders is in accordance with the Company's Compensation Policy.

 

1.2.4    All other Offerees under the non-material private offering are employees who are not officeholders.

 

For purposes of convenience, the President, the four officeholders and the other employees will hereafter be referred to collectively as "the Offerees".

 

1.3    Permits and approvals with respect to the Outline

 

         The Company has received all permits and approvals required by law for the offer of options under this Outline.

        

         On January 30, 2012 the Company's Board of Directors resolved to adopt an option plan for employees and officeholders of the Company and/or in its related companies, as may be amended from time to time, ("the Plan"), as set forth in the Immediate Report regarding a private material offer and a non-material private offer which was issued by the Company on January 31, 2012. The Plan was submitted to the Israel Tax Authority on January 31, 2012.

 

         Options granted to the President pursuant to this Outline and Report go towards the deferred equity component of the annual bonus constitute in accordance with the President's terms of employment and the Company's Compensation Policy.

        

         Allocation of the Options to Officeholders relates to the deferred equity component of the annual bonus in accordance with the Company's Compensation Policy.

 

         Allocation of the Options to Offerees, under the Plan in accordance with this Outline and Report, was approved by the Compensation Committee and Board of Directors on September 28, 2016 and October 3rd, 2016 respectively, subject to fulfillment of all procedures required by law.

 

         The Company's shares are registered for trade on the Tel Aviv Stock Exchange.

 

         The Options offered based on this Outline are not registered and will not be registered for trade on any stock exchange.



 

 

Chapter 2 - Details of the Offering

 

2.1    Granting the Options

 

         Following the elapse of 14 business days from the date on which this Outline is submitted the Company will allocate the Options to Offerees and submit an allocation document for each Offeree to sign.

 

         The Options will be allocated to Offerees who are residents of Israel in accordance with the capital gains track prescribed in paragraph 102(B)(2) to the Ordinance and will be deposited in the hands of a trustee ("the Trustee").  For Offerees who are not residents of Israel the laws of their countries of residence will apply.

 

         The Company will inform the Offerees of publication of this Outline on the date of its publication or immediately thereafter through legally permissible means.

          

2.2    Exercise of Options

 

         The Options offered based on this Outline will be exercisable into shares as detailed in paragraph 1.1 above and in paragraph 2.3 below (for details regarding the Underlying Shares see Chapter 3 below).

 

         The Vesting Period and Exercise Period of the Options allocated to each Offeree will be as detailed in paragraph 1.1 above.

 

         An Offeree will be entitled to exercise the Options allocated him in whole or in part on any business day at his discretion starting from the date on which the Options are exercisable as detailed above, and in any event no later than the Options Expiry Date.

 

         Notwithstanding the aforesaid, exercise of Options will be subject to applicable law, including with respect to the prohibition of use of inside information (see paragraph 2.6 below, Transferability of Options and Underlying Shares, concerning additional restrictions). Furthermore, the exercise of Options may not be conducted on the record date for the distribution of bonus shares, offer by way of rights, dividend distribution, stock merge, stock split or capital reduction (each of these to be referred to: "Company Contingency"). If the ex-date of a Company Contingency falls prior to the record date of a Company Contingency, the exercise of Options may not be conducted on such an ex-date.

 

2.3    The Exercise Procedure

 

         The exercise of Options by Offerees shall be done by giving written notice sent to the Company at its registered office (and to the Trustee, if relevant) regarding exercise of the Options, worded as prescribed by the Company from time to time, and to  include, inter alia, the number of Options that the Offeree wishes to exercise ("Exercise Notice"), along with payment of an amount equal to the Exercise Price multiplied by the number of exercised Options, if and inasmuch as the Offeree is required to pay this amount. The day on which the Exercise Notice arrives at the Company together with said amount shall be deemed the exercise date of the Options to which the Exercise Notice refers (the "Exercise Date").        

        

         The Company will manage a registry of option holders which will list the names of the option holders, their addresses and the number of options registered in their names.  All transfers of ownership of options as permitted according to paragraph 2.6 below will also be listed in the registry. 

 

         Exercise of Options will be in accordance with the specific terms by which they were allocated and subject to the conditions of the Plan, applicable law  and the Taxation Ruling, including with respect to the prohibition of use of inside information (see paragraph 2.6 below for additional restrictions on Transferability of Options and Underlying Shares).

 

         An Offeree will not hold the rights of shareholders with respect to a share arising from the exercise of the Option allocated to him under the Plan as long as he hasn't exercised the Option into a share, paid the Exercise Price in full in accordance with the terms contained in this Outline, and such exercise hasn't been registered in the Company's shareholder registry. He will, however be granted protection as specified in paragraph 2.4 below.

 

         Underlying Shares will be equal in rights to existing shares in the Company's share capital for all intents and purposes, as they would be on the allocation date of those same shares or the Exercise Date in the case of dormant shares, and will be subject to the provisions of the Company's Articles of Association.  Underlying Shares will be entitled to any dividend or other benefit, where the date of record for receiving such occurs on the date of the exercise of the Options or subsequently, in the name of the Offeree or the Trustee, whichever relevant.

 

2.4    Adjustment of Rights and Instructions for Protecting Offerees

 

         The adjustments to be implemented are as follows:

 

2.4.1    Bonus shares, stock split or merge - Should the Company distribute bonus shares and the date of record for their distribution ("Bonus Date") occur after the allocation date of the Options but before the Exercise Date, the Exercise Price per each Option will not change, but the number of shares to which each Offeree will be entitled on the Exercise Date will increase by the number of shares to which each Offeree would have been entitled as bonus shares had he exercised the Option on the eve of the Bonus Date, and the number of reserved shares shall also increase accordingly. Adjustments similar to those prescribed in this section will be made in the event of a split (or merge) of Company shares.

