Amended Report of Foreign Issuer (6-k/a)
May 18 2018 - 9:28AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K/A
Amendment No. 1
Report of
Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month of May 2018
Commission File Number 000-12790
ORBOTECH LTD.
(Translation of Registrants name into English)
7 SANHEDRIN
BOULEVARD, NORTH INDUSTRIAL ZONE, YAVNE 8110101, ISRAEL
(Address of principal executive offices)
Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form
40-F ☐
Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(1): ☐
Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(7): ☐
EXPLANATORY NOTE
This report on Form 6-K/A furnished by Orbotech Ltd. (Orbotech) amends Orbotechs report on Form 6-K furnished with the U.S. Securities and Exchange Commission on May 17, 2018
(the Form 6-K), solely to identify where investors can find additional information in respect of the proposed business combination between KLA-Tencor Corporation (KLA-Tencor) and Orbotech. Except as expressly set forth above,
this amendment to the Form 6-K does not amend, update or restate the information furnished on the Form 6-K, and the documents attached hereto and incorporated by reference herein have not been modified or amended from such documents attached to and
incorporated by reference into the Form 6-K.
Attached hereto and incorporated by reference herein are the following documents:
1.
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The Registrants Proxy Statement for its 2018 Annual General Meeting of Shareholders.
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2.
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A copy of the Proxy Card with respect to the Registrants 2018 Annual General Meeting of Shareholders.
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*
* * * * *
This report on Form 6-K/A is incorporated by reference into the Registration Statements on Form S-8 (Registration No. 33-25782, Registration
No. 33-78196, Registration No. 333-05440, Registration No. 333-06542, Registration No. 333-08404, Registration No. 333-09342, Registration No. 333-11124, Registration No. 333-12692, Registration No. 333-127979, Registration No. 333-154394 and
Registration No. 333-169146) of Orbotech Ltd. previously filed with the Securities and Exchange Commission.
Additional Information and
Where to Find It
This report is provided in respect of a proposed business combination involving KLA-Tencor and Orbotech. This report does
not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities or a solicitation of any vote or approval nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer,
solicitation, sale, issuance or transfer would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The proposed transaction will be submitted to the shareholders of Orbotech for their consideration.
On May 16, 2018, KLA-Tencor filed with the SEC a Registration Statement on Form S-4 that includes a preliminary prospectus with respect to KLA-Tencors common stock to be issued in the proposed transaction and a preliminary proxy statement of
Orbotech in connection with the merger of an indirect subsidiary of KLA-Tencor with and into Orbotech, with Orbotech surviving. The information in the preliminary proxy statement/prospectus is not complete and will be changed. KLA-Tencor may not
sell the common stock referenced in the proxy statement/prospectus until the Registration Statement on Form S-4 becomes effective. The proxy statement/prospectus will be provided to the Orbotech shareholders. KLA-Tencor and Orbotech also plan to
file other documents with the SEC regarding the proposed transaction.
This report is not a substitute for any prospectus, proxy statement
or any other document that KLA-Tencor or Orbotech has or may file with the SEC in connection with the proposed transaction. Investors and security holders of KLA-Tencor and Orbotech are urged to read the proxy statement/prospectus and any other
relevant documents that will be filed with the SEC carefully and in their entirety when they become available because they will contain important information about the proposed transaction.
You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SECs website (www.sec.gov). In
addition, investors and security holders will be able to obtain free copies of the proxy statement/prospectus (when they become available) and other documents filed with the SEC by KLA-Tencor on KLA-Tencors Investor Relations page
(http://ir.kla-tencor.com) or by writing to KLA-Tencor Corporation, Investor Relations, 1 Technology Drive, Milpitas, CA 95035 (for documents filed with the SEC by KLA-Tencor), or by Orbotech on Orbotechs Investor Relations page
(investors.Orbotech.com) or by writing to Orbotech Ltd., Investor Relations, 7 Sanhedrin Boulevard, North Industrial Zone, Yavne 8110101 Israel (for documents filed with the SEC by Orbotech).
ORBOTECH LTD.
7 Sanhedrin Boulevard
North Industrial Zone
P.O. Box 215
Yavne
8110101, Israel
May 17, 2018
Dear Shareholder:
You are cordially invited to attend the 2018 Annual General Meeting of Shareholders of Orbotech Ltd. (
Orbotech
or the
Company
) to be held at 10:00 a.m., Israel time, on Thursday, June 21, 2018, at Orbotechs offices at 7 Sanhedrin Boulevard, North Industrial Zone, Yavne, Israel.
As previously announced, on March 18, 2018,
KLA-Tencor
Corporation, a Delaware company (
KLA-Tencor
), Tiburon Merger Sub Technologies Ltd., a company organized under the laws of the State of Israel and a wholly-owned subsidiary of
KLA-Tencor
(
Merger Sub
), and the Company entered into an agreement and plan of merger, as amended (the
Merger Agreement
) pursuant to which Merger Sub will merge with and into the Company (the
Proposed
Merger
) on the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the provisions of Sections
314-327
of the Israel Companies Law, 1999, as amended (the
Companies Law
) and the rules and regulations promulgated thereunder, following which Merger Sub will cease to exist, and the Company will become a wholly-owned subsidiary of
KLA-Tencor.
If
the Proposed Merger is consummated, each Ordinary Share that is issued and outstanding immediately prior to the Proposed Merger, other than Excluded Shares (as defined in Amendment No. 1 to the Merger Agreement), will be converted
into the right to receive: (i) cash, without interest, in an amount equal to $38.86; and (ii) 0.25 of a share of
KLA-Tencor
common stock, in each case subject to the terms and conditions set forth in the
Merger Agreement.
The Proposed Merger has been approved by the Board of Directors of the Company as well as by the board of directors of
KLA-Tencor
and is subject to approval by the Companys shareholders, required regulatory approvals and the satisfaction of other customary closing conditions. A separate extraordinary general meeting of the
shareholders of the Company will be convened for purposes of approving the Merger Agreement, the Proposed Merger and the other transactions contemplated by the Merger Agreement.
Subject to fulfillment of the foregoing conditions, the closing of the Proposed Merger (the
Closing
) is expected to take
place during the fourth quarter of calendar year 2018; however, no assurance can be provided as to whether and when the Closing will occur. For more information about the Proposed Merger, including the risks related thereto, please refer to
Orbotechs filings with the Securities and Exchange Commission.
Pursuant and subject to the terms and conditions set forth in the
Merger Agreement, the Company is obligated to carry on its business in all material respects in the ordinary course in substantially the same manner as conducted prior to entering into the Merger Agreement. This includes holding the Companys
Annual General Meeting of its shareholders in the ordinary course.
You will be asked at this meeting to take action on the matters
specified in the enclosed Proxy Statement and you will also have an opportunity to receive and consider the Report of the Independent Registered Public Accounting Firm and the Consolidated Financial Statements of the Company for the fiscal year
ended December 31, 2017. The Board of Directors is recommending that you vote FOR the
re-election
of all of the nominees to the Board of Directors and FOR Items 4 and 5 specified
on the enclosed form of proxy; and the Audit Committee of the Board of Directors is recommending that you vote FOR Item 3 specified on the enclosed form of proxy. A discussion period will be provided for questions and comments relating
to the matters set forth in the enclosed Proxy Statement.
Please note this proxy statement does not relate to the Proposed Merger. Shareholders will
have an opportunity to vote on that transaction at a separate meeting to be held later this year.
We look forward to greeting personally
those shareholders who are able to be present at the meeting. If you do plan to attend, to gain access to the meeting we ask that you bring with you some form of personal identification and verification of your status as a shareholder as of the
close of trading on May 14, 2018, the record date for the meeting. However, whether or not you will be with us at the meeting, it is important that your shares be represented. Accordingly, you are requested to complete, date, sign and mail the
enclosed proxy in the envelope provided at your earliest convenience and in any event so as to be received in a timely manner as discussed in the enclosed Proxy Statement.
Thank you for your
co-operation.
Very truly yours,
ASHER LEVY
Chief Executive Officer
ORBOTECH LTD.
7 Sanhedrin Boulevard
North Industrial Zone
P.O. Box 215
Yavne
8110101, Israel
PROXY STATEMENT
ANNUAL GENERAL MEETING OF SHAREHOLDERS
This Proxy Statement is being furnished to the holders of Ordinary Shares, New Israeli Shekels (
NIS
) 0.14 nominal (par)
value per share (
Ordinary Shares
), of Orbotech Ltd. (
Orbotech
or the
Company
) in connection with the solicitation by the Board of Directors of the Company (the
Board
) of
proxies for use at the Companys 2018 Annual General Meeting of Shareholders (the
2018
Annual General Meeting
or the
Meeting
) or at any adjournment thereof.
As previously announced, on March 18, 2018,
KLA-Tencor
Corporation, a Delaware corporation
(
KLA-Tencor
), Tiburon Merger Sub Technologies Ltd., a company organized under the laws of the State of Israel and a wholly-owned subsidiary of
KLA-Tencor
(
Merger Sub
) and the Company entered into an agreement and plan of merger, as amended (the
Merger Agreement
), pursuant to which Merger Sub will merge with and
into the Company (the
Proposed
Merger
) on the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the provisions of Sections
314-327
of the
Israel Companies Law, 1999, as amended (the
Companies Law
) and the rules and regulations promulgated thereunder, following which Merger Sub will cease to exist, and the Company will become a wholly-owned subsidiary of
KLA-Tencor.
If the Proposed Merger is consummated, each Ordinary Share that is issued and outstanding immediately prior to the Proposed Merger, other than Excluded Shares (as defined in Amendment
No. 1 to the Merger Agreement), will be converted into the right to receive: (i) cash, without interest, in an amount equal to $38.86; and (ii) 0.25 of a share of
KLA-Tencor
common stock, in each
case subject to the terms and conditions set forth in the Merger Agreement.
The Proposed Merger has been approved by the Board as well as
by the board of directors of
KLA-Tencor
and is subject to approval by the Companys shareholders, required regulatory approvals and the satisfaction of other customary closing conditions. A separate
extraordinary general meeting of the shareholders of the Company will be convened for purposes of approving the Merger Agreement, the Proposed Merger and the other transactions contemplated by the Merger Agreement.
Subject to fulfillment of the foregoing conditions, the closing of the Proposed Merger (the
Closing
) is expected to take
place during the fourth quarter of calendar year 2018; however, no assurance can be provided as to whether and when the Closing will occur.
Pursuant and subject to the terms and conditions set forth in the Merger Agreement, the Company is obligated to carry on its business in all
material respects in the ordinary course in substantially the same manner as conducted prior to entering into the Merger Agreement. This includes holding the 2018 Annual General Meeting in the ordinary course.