 

2.4.2    Offer of rights - In the case of an offer of rights by the Company to its shareholders (including by means of an offer of convertible securities) after the allocation date of the Options but before the Exercise Date, the number of shares to which every Offeree is entitled on the Exercise Date will increase to reflect the benefit component embodied in the rights, and the number of reserved shares will increase accordingly.  The value of the benefit component embodied in said rights and the adjustment required as stated will be determined in accordance with the ratio between the share's closing price on the TASE on the last day of trading prior to the ex-date and the base price of the share "ex-rights".

 

2.4.3   Notwithstanding what is stated in paragraphs 2.4.1 and 2.4.2 above, an Offeree will not be entitled to exercise an option for a fraction of a share. The number of shares to which the employee is entitled when exercising an option based on the Plan will be rounded (up or down as the case may be) to the nearest whole number.

 

2.4.4    Dividend Distribution - If the Company distributes a dividend (in cash or in kind) to all of its shareholders and the date determining the right for receiving this dividend ("Date of Record") falls after allocation date of the Options but before their Exercise Date, the Exercise Price of each Option not yet exercised into a Company share by the Date of Record will be reduced by the gross amount of the dividend per share distributed by the Company as long as the Exercise Price  does not fall lower than the par value of a Company share. Beyond the adjustments to the Exercise Price specified in this clause, a distribution of dividends by the Company (in cash or in kind) will not in any way affect the terms of the Options or the number of Underlying Shares and will not obligate the Company to perform any adjustment whatsoever with respect to the Options and/or Underlying Shares unless the Board of Directors resolves otherwise.

 

2.4.5   Structural change, merger and sale - In the event of a change in the Company's structure ("Structural Change"); a merger of the Company with or into another company whether through an exchange of shares, cash acquisition or other means ("Merger"); or the sale of all or the vast majority of Company assets or of the Company's issued share capital to any third party ("Sale") - the Board of Directors will be entitled (but not obligated), inter alia, as it may so choose and subject to law:

 

2.4.5.1       To resolve that the Options be replaced by or converted to equivalent Options in the new company following the Merger or Sale, and make changes accordingly in the Exercise Price  (if necessary) - all subject to the discretion of the Board of Directors; or

                                                                 

2.4.5.2       To resolve that all Options be adopted by the new company so that the Options will be exercisable to the shares of the new company subject to adjustments and changes as resolved by the Board of Directors; or

 

2.4.5.3       To resolve that the Options be purchased by the new company in exchange for an amount per Option equal to the price paid per Company share as purchased by the new company, less the Exercise Price of the Option.

                 

                  Immediately following the implementation of such a Structural Change, Merger or Sale, all Company Options allocated under the Plan will expire unless they are adopted by the new company as stated in paragraph 2.4.5.2 above.

                                                  

                  For the purpose of the provisions of this paragraph, the term "new company" will refer to a company with which a Merger is performed or with which a Sale transaction is conducted, or which takes over the Company after a Structural Change or Merger.

 

2.4.6    Save in cases as set forth in this paragraph 2.4, the Company's allocation of securities of any type will not affect in any way the number of Underlying Shares or the Exercise Price, and will not obligate the Company to implement any adjustment whatsoever with respect to the Options and/or the Underlying Shares.

 

2.4.7    The allocation of Options under the Plan shall neither detract from nor affect in any manner whatsoever the Company's right to change its issued share capital or the composition thereof, to change the structure of the Company, to merge, to undergo liquidation or to sell all or part of its assets and/or its activities.

 

2.4.8    Liquidation - Unless otherwise resolved by the Board of Directors, in the event of liquidation of the Company, all Options allocated to Offerees will expire immediately prior to the liquidation of the Company.  In the said event, the Board of Directors may resolve that all or any part of the Options will expire on a particular date set in advance, and allow all or some of the Offerees to exercise the Options allocated to them, and The Board of Directors may also resolve that such an opportunity to exercise the Options will also apply with respect to Options which, according to their terms, would not have been exercisable on that stated set date, all subject to the provisions of law.

 

2.5    Restrictions on Exercising Options - termination of employment

 

2.5.1    If an Offeree who was an employee of the Company or an affiliated company on the allocation date ceases to be employed by the Company for any reason whatsoever ("Termination of Employment") (in this paragraph 2.5.1 - the term "Company" also includes an affiliated related company of the Company, if relevant), the Options constituting the subject of this Outline will expire as follows:

 

2.5.1.1        For the purposes of this paragraph 2.5, the day of Termination of Employment will be the date on which employee-employer relations are terminated between the Offeree and the Company ("Termination of Employment Date").

 

2.5.1.2        All Options allocated to the Offeree based on this Outline whose Vesting Period has not yet ended will expire on the Termination of Employment Date. The Options allocated to him whose Vesting Period ended by the Termination of Employment Date can be exercised by the Offeree for ninety (90) days from the Termination of Employment Date, unless the Board of Directors has resolved on a period longer than stated.

 

2.5.1.3        Notwithstanding the aforesaid, if the Offeree's Termination of Employment with the Company is the result of death or occupational disability (as defined below), the Options allocated to him whose Vesting Period ended by  the Termination of Employment Date will be exercisable by him or by his legal heirs (whichever relevant) up until their Expiry Date.

 

In this paragraph, "Occupational Disability" means the Offeree's inability to perform his job as the result of injury and/or illness for a period of at least six consecutive months.

 

2.5.1.4        Notwithstanding the aforesaid, if the Offeree is dismissed under circumstances in which he is not entitled to the severance pay as prescribed in the Severance Pay Law, 1963 or the relevant foreign law applicable to the Offeree, and subject to all laws, all the Options allocated him based on this Outline will expire, including Options whose Vesting Period have ended.

 

2.5.1.5        Notwithstanding the aforesaid, if an employee ceases to be employed by the Company due to retirement according to law or by collective agreement or by written agreement with the Company, the Options allocated him whose Vesting Period has ended by the Termination of Employment Date may be exercised by him up until their Expiry Date.

                                                                                                                                        

2.5.2    All rulings based on this paragraph, including the ruling of whether Termination of Employment occurred under circumstances of dismissal without entitlement to severance pay as stated in paragraph 2.5.1.4 above; the ruling of whether Termination of Employment occurred due to Occupational Disability as stated in paragraph 2.5.1.3 above; the ruling of whether Termination of Employment occurred due to retirement as stated in paragraph 2.5.1.5; and the ruling on whether the period during which the Offeree was on unpaid leave under  paragraph 1.1 above will be deemed within the Vesting Period and/or will be deemed Termination of Employment under this paragraph 2.5 - shall be made by the Board of Directors, at its exclusive discretion.

 

2.5.3    The Board of Directors may at any time determine, at its exclusive discretion, periods and terms different from those prescribed in this paragraph 2.5 with respect to a specific Offeree or as a rule.

 

2.5.4    Without derogating from the above provisions in paragraph 2.5 and lest there be any doubt, a transfer of the Offeree from the Company to an affiliated company and his employment or engagement therein following termination of his employment or engagement with the Company will not be deemed the end of employment or engagement for the purposes of this Outline.

 

2.5.5    It is hereby clarified that in no event are Options ever exercisable after the Option Expiry Date (as defined in paragraph 1.1 above).

 

2.6    Transferability of Options and Underlying Shares

 

         Unless otherwise resolved by the Board of Directors, Options allocated to an Offeree based on this Outline are neither transferable nor endorsable, under any circumstances, save for transfer to heirs by law in the event of death of the Offeree.  In the event of such aforesaid transfer to heirs, the Option terms and provisions of the Plan will be binding on the heirs.  In this paragraph, "transfer" means full transfer of ownership in the Options and Underlying Shares, as the case may be, including transfer or endorsement of any other right therein in any form or manner, and including their being mortgaged or liened.

 

         Underlying Shares will be subject to restrictions regarding their sale and/or transfer, as may be resolved by the Board of Directors from time to time, and subject to applicable law, including with regards to the prohibition of use of inside information.

 

2.7    Taxation Implications for Option Allocation, their Exercise into Shares and Sale of Underlying Shares with respect to Employees who are Israeli Residents

 

         2.7.1 General

 

                  The Company elected the capital gains track provided in section 102(B)(2) as the Ordinance which will apply to employees and officeholders of the Company and its affiliated companies who are entitled to such. With regards to Offerees who are not residents of Israel, the laws of their countries of residence will apply.

 

                  Any tax payment arising from the allocation of Options, from the exercise of Options into shares, from the payment for the purchase of the shares or from the sale/transfer of the Options and/or the shares will be applicable to the Offeree alone. The Company, its affiliated companies or the Trustee, if relevant, will deduct tax subject to the requirements of the applicable law, including tax deducted at source.

 

                  The Company's obligation to allocate Underlying Shares during the exercise of the Options, or to take any other action with respect to the Options or the Underlying Shares, or with regards thereto, is subject to full compliance with any income tax, national insurance, health insurance tax or other obligatory payment (if any) which may apply, including deduction of any tax or obligatory payment required by law, and subject to the Taxation Ruling.

 

2.7.2          Taxation applicable to Options under the provisions of section 102 to the Ordinance and minimal trust period

 

2.7.2.1    Pursuant to section 102 to the Ordinance and the rules enacted thereunder, as may be modified from time to time (the
"Rules"), taxation of the Options and the Underlying Shares is conditional upon their being held in trust for a period prescribed under the Ordinance, as may be amended from time to time, or for another period approved by the taxation authorities ("Minimal Trust Period"). However, the allocation of options under the Taxation Ruling is conditional upon the Underlying Shares being held in trust for at least 18 months before being transferred to the Offerees.

 

2.7.2.2    An Offeree will not be entitled to sell the Options and/or the Underlying Shares or to transfer such from the Trustee before the end of the Minimal Trust Period. Furthermore, rights awarded by power of the Underlying Shares, including bonus shares (in this section 2.7.2 - the "Rights") will be placed in the hands of the Trustee until the end of the Minimal Trust Period and shall be subject to the taxation track applicable to the shares by virtue of which they were awarded, all subject to applicable law and subject to the Taxation Ruling.

 

2.7.2.3       Notwithstanding the provisions of section 2.7.2.2 above, and subject to all other terms of the Plan and the Taxation Ruling, an Offeree may transfer the Options and/or the Underlying Shares and/or the Rights from the Trustee and sell such even before the end of the Minimal Trust Period, provided that 18 months have elapsed from the date on which they were first held by the Trustee in accordance with the provisions of the Taxation Ruling, and that the Trustee and/or the Company deducts tax at source or ensures the deduction of tax at source in accordance with the provisions of the Rules, as required under section 102 to the Ordinance and the Rules regarding failure to fulfill the Minimal Trust Period.

 

2.7.2.4    Subject to the applicable law, including section 102 to the Ordinance, voting rights in the Underlying Shares held by the Trustee will be in the hands of the Trustee.  The Trustee will not vote based on the Underlying Shares held by him on behalf of the Offeree except in accordance with an appropriate power of attorney given by the Offeree with respect to a particular vote.  It is hereby clarified that the Trustee is not required to inform the Offeree or send him any information whatsoever about any vote being taken by Company shareholders taking place or to approach the Offeree with a request for such power of attorney.