The 2018 Annual General Meeting will be held on Thursday, June 21, 2018, at 10:00 a.m., Israel time, at Orbotechs principal
executive offices at 7 Sanhedrin Boulevard, North Industrial Zone, Yavne, Israel, for the following purposes:
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(1)
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To
re-elect
eight directors to the Board;
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(2)
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To
re-elect
one director to the Board who will serve as an external director and to approve his remuneration and benefits;
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1
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(3)
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To
re-appoint
the Companys auditors for the fiscal year ending December 31, 2018, and until the next annual general meeting of shareholders;
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(4)
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To approve the grant of, and to authorize the Board to grant, certain potential cash and equity-based retention incentives: (a) to the Chief Executive Officer of the Company; and (b) to the President and Chief
Operating Officer of the Company; and
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(5)
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To approve the accelerated vesting as of immediately prior to the Closing of the Proposed Merger of equity-based awards granted to the Companys directors in connection with the 2018 Annual General Meeting.
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In addition, shareholders attending the meeting will have an opportunity to receive a hard copy of, and consider, the
Report of the Independent Registered Public Accounting Firm and the Consolidated Financial Statements of the Company for the fiscal year ended December 31, 2017.
This Proxy Statement is for the 2018 Annual General Meeting and does not relate to the extraordinary general meeting of shareholders
expected to be held later in 2018 with respect to the approval of the Proposed Merger (the 2018 Extraordinary General Meeting). This Proxy Statement is not soliciting votes for the 2018 Extraordinary General Meeting and shareholders will
receive a separate proxy statement/prospectus related to the 2018 Extraordinary General Meeting. Nothing in this Proxy Statement should be construed as a solicitation or offer with respect thereto.
Shareholders are asked to read this proxy statement carefully and to vote on the matters set forth herein.
Voting procedures
.
A form of proxy for use at the Meeting and a return envelope for the proxy are enclosed. No postage is
required if mailed in the United States. Shareholders may revoke the authority granted by their execution of a proxy at any time before the effective exercise thereof by filing with the Company a written notice of revocation or a duly executed proxy
bearing a later date, or by voting in person at the Meeting.
In order for a proxy to be counted, it must be duly executed and received prior to the Meeting. This will be deemed to have occurred only if such proxy is received either by the
Company at its principal executive offices at 7 Sanhedrin Boulevard, North Industrial Zone, Yavne, Israel, at any time prior to the commencement of the Meeting, or by the Companys transfer agent in New York, New York, by no later than 11:59
p.m., New York time, on June
20, 2018,
the last business day immediately preceding the date of the Meeting (and, in each case, not revoked prior to such
time). Shares represented by any proxy received after the times
specified above will not be counted as present at
the Meeting and will not be voted.
Unless otherwise indicated on the form of proxy or as provided in the paragraphs below, shares represented by any proxy in the enclosed form, if
properly executed and received by the Company prior to the Meeting (as specified above), will be voted in favor of Items 15 above.
Joint holders of shares should take note that, pursuant to Article 62 of the Articles of Association of the Company (the
Articles
), the vote of the senior holder of joint holders of any share who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the vote(s) of the other joint holder(s) of the share, and for this
purpose seniority will be determined by the order in which the names stand in the Companys share register.
Record
date
.
Proxies for use at the Meeting are being solicited by the Board. Only shareholders of record at the close of trading on May 14, 2018, will be entitled to vote at the 2018 Annual General Meeting or at any adjournment
thereof. Proxies are expected to be mailed to shareholders on or about May 28, 2018, and their return will be solicited chiefly by mail; however, certain officers, directors, employees and agents of the Company, none of whom will receive
additional compensation therefor, may solicit proxies by telephone, facsimile transmission, electronic mail or other personal contact. The Company will bear the costs of the solicitation of proxies, including postage, printing and handling, and will
reimburse the reasonable expenses of brokerage firms and others for forwarding material to beneficial owners of Ordinary Shares.
2
Quorum
.
At the close of trading on May 14, 2018, the Company had
outstanding 48,506,282 Ordinary Shares
1
, each of which is entitled to one vote upon each of the matters to be presented at the Meeting. No less than two shareholders present in person or by proxy,
and holding or representing between them Ordinary Shares conferring in the aggregate more than 50% of the voting rights of the Company, shall constitute a quorum at the Meeting. The Board has determined that if within
one-half
hour from the time appointed for the holding of the Meeting a quorum is not present, the Meeting shall be adjourned to Thursday, June 28, 2018, at the same time and place. At any such adjourned
Meeting, if a quorum is not present within
one-half
hour from the specified time, any shareholders present in person or by proxy shall constitute a quorum even if they hold or represent shares conferring 50%
or less of the voting rights of the Company.
In determining whether there is a quorum for the Meeting and whether the required number of
votes for the approval of any given proposal has been cast, Ordinary Shares subject to abstentions or to broker
non-votes
are counted for purposes of determining whether there is a quorum for the Meeting but,
with regard to the applicable proposal, are not counted as having been voted in respect thereof. Broker
non-votes
are votes that brokers holding Ordinary Shares of record for their clients are, pursuant to
applicable stock exchange or other rules, precluded from casting in respect of certain
non-routine
proposals because such brokers have not received specific instructions from their clients as to the manner in
which such Ordinary Shares should be voted on those proposals and as to which the brokers have advised Orbotech that, accordingly, they lack voting authority.
Required vote
.
The affirmative vote of a simple majority of the voting rights of the Company represented and voting
thereon at the Meeting is necessary for the approval of the proposed resolutions, provided that: (a) with respect to Item 2 above, (i) that majority includes at least a majority of the votes cast by shareholders of the Company who are not
controlling shareholders and who do not have a personal interest in the matter as a result of a relationship with a controlling shareholder, who are present and voting (abstentions are disregarded); or (ii) that the votes cast by shareholders
who are not controlling shareholders and who do not have a personal interest in the matter as a result of a relationship with a controlling shareholder who are present and voted against the proposed resolution constitute two percent or less of the
total voting power of the Company (the
External Director Majority
); and (b) with respect to Items 4(a) and 4(b) above: (i) that majority includes at least a majority of the votes cast by shareholders of the Company who
are not controlling shareholders and who do not have a personal interest in the matter, who are present and voting (abstentions are disregarded); or (ii) that the votes cast by shareholders who are not controlling shareholders and who do not
have a personal interest in the matter who are present and voted against the proposed resolutions constitute two percent or less of the total voting power of the Company (the
Compensation Majority
).
Pursuant to the Companies Law: (i) each shareholder voting on Item 2 above is required to inform the Company as detailed below prior to
voting at the Meeting if the shareholder is a controlling shareholder of the Company and to indicate in the appropriate place in the proxy if the shareholder has a personal interest in the approval of Item 2 as a result of a relationship
with a controlling shareholder, as further detailed below (any of whom, an
Interested Party
); and (ii) each shareholder voting on Items 4(a) and 4(b) above is required to inform the Company as detailed below prior to voting
at the Meeting if the shareholder is a controlling shareholder of the Company and to indicate in the appropriate place in the proxy if the shareholder has a personal interest in the approval of Item 4(a) or 4(b), as applicable, as
further detailed below (any of whom, also an
Interested Party
).
Under the Companies Law, the term personal
interest is defined as a personal interest of a shareholder in an action or a transaction of a company, not including any interest arising solely from holding the companys
1
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Does not include, as at that date: (i) a total of 4,465,456 Ordinary Shares that were either subject to outstanding equity awards granted pursuant to equity remuneration plans of the Company or were available for
grant pursuant to such plans; and (ii) a total of 5,410,773 Ordinary Shares held as treasury shares, all as described in further detail under the heading Beneficial Ownership of Securities by Certain Shareholders and by Office
Holders.
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3
shares, including the personal interest of the shareholders spouse, siblings, parents, grandparents, descendants, spouses descendants, siblings or parents or the spouse of any of such
persons, and the personal interest of any entity in which the shareholder or one of the aforementioned relatives of the shareholder serves as a director or chief executive officer, or owns 5% or more of such entitys outstanding shares or
voting rights or has the right to appoint one or more directors or the chief executive officer. Under the Companies Law, in the case of a person voting by proxy, personal interest includes the personal interest of either the proxy holder
or the shareholder granting the proxy, whether or not the proxy holder has discretion over how to vote.
Generally, under the Companies
Law, a controlling shareholder is a shareholder who has the ability to direct the activities of a company (other than by holding a position in such company). A shareholder holding: (i) 50% or more of the voting rights of a company;
(ii) the right to appoint a majority of its directors; or (iii) the right to appoint its chief executive officer, is presumed to be a controlling shareholder for these purposes. For certain purposes, including with respect to the approval
of certain related party transactions, a shareholder holding 25% or more of the voting rights of a company would also be deemed a controlling shareholder, provided that there is no other person who holds more than 50% of the voting
rights of such company.
Special voting instructions under the Companies Law
. In order to provide for proper counting of
your vote, in the enclosed proxy you are required to indicate whether or not you are an Interested Party with respect to Items 2, 4(a) and/or 4(b), respectively. If you have not marked NO on the proxy (or in your electronic submission),
thereby confirming that you are not an Interested Party with respect to Items 2, 4(a) and/or 4(b), as relevant, your vote will not be counted for purposes of the External Director Majority with respect to Item 2, and will not be counted for purposes
of the Compensation Majority with respect to Items 4(a) and/or 4(b), as relevant, and your signature on the enclosed proxy (or the submission of an electronic vote) will constitute a certification that you are an Interested Party with respect to
Items 2, 4(a) and/or 4(b), as relevant.
As of the date of this Proxy Statement, the Company is not aware of any controlling shareholders
as such term is defined for purposes of the Companies Law. Accordingly: (a) the Company believes that none of its shareholders should have a personal interest in Item 2 as a result of a relationship with a controlling shareholder, and therefore
believes that all of its shareholders should mark NO in the appropriate place on the proxy (or in their electronic submission) with regard to Item 2; and (b) a shareholder would be an Interested Party in Items 4(a) and/or 4(b) only
if such shareholder had a personal interest therein, as defined above. The Company therefore believes that few, if any, of its shareholders would be an Interested Party with regard to Items 4(a) and/or 4(b) and that its shareholders
should generally mark NO in the appropriate place on the proxy (or in their electronic submission) with regard to Items 4(a) and 4(b).
The Company is unaware at this time of any other matters that will come before the Meeting. If any other matters properly come before the
Meeting, it is the intention of the persons designated as proxies to vote in accordance with their judgment on such matters. Shares represented by executed and unrevoked proxies will be voted in accordance with such judgment.