 

                  The provisions hereby contained in section 2.7 refer to the applicable law on the date of the Outline.  Provisions of law with respect to mandatory payments and tax aspect for Options granted based on this Outline may change from time to time.

 

                  The above stated does not purport to be an authorized interpretation of the provisions of law mentioned above nor an exhaustive description of all provisions of law relating to taxes which may apply with respect to the Options offered to the Offerees, and it does not come in place of legal and professional advice on the subject. As is customary in an investment decision, each Offeree who receives Options and decides to exercise them must act in accordance with the provisions of the law, including anything connected with safeguarding insider information, and consider the various tax issues and the tax consequences his investment will bear.  The Offeree should consult his professional advisors, including legal and tax advisors, taking into account his own particular circumstances.

 

2.8    Consideration for the offered Options

 

         The Options are offered to the Offerees without consideration, as set forth in paragraphs 1.1 and 1.2 above.

 

2.9    Economic value of the Options  

 

         The fair value of the Options amounts to US$ 515 thousand (US$ 154 thousand of this for the Options to be granted to the President). The fair value of the Options is calculated using a formula based on the Black-Scholes model, with the following underlying assumptions: the Exercise Price for each Option as stated in section 1.1 above, a standard deviation of 24.96%, a risk-free interest rate of 0.84%, dividend rate of return per share of 0.37%, a share price of NIS 197.30, and an annual early exit rate of 5%.

 

         The calculation of the fair value does not take into account the fact that the Options will not be registered for trade on the TASE, as specified in this Report, and it does not take into account the tax which may apply while exercising the Options or selling the Underlying Shares.

 

2.10  Agreements between Offerees and other shareholders

 

         To the best of the Company's knowledge, there are no written or oral agreements between the Offerees and any other Company shareholders or between all or some of the Offerees and themselves or between the Offerees and others with regards to the purchase or sale of the Company securities or with regards to voting rights in the Company.



 

Chapter 3 - The Underlying Shares

 

The Underlying Shares will be equal in all respects to ordinary shares in the Company's share capital.  All shares of the Company's share capital are registered shares of NIS 1.00 par value.

 

An updated version of the Company's memorandum was published by the Company on the Magna System on December 29, 2004 and may be viewed through the following link: http://maya.tase.co.il/bursa/report.asp?report_cd=121870.

 

The Company also published an updated version of its Articles of Association on the Magna System on May 9, 2016 which may be viewed though the following link:

 

http://maya.tase.co.il/bursa/report.asp?report_cd=1033381.

 

The following is a summary of particulars concerning key provisions in the Company's Memorandum and Articles of Association regarding the rights accompanying the Company's shares.  The version contained here in Section 3 is a summary and does not provide a substitute for reading the full version of the Company's Memorandum and Articles of Association:

 

3.1    Voting rights

 

3.1.1    Subject to the provisions of section 3.1.2 below, every shareholder shall have one vote for each share registered in his name on the Registry of Shareholders, regardless of its denomination or class.

 

3.1.2    No shareholder shall be entitled to be present or vote at a General Meeting (or to be counted as part of the legal quorum thereof) unless all amounts required to have been paid up with respect to his shares as of the date designated for the same General Meeting have been paid.

 

3.1.3    Any corporate body that is a shareholder of the Company and entitled to vote at and/or attend a General Meeting may exercise such rights by authorizing any person, whether in general or for a specific General Meeting, to be present and/or vote on its behalf.  Written evidence of such authorization and its validity shall be furnished at the behest of the Chairman of the General Meeting (in a format acceptable to the Chairman).

 

3.1.4    A shareholder entitled to vote and/or attend a General Meeting has the right to appoint a proxy, whether in general or for a specific General Meeting, to exercise his rights, as follows:

 

                  [a]     The appointment of the proxy shall be in writing and shall be in the form appearing in the Company's Articles of Association or in any other form approved by the Board of Directors.

 

                  [b]     The instrument appointing a proxy (and the power of attorney or other authorization, if any, under which such instrument has been signed) shall either be presented to the Chairman at the opening of the meeting at which the person named in the instrument proposes to vote or be delivered to the Company (at its registered office, at its principal place of business, or at such place as the Board of Directors may specify) not less than forty-eight (48) hours before the time fixed for such meeting.

 

                  [c]     Unless expressly permitted in the instrument of appointment, a proxy may not delegate his powers to any other person.

 

                  [d]     A vote cast in accordance with an instrument appointing a proxy shall be valid notwithstanding the prior death or bankruptcy of the appointing shareholder (or of his attorney‑in‑fact, if any, who signed such instrument), or the transfer of the share in respect of which the vote is cast, unless written notice of such matters was received by the Company or by the Chairman of such meeting prior to such vote being cast.

 

                  [e]     An instrument appointing a proxy shall be deemed revoked (i) upon receipt by the Company or the Chairman, subsequent to receipt by the Company of such instrument, of written notice signed by the person who signed such instrument or by the shareholder appointing such proxy for canceling the appointment thereunder (or the authority pursuant to which such instrument was signed) or of an instrument appointing a different proxy (and any other such document, if any, required under this paragraph for such a new appointment), provided such notice of cancellation or instrument appointing a different proxy were received at the place and within the time for delivery of the instrument revoked thereby as referred to in clause (b) above, or (ii) if the appointing shareholder is present in person at the meeting for which such instrument of proxy was delivered, upon receipt by the Chairman of such meeting of written notice from such shareholder of the revocation of such appointment, or if and when such shareholder votes at such meeting.  A vote cast in accordance with an instrument appointing a proxy shall be valid notwithstanding the revocation or attempted cancellation of the appointment, or the presence in person or vote of the appointing shareholder at a meeting for which it was rendered, unless such instrument of appointment was deemed revoked in accordance with the foregoing provisions of this clause (e) at or prior to the time such vote was cast. 

 

3.1.5    A shareholder entitled to vote at and/or attend a General Meeting and becomes legally incapacitated may exercise such rights through his legal custodian.

 

3.1.6    If two or more persons are registered as joint owners of any share, the right to attend a General Meeting, if attached to such share, shall be conferred upon all of the joint owners, but the right to vote at a General Meeting and/or the right to be counted as part of the legal quorum at such General Meeting, if attached to such share, shall be conferred exclusively upon the senior amongst the joint owners attending the General Meeting, in person or by proxy; for this purpose seniority shall be determined by the order in which the names appear in the Registry of Shareholders.

 

3.2    Rights to dividends and to the distribution of bonus shares

 

3.2.1    The Board may from time to time declare an interim or final dividend at a rate it deems fit considering the profits of the Company and as permitted by law.

            Subject to any special or restricted rights conferred upon the holders of shares as to dividends, all dividends shall be declared and paid in accordance with the paid-up capital of the Company attributable to the shares in respect of which the dividends are declared and paid.  The paid-up capital attributable to any share (whether issued at its nominal value, at a premium or at a discount), shall be the nominal value of such share; provided, however, that if the entire consideration for same share was not yet paid to the Company, the paid-up capital attributable thereto shall be such proportion of the nominal value as the amount paid to the Company with respect to the share to its full consideration.

 

            Notice of the declaration of dividends shall be delivered to all those entitled to receive such dividends.

 

3.2.2    Subject to special rights with respect to the Company's profits to be conferred upon any person pursuant to the Company's Articles of Association and further subject to the provisions of the Company's Articles of Association with respect to reserved funds and special funds, all the profits of the Company may be distributed among the shareholders entitled to participate in the distribution of dividends.

 

Notwithstanding the foregoing, a share shall not grant the right to participate in the distribution of dividends declared prior to the date of its actual issuance.

 

The purchase by the Company of its own shares from any one or more shareholders shall not be considered as dividend, shall not entitle any other shareholders to have their shares purchased by the Company, and shall not otherwise be subject to the provisions of the Articles of Association relating to dividends.

 

3.2.3    The Company shall not be obliged to pay and shall not pay interest on declared but unpaid dividends if the shareholders entitled to such dividends fail to collect same or to provide the Company the necessary information for the payment thereof, or if the Company is for any other reason unable to pay out the dividend to such shareholder.

 

3.2.4    Subject to section 3.2.5 below, a declared dividend may be paid by a check made to the order of the person entitled to receive such dividend (and if there are two or more persons entitled to the dividend in respect of the same share - to the order of any one of such persons) or to the order of such person as the person entitled thereto may direct in writing. Same check shall be sent to the address of the person entitled to the dividend as notified to the Company.

 

3.2.5    The Company may, upon a decision by the Board of Directors, pay dividends, in whole or in part, by distributing specific assets of the Company and/or by the distributing fully paid-up shares and/or debentures of the Company and/or of any other company, or in any combination of such payment methods.

 

            In order to put any resolution in connection with a dividend distribution or distribution of property or of fully paid-up shares or debentures into effect, the Board is entitled to resolve any difficulty that may arise concerning the distribution as it deems necessary, and in particular to issue certificates for fractional shares and to determine the value of certain property for purposes of distribution, and to decide that cash payments shall be made to the shareholders on the basis of the value decided for that purpose.

 

3.2.6    The Company is entitled to offset its obligation to pay dividends or any other amount in respect of shares as against any amount it has due at the same point in time and payable to the Company by the person entitled to receive the dividend. The provisions contained in this paragraph shall not prejudice any other right or remedy vested with the Company pursuant to the Company's Articles of Association or any applicable law.

 

3.2.7    Dividends unclaimed by the person entitled thereto within thirty (30) days after the date stipulated for their payment, may be invested or otherwise used by the Company for its own account, as it deems fit, until claimed; and the Company shall not be deemed a trustee in respect thereof.

 

           Dividends unclaimed within a period of two (2) years from the date stipulated for their payment shall be forfeited and shall revert to the Company unless otherwise directed by the Board.

 

3.2.8    The Board may, before declaring a distribution of dividends, determine to set aside and transfer to reserves any sum it deems fit from the profits of the Company or from an assets revaluation fund, and designate the purpose, application and use of such sum.  The Board may further determine that any sum which it deems prudent not to distribute as dividends will not be set aside for reserves but shall continue remaining at the Company's disposal.

 

            The Board may, from time to time, call for revaluation of Company assets, in whole or in part, and the creation of an assets revaluation fund out of the revaluation surplus, if any.

 

3.2.9    Upon the recommendation of the Board, the Company may determine by an Ordinary Resolution at a General Meeting that it desires to fully or partially capitalize sums or assets credited to any reserve fund or credited to the profit and loss account, or subject in any other way to being distributed as dividends (including sums or assets received as premiums on the issuance of shares or debentures), and direct accordingly that such sums or assets be released for distribution amongst the shareholders who would have been entitled thereto had they been distributed by way of dividends and in the same proportion. This is provided that same sums or assets not be paid in cash or in kind but be applied for the payment in full or in part of the unpaid consideration of the shares issued and held by such shareholders and/or for the payment in full of the consideration (as shall be stipulated in said resolution) for shares or debentures of the Company to be issued to such shareholders subsequent to the date of said resolution, as fully paid up.