4
BENEFICIAL OWNERSHIP OF SECURITIES BY CERTAIN
SHAREHOLDERS AND BY OFFICE HOLDERS
The following table sets forth information as of May 14, 2018 (except with respect to the shareholders as noted below), concerning
(i) the only persons or entities known to the Company beneficially to own 5% or more of the outstanding Ordinary Shares; and (ii) the number of outstanding Ordinary Shares beneficially owned by all Office Holders (as defined below) as a
group.
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Identity of Person or
Group
|
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Number
of
Shares(1)
|
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Percentage of
Ordinary
Shares
Outstanding(1)
|
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·
Dr. Jacob
Richter (2)
Medinol Ltd.
Building No. 7, Entrance A, 5th Floor
Kiryat Atidim
P.O. Box
58165
Tel Aviv, 61581 Israel
|
|
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2,623,014
|
|
|
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5.41
|
%
|
|
|
|
·
Renaissance
Technologies LLC (3)
800 Third Avenue
New York, New York 10022
|
|
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2,526,394
|
|
|
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5.21
|
%
|
|
|
|
·
Clal
Insurance Enterprises Holdings Ltd. (4)
36 Raul Walenberg Street
Tel Aviv, 66180 Israel
|
|
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2,423,483
|
|
|
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5.00
|
%
|
|
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·
Office
Holders as a group
(consisting of 24 persons) (5)(6)
|
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4,256,022
|
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8.76
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%
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(1)
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The Company had outstanding, on May 14, 2018, 48,506,282 Ordinary Shares. This number does not include a total, as at that date, of 4,465,456 Ordinary Shares that were either subject to outstanding equity awards
granted pursuant to equity remuneration plans of the Company or were available for grant pursuant to such plans, of which: 417,157 were subject to outstanding options (317,574 of which had vested); 942,264 were subject to outstanding and unvested
RSUs (as defined below); and 3,106,035 remained available for future equity awards pursuant to such plans, comprised of:
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(a)
|
398,740 Ordinary Shares issuable pursuant to options awarded under the Equity Remuneration Plan for Key Employees of Orbotech Ltd. and its Affiliates and Subsidiaries (as Amended and Restated, 2005) (the
2000
Plan
), of which 317,574 had vested;
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(b)
|
177,305 Ordinary Shares issuable pursuant to equity awards under the 2010 Equity-Based Incentive Plan (the
2010 Plan
), of which:
|
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(i)
|
51,175 were subject to outstanding and unvested RSUs; and
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(ii)
|
126,131 remained available for future equity awards pursuant to the 2010 Plan; and
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(c)
|
3,889,411 Ordinary Shares issuable pursuant to equity awards under the 2015 Equity-Based Incentive Plan (the
2015 Plan
), of which:
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(i)
|
18,417 were subject to outstanding options (none of which had vested);
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(ii)
|
891,090 were subject to outstanding and unvested RSUs; and
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(iii)
|
2,979,904 remained available for future equity awards pursuant to the 2015 Plan.
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The above
number of Ordinary Shares outstanding also does not include a total of 5,410,773 Ordinary Shares held at that date as treasury shares, of which: (a) 1,993,918 (including 37,022 Ordinary Shares held on behalf of the Company by the trustee appointed
for purposes of the Companys equity remuneration
5
plans under Section 102 of the Israel Income Tax Ordinance (New Version), 1961 (the
Tax Ordinance
)) were owned by the Company as dormant shares under Israeli law and, for
so long as they are owned by the Company, confer no rights and, accordingly, are neither eligible to participate in or receive any future dividends which may be paid to shareholders of the Company nor entitled to participate in, be voted at or be
counted as part of the quorum for, any meetings of shareholders of the Company; and (b) 3,416,855 were owned by one or more subsidiaries of the Company and, for so long as they are owned by a subsidiary of the Company, confer no voting rights and,
accordingly, are not entitled to participate in, be voted at or be counted as part of the quorum for, any meetings of shareholders of the Company.
Because the Company uses the above number of Ordinary Shares outstanding as the calculation base, the percentage of Ordinary Shares
beneficially owned for each listed person or entity may differ from the percentage, if any, in the reports filed by such person or entity with the United States Securities and Exchange Commission (the
SEC
).
(2)
|
As of May 11, 2017, based on a report filed with the SEC on May 19, 2017, updated to reflect the actual number of Ordinary Shares owned. The report indicated sole voting and dispositive power as to none of
such Ordinary Shares, and shared voting and dispositive power as to 2,631,909 Ordinary Shares, with his wife, Dr. Judith Richter. Dr. Jacob Richter serves as a member of the Board. Dr. Jacob Richter and Yochai Richter, the Active
Chairman of the Board, are brothers.
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(3)
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As of January 4, 2018, based on a report filed with the SEC dated February 14, 2018. The report indicated sole dispositive power as to 2,526,394 Ordinary Shares, sole voting power as to 2,419,855 Ordinary
Shares and shared dispositive power as to 116,406 Ordinary Shares by Renaissance Technologies LLC (
RTC
), a Delaware limited liability company, and Renaissance Technologies Holdings Corporation (
RTHC
), a Delaware
corporation. RTC beneficially owns 2,642,800 Ordinary Shares, as does RTHC, through its majority ownership of RTC.
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(4)
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As of January 25, 2018, based on a report filed with the SEC dated February 5, 2018. The report indicated shared dispositive power and shared voting power as to 2,423,483 Ordinary Shares by Clal Insurance
Enterprises Holdings Ltd. (
Clal
), an Israeli public corporation and IDB Development Corporation Ltd. (
IDB Development
), an Israeli public corporation. Of the 2,423,483 Ordinary Shares reported as beneficially
owned by Clal, the report indicated that: (i) 107,150 Ordinary Shares are beneficially held for its own account; and (ii) 2,316,333 Ordinary Shares are held for members of the public through a variety of investment funds that are managed by
subsidiaries of Clal, which operate under independent management and make independent voting and investment decisions.
|
(5)
|
The term Office Holder as defined in the Companies Law includes a general manager, chief executive officer, executive vice president, vice president, any other person fulfilling or assuming any of the
foregoing positions without regard to such persons title, as well as a director, or a manager directly subordinate to the general manager or the chief executive officer. In addition to the 11 members of the Board, the Company considers 13
other individuals to be Office Holders as at May 14, 2018.
|
(6)
|
Includes 99,324 Ordinary Shares issuable upon the exercise of options or the vesting of RSUs referred to in footnote (1) above which had either vested as of, or will vest within 60 days from, May 14, 2018. The
percentage of Ordinary Shares beneficially owned is calculated in accordance with Rule
13d-3(d)
promulgated under the Securities Exchange Act of 1934 (the
Exchange Act
).
|
6
ITEMS 1 and 2
Election of Directors
All of the directors of the Company (other than external directors whose terms are determined in accordance with applicable law) are elected on
an annual basis to hold office until the end of the next annual general meeting of shareholders and until their successors have been duly elected and qualified or until any such directors appointment terminates as provided for under applicable
law or in the Articles. The external directors currently serve three year terms as required by Israeli law and are elected according to the Companies Law and the regulations promulgated thereunder.
The Articles provide that the minimum number of directors is three and the maximum number is eleven. As at May 14, 2018, the Board was
comprised of 11 members, three of whom were elected as external directors under the provisions of the Companies Law. The terms of office of one of these external directors, Mr. Avner Hermoni, will expire on August 3, 2018, and
Mr. Hermoni is a nominee for
re-election
as an external director at the Meeting, as discussed below.
In accordance with the Articles, any vacancies on the Board, including unfilled positions, may be filled by a resolution adopted by a majority
of the directors then in office, and each director chosen in this manner would hold office until the next annual general meeting of shareholders (or until the earlier termination of his or her appointment as provided for in the Companies Law or the
Articles).
Under the Companies Law and regulations promulgated thereunder, Israeli public companies are generally required to have on
their board of directors at least two external directors meeting certain independence criteria, all as provided under Israeli law. However, companies whose shares are traded on specified U.S. stock exchanges, including the Nasdaq Global Select
Market, and which do not have a controlling shareholder, may (but are not required to) elect to: (i) opt out of the requirement to maintain external directors, or, alternatively (ii) retain external directors but opt out of the composition
requirements under the Companies Law with respect to either or both of the audit and compensation committees; in each case, provided they meet the requirements of U.S. law and relevant stock exchange rules as applicable to domestic U.S. issuers with
respect to independent directors and the composition of audit and compensation committees. After considering this matter, the Board has decided not to elect to opt out of any such requirements at this time and to maintain the current regime.
External directors are elected for a term of three years at the general meeting of shareholders by a disinterested majority of the
shareholders (and cannot be appointed by the Board), and may generally be
re-elected
for two additional terms of three years each; each committee of a companys board of directors that has the authority
to exercise powers of the board of directors must include at least one external director, and its audit committee and remuneration committee must include all external directors. Under regulations promulgated pursuant to the Companies Law, companies,
such as the Company, whose shares are listed on specific exchanges outside of Israel, including Nasdaq, may elect external directors for additional terms that do not exceed three years each, beyond the three three-year terms generally applicable,
provided that, if an external director is being
re-elected
for an additional term or terms beyond the three three-year terms: (i) the audit committee and board of directors must determine that, in light
of the external directors expertise and special contribution to the board of directors and its committees, the
re-election
for an additional term is to the companys benefit; (ii) the external
director must be
re-elected
by the majority of shareholders required for the initial appointment of an external director and subject to the terms specified in the Companies Law; and (iii) the term during
which the nominee has served as an external director and the reasons given by the audit committee and board of directors for extending his or her term of office must be presented to the shareholders prior to their approval.
Among other requirements, a person may not be elected as an external director if such person, his or her relative, partner, employer, anyone
to whom he or she is directly or indirectly subordinate, or any entity under his or her control, has or had, on or within the two years preceding the date of his or her election, any affiliation (as defined in the Companies Law) with the
company, any controlling shareholder of the company, a relative of a controlling shareholder, or any entity controlled by the company or by a controlling shareholder of the company;
7
and if the company has no controlling shareholder or shareholder holding 25% or more of the companys voting rights, also with the chairman of the board of directors, the chief executive
officer or the most senior financial officer of the company, or with a shareholder holding 5% or more of the outstanding shares or voting rights of the company.
Pursuant to the Companies Law, an external director is required to have either financial and accounting expertise or professional
qualifications, according to criteria set forth under Israeli law, and generally, at least one external director is required to have financial and accounting expertise. In addition, the boards of directors of publicly traded companies are required
to make a determination as to the minimum number of directors who must have financial and accounting expertise based, among other things, on the companys size and the volume and complexity of its activities. The Board has determined that the
minimum number of directors with financial and accounting expertise, in addition to the external director or directors who have or may have such expertise, will be one, and that Mr. Dan Falk qualifies as such.
In addition to the external directors, a company may classify additional directors who meet the same
non-affiliation
criteria as external directors, and who have not served as directors of the company for more than nine consecutive years, as independent directors under the Companies Law. For these
purposes, ceasing to serve as a director for a period of two years or less would not be deemed to sever the consecutive nature of such directors service. A company, such as the Company, whose shares are listed for trading on specified
exchanges outside of Israel, including the Nasdaq Global Market and the Nasdaq Global Select Market, may also classify directors who qualify as independent directors under the relevant
non-Israeli
rules
relating to independence standards and who meet certain
non-affiliation
criteria, as independent directors under the Companies Law, all as provided under regulations promulgated under the Companies
Law. The Company has classified Mr. Dan Falk as an independent director under the Companies Law.
External directors and independent
directors may receive compensation solely as provided for in the Companies Law and regulations promulgated pursuant thereto governing the terms of compensation payable to external directors (the
Compensation Regulations
). In
addition, the Companies Law includes specific provisions with respect to the manner in which external directors and independent directors may be dismissed from office. Following termination of service, external directors and independent directors
and their relatives are subject to certain restrictions with respect to receipt of benefits, service as an Office Holder, employment and provision of professional services to the company or a controlling shareholder thereof (or any entity controlled
by a controlling shareholder).
Dr. Michael Anghel, Mr. Avner Hermoni and Mr. Joseph Tenne currently serve as external
directors under the applicable provisions of the Companies Law. Following the recommendation of the Nominating Committee of the Board (the
Nominating
Committee
), the Board is recommending that at the Meeting, shareholders
approve the
re-election
of Mr. Avner Hermoni as an external director for a term of three years.
In addition, following the recommendation of the Nominating Committee, the Board is recommending that at the Meeting, shareholders approve the
re-election
as directors of all of the eight
non-external
directors currently in office: Mr. Yochai Richter, Mrs. Yehudit Bronicki, Mr. Dan Falk,
Mr. Miron Kenneth, Dr. Jacob Richter, Mr. Eliezer Tokman, Prof. Shimon Ullman and Mr. Arie Weisberg, each for a term of approximately one year expiring at the Companys annual general meeting of shareholders to be held in
2019.
It should be noted that notwithstanding the foregoing, pursuant to the Merger Agreement, the directors of Orbotech serving on the
Companys board immediately prior to the Closing would cease to be directors of the surviving company in the Proposed Merger as of such date.
In accordance with Israeli law, a nominee for service as a director must submit a declaration to the Company, prior to his or her election,
specifying that he or she has the requisite qualifications to serve as a director, independent director or external director, as applicable, and the ability to devote the appropriate time to
8
performing his or her duties as such. All nominees for election as directors at the Meeting have declared in writing that they possess the requisite skills and expertise, as well as sufficient
time, to perform their duties as a director of the Company.
Set forth below is information, as at May 14, 2018, concerning all
directors of the Company and nominees for election as directors at the Meeting.
Nominees for terms expiring in 2019
Directors whose current terms expire at the 2018 Annual General Meeting
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Name
|
|
Principal Occupation or
Employment
|
|
Date of Birth
|
|
Director
Since
|
|
Beneficial
Ownership
of Ordinary
Shares(1)
|
|
Percentage of
Ordinary
Shares
Outstanding(1)
|
Yochai Richter (2)
|
|
Active Chairman of the Board
|
|
September 17, 1942
|
|
|
|
1992
|
|
|
|
|
1,021,866
|
|
|
|
|
2.11
|
%
|
|
|
|
|
|
|
Yehudit Bronicki (3)
|
|
Director
|
|
December 29, 1941
|
|
|
|
2000
|
(4)
|
|
|
|
19,483
|
|
|
|
|
|
(5)
|
|
|
|
|
|
|
Dan Falk (3)(6)(7)
|
|
Company Director and Consultant
|
|
January 12, 1945
|
|
|
|
1997
|
|
|
|
|
19,483
|
|
|
|
|
|
(5)
|
|
|
|
|
|
|
Miron Kenneth (3)
|
|
Company Director
|
|
June 6, 1956
|
|
|
|
2014
|
|
|
|
|
0
|
|
|
|
|
|
(5)
|
|
|
|
|
|
|
Dr. Jacob Richter (2)
|
|
Chairman of the board of directors of Medinol Ltd.
|
|
December 24, 1945
|
|
|
|
2012
|
(8)
|
|
|
|
2,623,014
|
|
|
|
|
5.41
|
%
|
|
|
|
|
|
|
Eliezer Tokman (3)(9)
|
|
Chairman of the board of directors of FirstPoint Mobile Guard Ltd.
|
|
May 13, 1950
|
|
|
|
2007
|
|
|
|
|
17,951
|
|
|
|
|
|
(5)
|
|
|
|
|
|
|
Prof. Shimon Ullman (3)(10)
|
|
Professor of Computer Science, Weizmann Institute of Science
|
|
January 28, 1948
|
|
|
|
1992
|
|
|
|
|
132,838
|
|
|
|
|
|
(5)
|
|
|
|
|
|
|
Arie Weisberg (3)
|
|
Company Director and Consultant
|
|
October 19, 1950
|
|
|
|
2010
|
|
|
|
|
67,556
|
|
|
|
|
|
(5)
|
Nominee for term expiring in 2021
External Director whose term will expire in 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Principal Occupation or
Employment
|
|
Date of Birth
|
|
Director
Since
|
|
Beneficial
Ownership
of Ordinary
Shares(1)
|
|
Percentage of
Ordinary
Shares
Outstanding(1)
|
Avner Hermoni (3)(6)
|
|
Vice President Asia Pacific at Bermad CS Ltd.
|
|
December 5, 1947
|
|
|
|
2012
|
|
|
|
|
9,745
|
|
|
|
|
|
(5)
|
Continuing Directors
Current External Directors
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|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Principal Occupation or
Employment
|
|
Date of Birth
|
|
Director
Since
|
|
Beneficial
Ownership
of Ordinary
Shares(1)
|
|
Percentage of
Ordinary
Shares
Outstanding(1)
|
Michael Anghel (3)(11)
|
|
Company Director
|
|
January 13, 1939
|
|
|
|
2008
|
(12)
|
|
|
|
23,076
|
|
|
|
|
|
(5)
|
|
|
|
|
|
|
Joseph Tenne (3)(11)
|
|
Financial Consultant to Itamar Medical Ltd.
|
|
October 17, 1955
|
|
|
|
2014
|
|
|
|
|
6,600
|
|
|
|
|
|
(5)
|
9
(1)
|
The number and percentage of Ordinary Shares beneficially owned is calculated in accordance with Rule 13d3(d) promulgated under the Exchange Act. Includes: 14,747 Ordinary Shares (in the case of Dr. Anghel);
14,747 Ordinary Shares (in the case of Mrs. Bronicki); 11,080 Ordinary Shares (in the case of Dr. Jacob Richter); 3,217 Ordinary Shares (in the case of Mr. Tenne); 11,080 Ordinary Shares (in the case of Mr. Tokman); 14,747
Ordinary Shares (in the case of Prof. Ullman); and 1,608 Ordinary Shares (in the case of Mr. Weisberg) subject to vested but unexercised options. Also includes, in the case of certain directors, shares issued as restricted shares (the
applicable restrictions in respect of all of which have lapsed in full).
|
(2)
|
Yochai Richter and Dr. Jacob Richter are brothers.
|
(3)
|
Independent director in accordance with the applicable Nasdaq listing standards.
|
(4)
|
Mrs. Bronicki also served as a director of the Company between August 15, 1993 and February 27, 1994.
|
(6)
|
Member of the Audit Committee of the Board (the
Audit Committee
), the Remuneration Committee of the Board (the
Remuneration Committee
) and the Nominating Committee.
|
(7)
|
Mr. Falk has been designated as the Audit Committee Financial Expert under applicable rules and regulations of the SEC and has also been classified as an independent director under the Companies Law.
|
(8)
|
Dr. Richter also served as a director of the Company between October 27, 1992 and August 15, 1993 and between September 29, 1997 and February 11, 2009.
|
(9)
|
Member of the Remuneration Committee.
|
(10)
|
Member of the Nominating Committee.
|
(11)
|
Member of the Audit Committee and the Remuneration Committee.
|
(12)
|
Dr. Anghel also served as a director of the Company between April 1, 1986 and October 27, 1992, and between November 19, 1992 and June 25, 2006. Between June 21, 2000 and June 25,
2006, Dr. Anghel served two terms as an external director, the second of which expired on June 25, 2006. He was
re-elected
as an external director commencing on September 18, 2008, again
commencing on June 26, 2011, again commencing on July 10, 2014, and again commencing on June 29, 2017.
|
***********
Yochai Richter has
been the Active Chairman of the Board since May 8, 2006, and was the Chief Executive Officer of the Company from November 2002 to May 8, 2006. He was the President and Chief Executive Officer from November 1994 to November 2002 and was a
joint Managing Director and Chief Executive Officer from October 1992 to November 1994. Mr. Richter was among the founders of Orbot Systems Ltd. (
Orbot
) and served as a member of the board of directors and as a managing
director of that company from its organization in 1983 until the acquisition by the Company, in 1992, of all of the outstanding shares of Orbot (the
Orbot Merger
). He received his degree in mathematics from the Technion-Israel
Institute of Technology (the
Technion
) in Haifa in 1972.
Dr. Michael Anghel serves as a member of the board of
directors of Partner Communications Company Ltd., Syneron Medical Ltd. and BioLineRx Ltd., all of which are Israeli Nasdaq-listed companies. He is also a director of the Strauss-Group Ltd. and Dan Hotels Corporation Ltd., both of which are Israeli
companies listed on the Tel Aviv Stock Exchange (the
TASE
). From 2004 to 2005, Dr. Anghel served as the president and chief executive officer of Discount Capital Markets Ltd. In 1999, he founded CAP Ventures Ltd., and served
as its managing director from 1999 to 2004. From 1977 to 1999, he served as director and senior manager of Discount Investment Corporation Ltd. Dr. Anghel has been instrumental in founding several major Israeli communications operating
companies as well as a variety of other advanced technology ventures. Dr. Anghel was formerly a full-time member of the faculty of the Graduate School of Business Administration of Tel Aviv University and currently serves as chairman of Lahav,
its Executive Program. Dr. Anghel received his bachelors degree in economics from the Hebrew University of Jerusalem (the
Hebrew University
) and his masters degree in business administration and a doctorate in
finance and business from Columbia University.