 

            In the event a resolution as aforesaid shall have been adopted, the Board shall make all adjustments and applications of the sums or assets intended to be thereby capitalized, and shall do anything necessary to put the decision into effect. The Board may authorize any person to enter into an agreement with the Company on behalf of the shareholders entitled to participate in such distribution, providing for the issuance to such shareholders of any shares or debentures, credited as fully paid, to which they shall be entitled upon the execution of such capitalization or for the payment on behalf of such shareholders, by the application thereto of the proportionate part of the sums or assets intended for being capitalized, of the amounts or any part thereof remaining unpaid on their existing shares, and any agreement made under such authority shall be effective and binding upon all such shareholders.   



 

3.3    Distribution of Assets

 

In the liquidation of the Company, the entire surplus of assets and funds of the Company legally available for distribution, if any, shall be distributed pro rata  to the holders of all shares of the Company (treating the Preferred Shares on an as converted basis), in each case in proportion to the nominal value of the shares then held by them; provided, however, that if the entire consideration for a share was not yet paid to the Company, the paid-up capital attributable thereto shall be such proportion of the nominal value as the amount paid to the Company with respect to the same share's  full consideration.

 

Whenever the distribution provided for in this paragraph shall be payable in securities or property or cash, the Board of Directors shall have the authority to make any determination necessary to resolve any difficulty arising in effecting such distribution, including determining the fair market value of such securities or property, or the manner of distributing any property which cannot be apportioned among the shareholders.

 

3.4    Appointment of directors

 

3.4.1    The Board of Directors shall consist of between five and twenty directors (including the External Directors), unless otherwise prescribed by an Ordinary Resolution.

 

3.4.2    Directors, other than External Directors, shall be elected at the Annual General Meeting by an Ordinary Resolution, and each such Director shall serve until the end of the next Annual General Meeting or General Meeting at which such Director was elected and at which new directors are elected and appointed to their positions, unless his role has ended earlier pursuant to the Company's Articles of Association or the Companies Law.

 

3.4.3    Shareholders may, by an Ordinary Resolution passed at a General Meeting, remove from office any Director(s), other than an External Director, and may fill any vacancy on the Board of Directors regardless of the circumstances surrounding how it came to be vacated.  Shareholders may remove an External Director from office in accordance with the provisions of the Companies Law.

 

3.4.4    The Directors shall at any time and from time to time have the power to appoint any other person as a Director, whether to fill a vacancy or whether in addition as an addition to the Board of Directors, provided that the total number of Directors does not exceed the maximum number permitted under section 3.4.1 above.  Any Director so appointed shall hold office until the end of first General Meeting convened after such appointment and may be re‑elected.

 

3.5    Notice of General Meetings

 

3.5.1    Written notice about General Shareholders' Meetings will not be sent to shareholders listed in the registry of shareholders unless the Board of Directors resolves otherwise with regards to a specific meeting.

 

3.6    General Meetings of Company Shareholders

 

3.6.1    An Annual General Meeting shall be held once in every calendar year at such time (within a period of not more than fifteen (15) months after the preceding Annual General Meeting) and at such place as may be determined by the Company's Board of Directors.

 

3.6.2    All General Meetings other than Annual General Meetings shall be termed "Special General Meeting".

 

3.6.3    The Board may, whenever it deems fit, convene a Special General Meeting, and shall be obliged to do so upon receiving a demand in writing in accordance with the provisions of the Companies Law.

 

3.6.4    Shareholders of the Company may not convene a General Meeting except as provided in the Companies Law.

 

3.6.5    Two or more shareholders, present in person, by proxy or by ballot at the opening of the meeting, and holding shares constituting 33 1/3% (thirty three percent and one third of a percent) or more of the total voting rights attached to the shares then outstanding, shall constitute a legal quorum at the General Meeting.

 

3.6.6    If within half an hour from the time appointed for the General Meeting a legal quorum is not present, the General Meeting shall be postponed to the same day the following week, at the same time and place, or any other time and place as the Board of Directors may designate in a notice to the shareholders. The legal quorum at a postponed General Meeting shall be as follows:

 

                     [a]      if the original meeting was convened upon demand by shareholders pursuant to the Companies Law - the number of shareholders holding the minimum number of votes necessary to make such a demand, present in person or by proxy; or

 

                     [b]      in any other case - one or more shareholders, present in person or by proxy, and holding at least one share.

 

                  The only matters to be addressed at a postponed General Meeting shall be those matters which could have been lawfully been discussed at the General Meeting originally called had a legal quorum been present, and the only resolutions to be adopted are such types of resolutions which could have been adopted at the General Meeting originally called.

 

3.6.7    The Chairman of the General Meeting shall be the Chairman of the Board of Directors, if any, or any other person appointed by the Board for such purpose, or, if the Chairman of the Board or such other person are not present within fifteen (15) minutes from the time designated for the opening of the meeting, or are unwilling to serve as its Chairman, then the shareholders present at the meeting may, by Ordinary Resolution, appoint a Chairman of the meeting.  The Chairman of any General Meeting shall have no additional or decisive vote.

 

3.6.8    Unless otherwise required by law, all resolutions by the General Meeting will be adopted by an Ordinary Resolution.  An Ordinary Resolution shall be deemed adopted at a General Meeting if the majority of the votes attached to the shares voted on such resolution were cast for the approval of such resolution, whether by the shareholders themselves, by proxy or by ballot.