10
Yehudit Bronicki serves as a member of the boards of directors of Yissum Research
Development Company of the Hebrew University of Jerusalem Ltd. and the Aaron Institute for Economic Policy at the Interdisciplinary Center in Herzliya, and of the managing board of Insights in Education, an Israeli
non-profit
association. She is a member of the Advisory Board to the National Economic Council and of the Boards of Governors of the Hebrew University and the Tel Aviv Yafo Academic College, and also serves as
chair of the Public Forum for Technological Education. In addition, Mrs. Bronicki serves as a member of the board of directors of Bronicki Investments Ltd., a privately held Israeli company. From 1991 to July 2014, Mrs. Bronicki served as
the managing director of Ormat Industries Ltd. (
Ormat Industries
), an Israeli company, the predecessor of which, Ormat Turbines Ltd., she
co-founded
in 1965. Mrs. Bronicki was also the
chief executive officer of Ormat Technologies, Inc. (
Ormat Technologies
), a Delaware New York Stock Exchange-listed company, and its subsidiaries until July 2014, and remained a member of the board of directors of Ormat
Technologies and its principal subsidiaries until November 2015. Mrs. Bronicki served as a member of the Advisory Board of the Bank of Israel between 1994 and 2001. Mrs. Bronicki, together with her husband Yehuda, is the 2018 recipient of
the Israel Prize for Industry. Mrs. Bronicki received her bachelors degree in social sciences from the Hebrew University, followed by advanced studies in management, finance and marketing.
Dan Falk serves as a member of the boards of directors of NICE Ltd. (
NICE
) and Attunity Ltd., both of which are Israeli
Nasdaq-listed companies, and of Ormat Technologies. From July 1999 to November 2000, he served as the president and chief operating officer of Sapiens International Corporation N.V., a Netherlands Antilles company. He was Executive Vice President of
the Company from August 1995 to July 1999 and, between June 1994 and August 1995, served as its Executive Vice President and Chief Financial Officer. Prior thereto, he was Vice President and Chief Financial Officer of the Company from October 1992
until June 1994. He was director of finance and chief financial officer of Orbot from 1985 until consummation of the Orbot Merger. He received a masters degree in business administration in 1973 from the Hebrew University School of Business
and had 15 years experience in finance and banking, including senior positions at Discount Bank, prior to joining Orbot.
Avner
Hermoni serves as vice president Asia Pacific at Bermad CS Ltd., an Israeli agricultural
co-operative
society, and from 2007 to December 2014, he served as chief executive officer of NaanDanJain Irrigation
Ltd., an Israeli company. From 2003 to 2005, he was chief operations officer of NICE and, from 2000 to 2003, was chief executive officer of Shiron Satellite Communications Ltd. From 1997 to 1999, he simultaneously held the positions of president at
Kulicke & Soffa (Israel) Ltd. and corporate vice president at Kulicke & Soffa Industries, Inc., a Nasdaq-listed company. From 1990 to 1997 he served as president of Orbot Instruments Ltd. From 1986 to 1989 he served as
co-managing
director of Orbots subsidiary in Belgium. Mr. Hermoni holds a bachelors degree in economics from the University of Haifa.
Miron Kenneth serves as a member of the board of directors of Allot Communications Ltd., and Nova Measuring Instruments Ltd., both Israeli
Nasdaq-listed companies, and also serves as the chairman of the board of directors of Teridion Technologies Ltd., an Israeli company specializing in overlay network technologies for service providers, and of Varada Ltd., an Israeli company which
provides cloud-based databases for analytics. From 2011 to 2013, he was chief executive officer of Pontis Ltd. and, from 2001 to 2011, was chairman and chief executive officer of Voltaire Ltd. Mr. Kenneth received his bachelors degree in
economics and computer science from Bar Ilan University in 1982 and his masters degree in business administration from Golden Gate University in 1985.
Dr. Jacob Richter serves as the chairman of the board of directors and chief technology officer of Medinol Ltd., an Israeli company, and
has been a director of that company since 1993 and also serves on the boards of directors of a number of other privately held companies. He was managing director of MarathonCapital Development Fund Ltd., an Israeli venture capital fund, from
1992 to 1994, and was director of marketing of Orbot from January 1992 until consummation of the Orbot Merger. Previously, he was director of new product development of Orbot from January 1990 until 1992, and director of product development of Orbot
from 1986 until 1990. Prior to joining Orbot he was head of research and development of the Israeli Air Force. He holds a
11
doctorate in brain research from Tel Aviv University and has worked as a post-doctoral and research fellow at the Artificial Intelligence Laboratory of The Massachusetts Institute of Technology
(
MIT
).
Joseph Tenne serves as a financial consultant to Itamar Medical Ltd., an Israeli TASE-listed company, and from
August 2014 to April 2017, served as vice president finance and chief financial officer of that company. Mr. Tenne is a member of the boards of directors of AudioCodes Ltd., an Israeli Nasdaq and TASE-listed company, MIND C.T.I. Ltd., an
Israeli Nasdaq-listed company, Ability Inc., a Cayman Islands Nasdaq-listed company, and OPC Energy Ltd. and Ratio Oil Explorations (Finance) Ltd., both Israeli TASE-listed companies. From March 2014 to July 2014, Mr. Tenne served as the chief
financial officer of Orgenesis Inc., a Nevada
Over-The-Counter
QB listed company. From March 2005 to April 2013, Mr. Tenne served as the chief financial officer of
Ormat Technologies and from January 2006 to April 2013, he also served as the chief financial officer of Ormat Industries. From 2003 to 2005, Mr. Tenne was the chief financial officer of Treofan Germany GmbH & Co. KG, a German company.
From 1997 to 2003, Mr. Tenne was a partner in Kesselman & Kesselman, Certified Public Accountants in Israel and a member of PricewaterhouseCoopers International Limited (
PwC
). Mr. Tenne is a certified public
accountant in Israel and holds a bachelors degree in accounting and economics and masters degree in business administration from Tel Aviv University.
Eliezer Tokman currently serves as chairman of the board of directors of FirstPoint Mobile Guard Ltd., an Israeli company. From 2008 to 2015,
Mr. Tokman served as the chief executive officer of Siemens Israel. From 2001 to 2002, he served as senior vice president at Philips Medical Systems responsible for business integration, and from 1998 to 2001, he was employed by Marconi Medical
Systems in the positions of senior vice president for product strategies and director of global computed tomography (CT) engineering. From 1977 to 1998, Mr. Tokman was employed within the Elscint group of companies in a variety of managerial
roles, including as president of Elscint America and general manager of the CT division. Mr. Tokman holds a bachelors degree in electrical engineering from the Technion.
Prof. Shimon Ullman holds the position of professor of computer science in the Computer Science and Applied Mathematics Department of the
Weizmann Institute of Science and served as head of that department from 1994 to 2003. He was the chief scientist of Orbot from its organization in 1983 until consummation of the Orbot Merger and of the Company following the Orbot Merger until 2005.
Between 1986 and 1993 Prof. Ullman was a full professor at the Artificial Intelligence Laboratory of MIT. From 1997 to 2003, he served on a part-time basis as the chief scientist for new products development in the process diagnostic and control
product business group of Applied Materials, Inc. Prof. Ullman is a member of the Israel Academy of Sciences and Humanities and the American Academy of Arts & Sciences. He is the 2015 recipient of the Israel Prize for Mathematics and
Computer Science, the 2014 recipient of the EMET prize for science, art and culture and the 2008 recipient of the international Rumelhart award in human cognition.
Arie Weisberg serves as a member of the board of directors of Plastopil Hazorea Company Ltd., an Israeli TASE-listed company. He also acts as
a consultant to various companies. From May 2006 to June 2009, he was President and Chief Operating Officer of the Company. From November 2002 to May 2006, he was
Co-President
for Global Resources, and from
August 2000 to November 2002 he served as Executive Vice President for Global Resources. From January to August 2000, he was Corporate Executive Vice President for Global Resources and Chief Financial Officer. From August 1995 to January 2000, he
was Corporate Vice President for Finance and Administration and Chief Financial Officer. From January 1993 to August 1995, he was
co-general
manager of Orbotech S.A. and from July 1991 to January 1993, he was
director of finance and operations of Orbots subsidiary in Belgium. Prior to joining Orbot he was, from 1988 to 1991, general manager of Sinus Ltd., a manufacturer of internal combustion valves, and from 1984 to 1988, he was west region
general manager of Solcoor Inc. He received his bachelors degree in agricultural economics from the Hebrew University.
Committees of the Board
The Articles provide that the Board may delegate any, or all, of its powers to one or more committees of the Board, and may entrust to
and confer upon a managing director, general manager, chief executive officer and/or
12
president (or any similar function with a different title) such of its powers as it deems appropriate. However, the Companies Law provides that certain powers and authorities (for example, the
power to approve the financial statements) may not be delegated and may be exercised only by the Board. In addition, the Companies Law requires public companies such as the Company to appoint an audit committee and a remuneration committee.
Currently, the Board has three standing committees: the Audit Committee, the Remuneration Committee and the Nominating Committee.
The Companies Law requires public companies to appoint an audit
committee comprised of at least three directors. For as long as the Company does not opt out of the requirement under the Companies Law to maintain external directors or, alternatively, opt out of the audit committee composition requirements, the
Audit Committee must include all of the external directors, one of whom shall serve as the chairperson of the committee. An audit committee must be comprised of a majority of independent directors under applicable law and may not include certain
directors. Generally, any person who is not entitled to be a member of the audit committee may not attend the audit committees meetings. A companys independent and internal auditors generally need to be notified of meetings of its audit
committee and are generally entitled to participate in such meetings.
The responsibilities of the Companys Audit Committee under
the Companies Law and its charter include, among other things: (a) overseeing: (i) the accounting and financial reporting processes of the Company; (ii) the integrity of the Companys financial statements; (iii) the
Companys compliance with legal and regulatory requirements and certain ethical standards; (iv) the qualifications, independence and performance of the Companys independent auditors; (v) the Companys internal control
structure; and (vi) managements antifraud program and controls, including identification of fraud risks and implementation of anti-fraud measures; (b) examining the independent auditors scope of work as well as the independent
auditors fees and providing its recommendations to the appropriate corporate organ; (c) considering and deliberating upon flaws in the management of the Companys business, making recommendations to the Board as to how to correct
them and providing for arrangements regarding employee complaints with respect thereto; and (d) approving actions or transactions, which, under Israeli law, require audit committee approval, including certain related party transactions and
transactions involving potential conflicts of interest.
In carrying out its duties, the Audit Committee meets with management at least
once in each fiscal quarter at which time, among other things, it reviews, and either approves or disapproves, the financial results of the Company for the immediately preceding fiscal quarter and conveys its conclusions in this regard to the Board.
The Companys independent and internal auditors also report regularly to the Audit Committee at its meetings, and the Audit Committee discusses with the Companys independent auditors the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the Companys financial statements, as and when it deems it appropriate to do so. The Audit Committee also monitors generally the services
provided by the Companys independent auditors to ensure their independence, and reviews all audit and
non-audit
services provided by them.
Under the provisions of the Sarbanes-Oxley Act of 2002 (the
Sarbanes-Oxley Act
), the Audit Committee is responsible for the
appointment, compensation, retention and oversight of the work of the Companys independent auditors. However, under Israeli law and the Companys Articles, the appointment of independent auditors requires the approval of the shareholders
of the Company, and their compensation requires the approval of the Board. In addition, pursuant to the Companies Law, the Audit Committee is required to examine the independent auditors scope of work as well as the independent auditors
fees and to provide its recommendations with respect thereto to the appropriate corporate organ. Accordingly, the appointment of the independent auditors will be required to be approved and recommended to the shareholders by the Audit Committee and
approved by the shareholders. The compensation of the independent auditors for audit services will be required to be approved and recommended to the Board by the Audit Committee and approved by the
13
Board. The Board has delegated its authority to approve the compensation of independent auditors for
non-audit
services to the Audit Committee, which in
turn may delegate such authority to one or more members of the Audit Committee.
Dr. Michael Anghel, Mr. Dan Falk,
Mr. Avner Hermoni and Mr. Joseph Tenne are the current members of the Audit Committee, with Dr. Anghel serving as its chairperson. Each of them is an independent director in accordance with the applicable Nasdaq listing
standards and in accordance with the Companies Law. In addition, Mr. Falk has been designated as the Audit Committee Financial Expert under applicable rules and regulations of the SEC.
(ii)
|
Remuneration Committee
|
The Companies Law requires public companies to appoint a
remuneration committee comprised of at least three directors. For as long as the Company does not opt out of the requirement under the Companies Law to maintain external directors or, alternatively, opt out of the remuneration committee composition
requirements, the Remuneration Committee must include all of the external directors, one of whom shall serve as the chairperson of the committee, and may not include certain directors. All other members of the committee, who are not external
directors, must be directors who receive compensation that is in compliance with the Companies Law and the Compensation Regulations.
The
responsibilities of the Remuneration Committee under the Companies Law and its charter include, among other things: (i) making recommendations to the Board with respect to the approval of the Compensation Policy (as defined below) and any
extensions thereto; (ii) periodically reviewing the implementation of the Compensation Policy and providing the Board with recommendations with respect to any amendments or updates thereto; (iii) reviewing and resolving whether or not to
approve arrangements with respect to the Terms of Office and Employment of Office Holders (as defined below); (iv) overseeing the administration of the various compensation plans and arrangements of the Company, and, to the extent appropriate, the
subsidiaries of the Company; (v) assisting the Board in fulfilling its responsibilities relating to the compensation of directors, the Chief Executive Officer and other officers of the Company; and (vi) reviewing and approving the
Companys goals and objectives relevant to the compensation of its officers and determining eligibility for their incentives.
In
carrying out these duties, the Remuneration Committee meets on an ad hoc basis (usually several times in each fiscal year). Under the Companies Law, the Remuneration Committee may need to seek the approval of the Board and the shareholders for
certain compensation decisions as described above. Generally, any person who is not entitled to be a member of the Remuneration Committee, including the Chief Executive Officer and other members of management, may not attend meetings of the
Remuneration Committee or be present during the Committees deliberations or when resolutions are adopted, unless and to the extent determined otherwise by the chairperson of the Remuneration Committee in accordance with the Companies Law and
applicable Nasdaq listing standards.
Dr. Michael Anghel, Mr. Dan Falk, Mr. Avner Hermoni, Mr. Joseph Tenne and
Mr. Eliezer Tokman are the current members of the Remuneration Committee, with Dr. Anghel serving as its chairperson. Each of them is an independent director in accordance with the applicable Nasdaq listing standards.
(iii)
|
Nominating Committee
|
The primary purposes of the Nominating Committee are to identify
individuals qualified to become directors, to recommend such individuals for nomination for election as directors and to make recommendations to the Board concerning committee appointments. In undertaking this task, the Nominating Committee takes
into account the composition requirements and qualification criteria set forth in the Companies Law and the applicable Nasdaq listing standards, and determines the other criteria, objectives and procedures for selecting members of the Board and
committee members, including factors such as independence, diversity, age, integrity,
14
skills, expertise, breadth of experience, values, ethical standards, business judgment, knowledge about the Companys business or industry and willingness to devote adequate time and effort
to the responsibilities of the Board in the context of the existing composition and needs of the Board and its committees. When considering the nomination (including for
re-election)
of members to the Board,
the Nominating Committee reviews such nominees positions and interests in other companies or firms, in order to identify any conflicts or potential conflicts of interest and other matters of relevance, and recommends to the Board whether these
positions and conflicts (to the extent identified) should be authorized.
Membership of the Nominating Committee is limited to
independent directors in accordance with the applicable Nasdaq listing standards who meet the composition requirements of the Companies Law, as in effect from time to time. However, under the Companies Law, the Company is not required to
have an independent nominating committee as would be required under Nasdaq rules and it may in the future opt to appoint members who do not meet the Nasdaq independence standards. For as long as the Company does not opt out of the requirement under
the Companies Law to maintain external directors, the Nominating Committee must include at least one external director.
Mr. Dan
Falk, Mr. Avner Hermoni and Prof. Shimon Ullman are the current members of the Nominating Committee, with Mr. Falk serving as its chairperson. Each of them is an independent director in accordance with the applicable Nasdaq
listing standards.
Executive Sessions
At least twice per annum, the independent directors of the Company (in accordance with the applicable Nasdaq listing standards)
meet in executive sessions, which no other persons have the right to attend. These meetings are intended to provide a forum in which the Companys independent directors can discuss any issues that they consider relevant in their
capacity as such.
Board and Committee Meeting Attendance
Since the 2017 annual general meeting of shareholders, each director, other than Dr. Jacob Richter, has attended at least 75% of the
meetings of the Board and its committees on which he or she served. During this period, Dr. Richter attended 71% of the meetings of the Board.
Certain Transactions
Yochai Richter has
an employment agreement with the Company pursuant to which he serves as Active Chairman of the Board. For further information see Executive Remuneration
Remuneration of the Active Chairman of the Board.
For information concerning the remuneration of directors and the eligibility and participation of directors in the Directors Annual Equity
Award Plan (as defined below) and information concerning unexercised options held by directors and nominees for election as directors, including awards made during 2017, see Executive Remuneration
Remuneration of the Active Chairman of
the Board;
Other Directors Remuneration; and Equity Awards to Directors.
For information concerning the
insurance, indemnification and release of the directors, the chief executive officer and other Office Holders of the Company, see Executive Remuneration
Insurance, Indemnification and Release.
Certain equity awards held by certain Office Holders of the Company are subject to accelerated vesting in the event of such Office
Holders death or in connection with certain terminations of employment or continued employment for a specified period of time, in each case, following a change in control of the Company, which
15
would include shareholder approval of a business combination or merger such as the Proposed Merger. In addition, certain Office Holders are, under certain circumstances, eligible for increased
severance pay and other termination-related payments.
Pursuant to the Companies Law, the Company is required to adopt a compensation
policy with respect to the Terms of Office and Employment (as defined below) of the Companys Office Holders (a
Compensation Policy
). The Companys current Compensation Policy was approved by the shareholders at the 2016
annual general meeting of shareholders (the
2016 AGM
).
Executive Remuneration
The following table sets forth, as a group, for all persons who were, at any time during 2017, Office Holders of the Company, all remuneration
paid or accrued by the Company in respect of the fiscal year ended December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, fees,
directors fees, and
bonuses (including
deferred compensation)
|
|
|
Securities or property, insurance
premiums or reimbursement,
personal benefits (including benefits
in kind) and
payments or accruals
for retirement, severance, disability
or similar payments
|
|
|
Amount recognized
for financial statement
reporting purposes
for equity awards
|
|
2017 Office Holders as a group (consisting of 23 persons)(1)
|
|
$
|
11,117,415
|
|
|
$
|
870,833
|
|
|
$
|
3,806,865
|
|
(1)
|
In addition to the 11 individuals who served as members of the Board during 2017, the Company considers 12 other individuals, including its Chief Executive Officer, its President and Chief Operating Officer, its
Corporate Vice President and Chief Financial Officer, its Corporate Executive Vice President, Chief Technology Officer and Head of Innovation and the President and Chief Operating Officer of SPTS Technologies Group Limited and its consolidated
subsidiaries, to have been Office Holders in 2017. One of these 12 individuals was no longer an Officer Holder as of May 14, 2018.
|
For information concerning compensation granted to the Companys five most highly compensated Office Holders with respect to the year
ended December 31, 2017, see Item 6
Directors, Senior Management and Employees
B. Compensation
(b) Individual Compensation of Covered Executives in the Companys Annual Report on Form
20-F
for the year ended December 31, 2017. In addition, during the period from January 1, 2018 to May 14, 2018, a special grant of 60,000 RSUs, of which 15,000 RSUs are subject to performance
criteria, was awarded to one Office Holder of the Company. Such grant, which was made pursuant to, and subject to the terms and conditions of the 2015 Plan, which was approved by the Board in 2017 and which will vest in two equal installments on the
first and second anniversaries of the grant date, subject to applicable vesting conditions. These awards are pursuant to, and subject to the terms and conditions of, the 2015 Plan.
(a) Approval Required for Directors Compensation
The Company first adopted a Compensation Policy in 2013. The Companys current Compensation Policy was approved by the Board in 2016,
after considering the recommendations of the Remuneration Committee, and by the Companys shareholders at the 2016 AGM.
Pursuant to
the Companies Law, any arrangement between the Company and its Office Holders, which term includes directors, as to their terms of office and employment, including with respect to: the exemption and release of the Office Holder from liability for
breach of his or her duty of care to the Company; any undertaking to indemnify the Office Holder or provide post factum indemnification or insurance; any grant, payment, remuneration, compensation, or other benefit payable in connection with
termination of service of an Office Holder; and any other benefit, payment or undertaking to provide any payment that may be made to an Office Holder (collectively, the
Terms of Office and Employment
), must generally be consistent
with the
16
Compensation Policy and generally requires the approval of the Remuneration Committee, the Board and, with respect to certain Office Holders (including directors) and in certain circumstances,
the shareholders. As discussed above, the Companies Law and the Compensation Regulations provide that the compensation payable to external directors and independent directors under the Companies Law is subject to certain further
limitations.