 

3.6.9    Any proposed resolution put to vote at a General Meeting shall be decided by a written ballot.

 

3.6.10  A declaration by the Chairman of the General Meeting that a proposed resolution has been adopted or rejected shall constitute prima facie evidence of the adoption or rejection, respectively, of same resolution, and no further evidence verifying the contents of such declaration or the number or proportion of the votes recorded in favor of or against such resolution shall be required.

 

3.7    Transfer of shares

 

3.7.1    Effectiveness and Registration - A transfer of title to shares, whether voluntarily or by operation of law, shall not confer upon the transferee any rights whatsoever towards the Company unless and until such time as the transfer has been recorded in the Registry of Shareholders.

 

3.7.2    Record Date - Notwithstanding any contrary provision of the Company's  Articles of Association, in order that the Company may determine the identities of shareholders entitled to notice of a General Meeting or any postponement thereof and having the right to vote therein, or to express consent to or dissent from any corporate action in writing without a meeting, or be entitled to receive payment of any dividend or other distribution or allotment of any rights, or be entitled to exercise any rights with respect to any other action or to take or be the subject of any other action, the Board of Directors may fix in advance a date of record not exceeding (60) nor less than four (4) days prior to the date of such General Meeting (or any longer or shorter period permitted by law), and not more than sixty days prior to any other such action. The determination of shareholders of record entitled to receive notice of or to vote at a meeting shall apply to any postponement of the meeting, unless the Board fixes a new record date for the postponed meeting.

 

3.7.3    Any shareholder desiring to transfer to another person title to his shares, or any part thereof, shall give the Company a notice to that effect accompanied by an instrument of transfer in a format to be prescribed by the Board of Directors and duly executed by the same shareholder. The format of the instrument of transfer will be similar to the format appearing in the Company's Articles of Association.

 

3.7.4    Any person becoming entitled to shares of the Company by virtue of law who desires to be registered as a shareholder in respect thereof in the Registry of Shareholders shall furnish the Company with evidence proving his title to the shares to the satisfaction of the Board of Directors or any person it designates for such purpose. 

 

3.8    Increasing Share Capital and Changes to Rights Attached to Company Shares

 

3.8.1    The Company may, from time to time, by an Ordinary Resolution:

 

                  [a]     Increase its share capital by an amount it deems appropriate by the creation of new shares. The Company will be entitled to exercise its authority to increase the share capital whether or not all of the registered shares at that time have been issued and whether or not all issued shares at the time require payment. Such Ordinary Resolution shall set forth the amount by which the share capital will increase, the number of the new shares to be created, their nominal value and class, and may also specify the rights, seniority rights or deferred rights to be attached to the newly created shares and the restrictions to which they shall be subject;

 

                  [b]     Decide on a complete or partial consolidation of issued or unissued share capital and its division into shares of nominal value higher than that of existing shares;

 

                  [c]     Subdivide the entire issued or unissued share capital into shares of nominal value lower than stipulated in the Company's Articles of Association provided, however, that the proportion between the paid up amount and the unpaid amount on each share which is not fully paid-up shall be retained under the subdivision;

 

                  [d]     Cancel any share which, as at the time of adoption of the Ordinary Resolution, have not been issued or approved for issue, and thereby reduce the amount of its share capital by the aggregate nominal value of the shares so canceled; or

 

                  [e]     Subject to any approval or consent required by law, reduce its share capital by any manner whatsoever.

 

                  [f]      With respect to any consolidation of issued shares into shares of larger nominal value, and with respect to any other action which may result in fractional shares, the Board may settle any difficulty which may arise with regard thereto, as it deems fit, including, inter alia, by (i) issuing, in contemplation of, or subsequent to such consolidation or other action, such shares or fractional shares sufficient to preclude or remove fractional share holdings; or (ii) by causing the transfer of fractional shares by certain shareholders to other shareholders so as to most expediently preclude or remove any fractional shareholdings, and cause the transferees to pay the transferors the fair value of fractional shares so transferred, and the Board of Directors is hereby authorized to act as agent for the transferors and transferees with power of substitution for purposes of implementing the provisions of this sub-section.

         3.8.2

 

                  [a]     Unless otherwise stipulated in the Company's Articles of Association, the rights, obligations and restrictions attached to all Company shares shall be identical regardless of their denomination or class.

 

                  [b]     The rights attached to any class of shares may be modified or annulled by consent in writing of the holders of the majority of the issued shares of that class or by the adoption of an Ordinary Resolution approving such modification or nullification at a separate General Meeting of the holders of shares of that class, provided that subject to the provisions relating to postponement of General Meetings, the legal quorum required at each separate such General Meeting will be one shareholder but if there is more than one shareholder of the same class of shares then at least two shareholders or more, present in person  or by proxy and holding no less than fifty percent (50%) of that class of shares.

 

                  [c]     The creation or issuance of additional shares of a specific class shall not be deemed, for purposes of sub-paragraph 3.8.2 [b] above, a modification or nullification of rights attached to shares of the same class or of any other class.

 

 

Chapter 4 - Details on the Company's Share Price

 

Following are details on the high and low prices at which Company shares were traded on the Tel Aviv Stock Exchange in 2014 and 2015 and during the period between January 1, 2016 and September 29, 2016 (without taking into consideration the dividend distributed during that period):

 

Price on the Tel Aviv Stock Exchange

During the period between January 1, 2016 and

 September 29, 2016

2015

2014

Date

Price

 (in NIS 0.01)

Date

Price

(in NIS 0.01)

Date

Price

 (in NIS 0.01)

High

March 2, 2016

21,030

December 31, 2015

21,070

December 31, 2014

12,260

Low

June 27, 2016

17,080

January 13, 2015

11,480

January 26, 2014

7,170

 

The closing price for Company shares on the Tel Aviv Stock Exchange on September 29, 2016 (the last day of trading prior to this Outline) was NIS 197.30.