(b) Remuneration of the Active Chairman of the Board
Yochai Richter has an employment agreement with the Company pursuant to which he currently serves as Active Chairman of the Board. The
agreement is terminable by Mr. Richter on 60 days notice and by the Company on 30 days notice as required by law. Upon a termination of employment at any time, Mr. Richter is entitled to receive a lump sum payment equal to
twelve months salary and certain benefits in effect at the time of termination. He is also entitled to receive a severance payment in cash equal to: (i) in the event of his resignation from employment, 150% of his monthly salary and
certain benefits multiplied by the number of years he was employed by the Company (commencing with his employment by Orbot in 1982); or (ii) in the event of a termination of his employment agreement by the Company (other than for
cause, as defined in his employment agreement), 200% of his monthly salary and certain benefits multiplied by the number of years he was employed by the Company (commencing with his employment by Orbot in 1982).
The Audit Committee, the Board and the shareholders have approved the terms of Mr. Richters continued employment with the Company,
including a monthly salary of $33,000 and an annual bonus equivalent to 1% of the net annual profit of the Company. A bonus of $1,320,000 was paid to Mr. Richter in respect of 2017. Pursuant to shareholder approval, commencing from the 2010
annual general meeting of shareholders, Mr. Richter became eligible to participate in the Directors Annual Equity Award Plan and will, for as long as he remains the Chairman of the Board or an eligible director (as defined in the
Directors Annual Equity Award Plan), continue to do so.
The above terms of Mr. Richters employment and service were approved
prior to the time the Company first became required to adopt a Compensation Policy. Any change to the terms described above will be subject to the approval process and other conditions set forth in the Companies Law.
(c) Other Directors Remuneration
Under arrangements previously approved by the Audit Committee, the Board and the shareholders of the Company, and
re-approved
by the Remuneration Committee, the Board and the shareholders with the approval of the initial Compensation Policy at the 2013 annual general meeting of shareholders, each of the members of the Board who
is not, or will in the future cease to be, an employee of the Company, including external directors, is entitled to receive, as of September 2008: (i) an annual payment of NIS 65,000 plus applicable value added tax (
VAT
); and
(ii) a per meeting fee of NIS 2,500 plus VAT for every meeting of the Board or any committee thereof that the director attends. In addition: (A) the annual payment and the per meeting fee of all such directors will be adjusted annually to
reflect changes in the Israeli Consumer Price Index in the manner provided in the Compensation Regulations; (B) in the event that a director participates in a meeting by means of communication pursuant to Section 101 of the Companies Law,
the Company will pay 60% of the per meeting fee; (C) in the event a resolution is adopted by the Board without a meeting pursuant to Section 103 of the Companies Law, the Company will pay 50% of the per meeting fee; and (D) the annual
payment will be paid in four equal installments, and per meeting fee will be remitted to the directors on a quarterly basis, in each case at the beginning of each calendar quarter with respect to the previous quarter, all as provided for in the
Compensation Regulations. On May 14, 2018, after adjustment as described in (A) above, the annual payment to each
non-employee
director described in (i) above was NIS 74,360 (approximately
$20,725 based on the exchange rate of NIS 3.588 = $1.00 published by the Bank of Israel in respect of April 30, 2018 (the
Current Exchange Rate
); and the per meeting fee paid to each
non-employee
director was NIS 2,860 (approximately $795 based on the Current Exchange Rate).
17
On July 14, 2005, the shareholders of the Company approved a directors equity
remuneration plan for certain directors, including external directors, of the Company (the
Directors Annual Equity Award Plan
), which was amended with shareholder approval at the 2010 and 2015 annual general meetings of
shareholders. Under the Directors Annual Equity Award Plan, each director who is in office immediately after any annual general meeting of shareholders, including external directors and including directors who are employees of the Company, but not
including the Chief Executive Officer (even if a director), in addition to the existing annual and per meeting fees, will be granted equity awards, comprised of
Restricted Shares
(which are Ordinary Shares awarded subject to
certain transfer restrictions, forfeiture conditions and/or other terms and conditions) or
RSUs
(which are awards representing an unfunded and unsecured promise to deliver Ordinary Shares, cash, other securities or other property
in accordance with certain terms and conditions), with an aggregate grant-date value equal to the lesser of $75,000 and the value of 6,250 Restricted Shares with respect to the Chairman of the Board, and with an aggregate grant-date value equal to
the lesser of $60,000 and the value of 5,000 Restricted Shares with respect to each other eligible director under the Directors Annual Equity Award Plan. There is no separate reserve of shares for purposes of the Directors Annual Equity Award Plan
and awards will be granted to the extent that there are sufficient Ordinary Shares reserved under any applicable equity remuneration plan of the Company. All equity-based remuneration awarded under the Directors Annual Equity Award Plan has been or
will be granted as part of, and out of Ordinary Shares available for grant under, the 2000 Plan (prior to its expiration), the 2010 Plan and/or the 2015 Plan. All equity awards under the Directors Annual Equity Award Plan vest in full on May 31
of the calendar year following the year in which they are granted and are otherwise generally subject to the terms of the applicable Company equity plan under which they are awarded.
Should a director not serve until the end of his or her term for any reason (including due to death or disability) or if a director ceases to
be an eligible director under the Directors Annual Equity Award Plan but remains a director, then any unvested Restricted Shares or RSUs held by such director at such time will expire and be cancelled and forfeited immediately. At the
Meeting, shareholders will be asked to approve accelerated vesting of Company equity awards granted to the Companys directors in connection with the 2018 Annual General Meeting, in the event that the Closing occurs prior to May 31, 2019.
See Item 5 below.
Options previously awarded and still outstanding under the Directors Annual Equity Award Plan expire no later than
seven years after the date on which they were granted, subject to earlier expiration if, at any annual general meeting of shareholders prior to the expiration of such seven-year period, a directors term expires and he or she is not
re-elected.
In such case, options expire upon the last to occur of: (i) 90 days following such annual general meeting of shareholders; (ii) three years from date of grant; and (iii) the expiration of such
period as is prescribed in the 2000 Plan in circumstances of retirement after the age of 60. Should an eligible director not serve until the end of his or her term for any other reason, apart from death or disability, in which case the provisions of
the applicable Company equity remuneration plan will apply with respect to vesting and expiration of options, any unvested or unexercised options will expire and be cancelled and forfeited immediately. In the event a director ceases to be an
eligible director but remains a director: (i) unvested options will expire and be cancelled and forfeited at such time; and (ii) vested options will continue to be exercisable and will expire as described above.
The Company has previously approved, and
re-approved
with the approval of the initial Compensation
Policy and, consistent therewith, the Compensation Policy provides, that external directors remuneration will be relative to that of other directors, as such term is defined in the Compensation Regulations, so that, in the event
that, during their term as external directors, the Company increases the remuneration payable, whether the annual payment or the per meeting fee, to any other directors, or grants additional equity-based compensation to other
directors, each external director will receive, without further approval, additional remuneration, so that his or her annual compensation and/or compensation for participation in meetings, as the case may be, will be equivalent to the average
compensation payable to such other directors as annual payment or as per meeting compensation, respectively, or be granted additional equity-based compensation as is equal to the average additional equity-based compensation being granted
to such other directors and on substantially similar terms, as applicable. In addition, pursuant to the Compensation Regulations, the Company may also change the amount or form of
18
remuneration payable to its then-serving external directors at the time of appointment of an additional external director, provided however that such change is to the benefit of the then-serving
external directors.
The nominees for directors, including the nominees for external directors, will, if elected, receive remuneration as
described above (including with respect to the nominee for external director, remuneration that is relative to that of other directors) and will, if elected, also participate in the Directors Annual Equity Award Plan and receive
equity-based compensation as eligible directors thereunder, as described above.
(d) Equity Awards to Directors
The following table sets forth information, as of May 14, 2018, concerning all outstanding option awards held (if held) by persons who
currently serve as directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date of
award
|
|
|
Exercise price
per share ($)
|
|
|
Shares subject
to option
|
|
|
Shares vested
and unexercised
|
|
|
Shares
unvested
|
|
|
Scheduled date
of expiration
|
|
Michael Anghel
|
|
|
Jun-26-2011
|
|
|
|
12.48
|
|
|
|
3,667
|
|
|
|
3,667
|
|
|
|
0
|
|
|
|
Jun-25-2018
|
|
|
|
|
Jun-24-2012
|
|
|
|
9.40
|
|
|
|
3,911
|
|
|
|
3,911
|
|
|
|
0
|
|
|
|
Jun-23-2019
|
|
|
|
|
Sep-11-2013
|
|
|
|
12.11
|
|
|
|
3,952
|
|
|
|
3,952
|
|
|
|
0
|
|
|
|
Sep-10-2020
|
|
|
|
|
Jul-10-2014
|
|
|
|
15.61
|
|
|
|
3,217
|
|
|
|
3,217
|
|
|
|
0
|
|
|
|
Jul-9-2021
|
|
|
|
|
|
|
|
|
Yehudit Bronicki
|
|
|
Jun-26-2011
|
|
|
|
12.48
|
|
|
|
3,667
|
|
|
|
3,667
|
|
|
|
0
|
|
|
|
Jun-25-2018
|
|
|
|
|
Jun-24-2012
|
|
|
|
9.40
|
|
|
|
3,911
|
|
|
|
3,911
|
|
|
|
0
|
|
|
|
Jun-23-2019
|
|
|
|
|
Sep-11-2013
|
|
|
|
12.11
|
|
|
|
3,952
|
|
|
|
3,952
|
|
|
|
0
|
|
|
|
Sep-10-2020
|
|
|
|
|
Jul-10-2014
|
|
|
|
15.61
|
|
|
|
3,217
|
|
|
|
3,217
|
|
|
|
0
|
|
|
|
Jul-9-2021
|
|
|
|
|
|
|
|
|
Jacob Richter
|
|
|
Jun-24-2012
|
|
|
|
9.40
|
|
|
|
3,911
|
|
|
|
3,911
|
|
|
|
0
|
|
|
|
Jun-23-2019
|
|
|
|
|
Sep-11-2013
|
|
|
|
12.11
|
|
|
|
3,952
|
|
|
|
3,952
|
|
|
|
0
|
|
|
|
Sep-10-2020
|
|
|
|
|
Jul-10-2014
|
|
|
|
15.61
|
|
|
|
3,217
|
|
|
|
3,217
|
|
|
|
0
|
|
|
|
Jul-9-2021
|
|
|
|
|
|
|
|
|
Joseph Tenne
|
|
|
Jul-10-2014
|
|
|
|
15.61
|
|
|
|
3,217
|
|
|
|
3,217
|
|
|
|
0
|
|
|
|
Jul-9-2021
|
|
|
|
|
|
|
|
|
Eliezer Tokman
|
|
|
Jun-24-2012
|
|
|
|
9.40
|
|
|
|
3,911
|
|
|
|
3,911
|
|
|
|
0
|
|
|
|
Jun-23-2019
|
|
|
|
|
Sep-11-2013
|
|
|
|
12.11
|
|
|
|
3,952
|
|
|
|
3,952
|
|
|
|
0
|
|
|
|
Sep-10-2020
|
|
|
|
|
Jul-10-2014
|
|
|
|
15.61
|
|
|
|
3,217
|
|
|
|
3,217
|
|
|
|
0
|
|
|
|
Jul-9-2021
|
|
|
|
|
|
|
|
|
Shimon Ullman
|
|
|
Jun-26-2011
|
|
|
|
12.48
|
|
|
|
3,667
|
|
|
|
3,667
|
|
|
|
0
|
|
|
|
Jun-25-2018
|
|
|
|
|
Jun-24-2012
|
|
|
|
9.40
|
|
|
|
3,911
|
|
|
|
3,911
|
|
|
|
0
|
|
|
|
Jun-23-2019
|
|
|
|
|
Sep-11-2013
|
|
|
|
12.11
|
|
|
|
3,952
|
|
|
|
3,952
|
|
|
|
0
|
|
|
|
Sep-10-2020
|
|
|
|
|
Jul-10-2014
|
|
|
|
15.61
|
|
|
|
3,217
|
|
|
|
3,217
|
|
|
|
0
|
|
|
|
Jul-9-2021
|
|
|
|
|
|
|
|
|
Arie Weisberg
|
|
|
Jul-10-2014
|
|
|
|
15.61
|
|
|
|
1,608
|
|
|
|
1,608
|
|
|
|
0
|
|
|
|
Jul-9-2021
|
|
All of the above option awards are subject to the terms of the 2000 Plan and were made as part of the
Directors Annual Equity Award Plan. For information concerning the method of calculation of the number of Ordinary Shares subject to RSUs or Restricted Shares awarded to directors under the Directors Annual Equity Award Plan, see
Other
Directors Remuneration. On May 14, 2018, the closing price of the Ordinary Shares as reported by Nasdaq was $62.33.