 

Chapter 5 - Reference to Financial Statements

 

The attention of Offerees is directed to the Company's financial statements as at December 31, 2015 as published on March 17, 2016 and to the Company's financial statements as at June 30, 2016 as published on August 15, 2016.

 

In addition, the Company directs the attention of the Offerees to the immediate reports it publicizes from time to time on the Israel Securities Authority's MAGNA website at www.magna.isa.gov.il and on the Tel Aviv Stock Exchange's MAYA website at www.maya.tase.co.il.



 

Chapter 6 - Material Private Offering to the President and the Sixth Schedule to the Reports Regulations

 

 

6.1    The Options allocated according to this report and the Company's share capital

 

         Following are details on the Company's share capital as of September 29, 2016:

 

 
 

Issued and paid up share capital

(number of shares)

Registered share capital (number of shares)
Class of shares

On the date of submitting this report

Diluted as a result of the allocation based on this report

Fully diluted

100,000,000

Ordinary shares of NIS 1.00 par value

59,184,825

59,184,825

60,167,746

 



 

         Following are, to the Company's best knowledge, details on the holdings by the President and by interested parties in the Company of the Company's shares on the date of this report, following the allocation under this report and fully diluted:

 


Quantity and ownership percentage in capital and voting prior to the allocation of Options

Quantity and ownership percentage in capital and voting after vesting of the offered Options

Quantity and ownership percentage in capital and voting - fully diluted


Number

of shares

%

capital

%

voting

Number

of shares

%

capital

% voting

Number

of shares

%

capital

%

voting

Frutarom Industries

Ltd.

245,248

0.41%

0.00%

227,291

0.38%

0.00%

-

0.00%

0.00%

ICC Industries Inc.

21,358,034

36.09%

36.24%

21,358,034

36.08%

36.23%

21,358,034

35.50%

35.50%

John Farber

48,888

0.08%

0.08%

48,888

0.08%

0.08%

48,888

0.08%

0.08%

Migdal Insurance & Financial Holdings - profit-sharing life insurance

2,004,476

3.39%

3.40%

2,004,476

3.39%

3.40%

2,004,476

3.33%

3.33%

Migdal Insurance & Financial Holdings - provident funds

1,487,104

2.51%

2.52%

1,487,104

2.51%

2.52%

1,487,104

2.47%

2.47%

Migdal Insurance & Financial Holdings - nostro acct.

125,154

0.21%

0.21%

125,154

0.21%

0.21%

125,154

0.21%

0.21%

Migdal Insurance & Financial Holdings - mutual funds

212,133

0.36%

0.36%

212,133

0.36%

0.36%

212,133

0.35%

0.35%

FMR LLC

4,902,543

8.28%

8.32%

4,902,543

8.28%

8.32%

4,902,543

8.15%

8.15%

Ori Yehudai

482,162

0.81%

0.82%

487,549

0.82%

0.83%

966,145

1.61%

1.61%

Hans Abderhalden

17,439

0.03%

0.03%

17,439

0.03%

0.03%

18,095

0.03%

0.03%

Gil Leidner

1,161

0.00%

0.00%

1,161

0.00%

0.00%

1,161

0.00%

0.00%

Public

28,300,483

47.82%

48.02%

28,313,053

47.84%

48.02%

29,044,013

48.27%

48.27%

Total

59,184,825

100.00%

100.00%

59,184,825

100.00%

100.00%

60,167,746

100.00%

100.00%

 

 

6.2    Information regarding the price of Company shares

 

         Please see Chapter 4 above.

 

6.3    Fair value of the Options

 

         Please see paragraph 2.9 above.

 

6.4    Consideration and the method by which it was determined

 

         Please see paragraphs 1.1 and 2.8 above.

 

         The Offering concerning the allocation of Options to the President according to this Outline and Report is in accordance with the President's terms of office and employment and the Compensation Policy.

 

6.5    Personal interest in approval of the offer to the President 

 

         The President has a personal interest in the offer by virtue of his being an Offeree.

 

6.6    Required authorizations

 

         Please see paragraph 1.3 above.

 

6.7    Agreements between the President and other shareholders

 

         To the best of the Company's knowledge, no agreements exist either in writing or orally between the President and any other Company shareholder or between the President and others with respect to the purchase or sale of the Company's securities or with respect to voting rights in the Company.

 

6.8    The date of granting Options to the President

 

         Subject to the provisions of paragraphs 1.1 to 1.3 above, the Options will be granted to the President not before 14 business days following the filing of the Outline have elapsed, and no later than the date of filing of the Company's periodic report for 2015 or the date set by law for filing that report, whichever comes earlier.



 

6.9    Additional details under the Private Offering Regulations and regulation 37A3 and the Sixth Schedule to the Reports Regulations regarding the President

 

         For details regarding the main terms of office and overall compensations to which the President is entitled under the Sixth Amendment to the Reports Regulations, see Regulation 21 to Chapter D to the Company's 2015 periodic and annual report published by the Company on March 17, 2016.

        

         For details regarding the President's holdings of Company shares at the time of this Report, see paragraph 6.1 above.

 

         The fair value of the benefit to the President under this Offer is as specified in paragraph 2.9 above.

               

 

Date: October 5, 2016

 

Sincerely yours,

 

Frutarom Industries Ltd.

 

 

Signatories on behalf of the Corporation:

 

 

Tali Mirsky, Adv.

Global VP Legal Affairs and Corporate Secretary


This information is provided by RNS
The company news service from the London Stock Exchange
 
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