During
2017, 2,281 RSUs were awarded to the Active Chairman of the Board and 1,825 RSUs were awarded to each other director who was in office immediately after the 2017 annual general meeting of shareholders, including the external directors.
In addition, during 2017: (i) no options to purchase Ordinary Shares held by directors were cancelled; (ii) options to purchase a total
of 18,045 Ordinary Shares held by directors were exercised; and (iii) a total of 24,582 RSUs held by directors (all of which were awarded during 2016) vested. During the period from
19
January 1, 2018 to May 14, 2018: (i) no options to purchase Ordinary Shares were exercised by directors; (ii) no options to purchase Ordinary Shares held by any directors were
cancelled; and (iii) no RSUs held by directors vested. A total of 20,531 RSUs held by directors (all of which were awarded during 2017) are scheduled to vest in full on May 31, 2018.
Pursuant to the Tax Ordinance (and, with respect to RSUs, to a tax ruling the Company has received from the Israel Tax Authority) and to an
election made by the Company thereunder and consistent with the Compensation Policy, gains derived by employees (which term includes directors) in Israel arising from the sale of Restricted Shares, shares delivered in settlement of RSUs or acquired
pursuant to the exercise of options granted to them through a trustee under Section 102 of the Tax Ordinance after January 1, 2003, will generally be subject to a flat capital gains tax rate of 25%, although these gains may also include a
salary income component which would be subject to income tax at the grantees marginal tax rate. As a result of this election under Section 102, the Company will not, in the case of equity awards made on or after January 1, 2003, be
allowed to claim as an expense for tax purposes in Israel the amounts credited to the employee as capital gains, although it will generally be entitled to do so in respect of the income component of such awards (if any) which is subject to income
tax at the grantees marginal tax rate, when the related tax is paid by the employee. Pursuant to shareholder approval, and consistent with the Compensation Policy, each of the equity awards granted to directors specified in the table above, as
well as any other equity awards which may in the future be awarded by the Company to directors of the Company through a trustee under the 2000, 2010 or 2015 Plans (whether as part of the Directors Annual Equity Award Plan or otherwise), will benefit
from the above-described capital gains tax treatment (other than equity awards to Mr. Yochai Richter and Dr. Jacob Richter granted during years in which their combined holdings exceed a certain percentage, as determined pursuant to
relevant Israeli tax laws).
The salary income component of an equity award consists of the excess, if any, of the average price of the
Ordinary Shares during the
30-day
period immediately prior to the grant date over the exercise price of options awarded or the purchase price of Restricted Shares or RSUs granted (as the case may be). Because
options under the Companys equity plans are generally awarded at the market price of the Ordinary Shares on the grant date, the salary income component of options has historically been relatively small. By contrast, because RSUs and Restricted
Shares have been issued at substantially below the market price of the Ordinary Shares and for nominal consideration only, the salary income component of Restricted Shares or RSUs, and the corresponding expense which the Company will be allowed to
claim for tax purposes in Israel, is and will be significantly higher than in the case of options.
(e) Insurance, Indemnification
and Release
The Remuneration Committee, the Board and the shareholders of the Company have resolved, consistent with the
Compensation Policy: (i) to ratify and approve the purchase and the periodic renewal of insurance coverage in respect of the liability of its Office Holders currently in office and any additional or other Office Holders as may be appointed from
time to time in the future, including external directors, which will include coverage with respect to any public offering of shares or other securities of the Company, to the maximum extent permitted by law, providing for up to $75.0 million in
coverage; (ii) to undertake in advance to indemnify all directors and the chief executive officer of the Company currently in office, and any additional or other directors and chief executive officer(s) as may be appointed from time to time in
the future, including external directors, for certain matters, costs and expenses as set forth in a letter of indemnification and exemption and release approved for issuance to them; and (iii) to exempt and release to the maximum extent
permitted by law all directors and the chief executive officer of the Company currently in office, and any additional or other directors and chief executive officer(s) as may be appointed from time to time in the future, including external
directors, from and against all liability for monetary or other damages due to, or arising or resulting from, a breach of their duty of care to the Company, including, with respect to directors, in their capacity as officers of the Company to the
extent they also serve as officers of the Company, and to provide them with letters in this regard. With respect to the purchase of insurance as described in clause (i), the Remuneration Committee and the Board only may approve a greater amount of
coverage; provided, however, that any such greater amount of coverage shall
20
not exceed 15% of the Companys market capitalization, calculated based on the closing price of the Ordinary Shares, as quoted on Nasdaq at the close of business on December 31 of the
calendar year preceding the date of such approval. Pursuant to this provision, at their respective meetings held in February 2018, the Remuneration Committee and the Board approved an increase in such insurance coverage to $150.0 million.
Consistent with the Compensation Policy, the Remuneration Committee and the Board resolved to similarly undertake in advance to indemnify
certain other Office Holders of the Company (in addition to the directors and the chief executive officer of the Company) including all those currently in office, and to similarly exempt and release to the maximum extent permitted by law all such
other Office Holders of the Company, from and against all liability for monetary or other damages due to, or arising or resulting from, a breach of their duty of care to the Company and to provide them with letters in this regard.
Subject to the foregoing, any current directors who are
re-elected,
including external directors,
would benefit from the insurance, indemnification, release and exemption discussed herein.
(f) Other Director Disclosure
The Company is not aware of any agreements or arrangements between any director or nominee for election as a director and any
person or entity other than the Company relating to compensation or other payment in connection with such directors or nominees candidacy for director or for a directors service as a director of the Company.
Policy on Confidentiality and Trading in Company Securities
As a publicly traded entity, the Company maintains and enforces policies concerning confidentiality of information and the purchase and sale of
its securities by all directors, officers, employees and consultants of the Company and its subsidiaries and related companies.
21
Certain Information Concerning Equity Awards to Office Holders
The following table sets forth as a group, for all persons who were, at any time during 2017, Office Holders, certain information in respect of
the 2000, 2010 and 2015 Plans concerning: (i) equity awards granted by the Company between January 1, 2017 and December 31, 2017; (ii) options which were exercised and paid, and Restricted Shares and RSUs which vested, between such
dates; (iii) equity awards which were cancelled between such dates; and (iv) equity awards which were outstanding on, and as at, December 31, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
2000
|
|
|
2010
|
|
|
2015
|
|
Equity Awards Granted:
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Ordinary Shares subject to options
|
|
|
|
|
|
|
|
|
|
|
8,024
|
|
Weighted average option exercise price per Ordinary Share
|
|
|
|
|
|
|
|
|
|
$
|
32.87
|
|
Year of expiration of options
|
|
|
|
|
|
|
|
|
|
|
2024
|
|
Number of Restricted Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of RSUs
|
|
|
|
|
|
|
|
|
|
|
131,791
|
|
Options Exercised/Paid; Restricted Shares and RSUs Vested:
|
|
|
|
|
|
|
|
|
Number of Ordinary Shares subject to options
|
|
|
48,482
|
|
|
|
|
|
|
|
|
|
Weighted average option exercise price per Ordinary Share
|
|
$
|
13.32
|
|
|
|
|
|
|
|
|
|
Restricted Shares vested
|
|
|
|
|
|
|
|
|
|
|
|
|
RSUs vested
|
|
|
|
|
|
|
39,732
|
|
|
|
43,617
|
|
Equity Awards Cancelled:
|
|
|
|
|
|
|
|
|
Number of Ordinary Shares subject to options
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average option exercise price per Ordinary Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Restricted Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of RSUs
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Awards Outstanding:
|
|
|
|
|
|
|
|
|
Number of Ordinary Shares subject to options
|
|
|
88,027
|
|
|
|
|
|
|
|
18,417
|
|
Weighted average option exercise price per Ordinary Share
|
|
$
|
13.06
|
|
|
|
|
|
|
$
|
29.81
|
|
Weighted average remaining option life (years)
|
|
|
2.57
|
|
|
|
|
|
|
|
6.04
|
|
Number of Restricted Shares
|
|
|
94,977
|
|
|
|
|
|
|
|
|
|
Number of RSUs
|
|
|
|
|
|
|
32,081
|
|
|
|
236,152
|
|
It is proposed that at the 2018 Annual General Meeting the following resolutions be adopted:
RESOLVED that:
1.
|
(a)
|
Yochai Richter, be, and he hereby is,
re-elected
as a director for a term of approximately one year
expiring at the end of the annual general meeting of shareholders to be held in 2019 and when his successor has been duly elected;
|
|
(b)
|
Yehudit Bronicki, be, and she hereby is,
re-elected
as a director for a term of approximately one year expiring at the end of the annual general meeting of shareholders to be held
in 2019 and when her successor has been duly elected;
|
|
(c)
|
Dan Falk, be, and he hereby is,
re-elected
as a director for a term of approximately one year expiring at the end of the annual general meeting of shareholders to be held in 2019
and when his successor has been duly elected;
|
|
(d)
|
Miron Kenneth, be, and he hereby is,
re-elected
as a director for a term of approximately one year expiring at the end of the annual general meeting of shareholders to be held in
2019 and when his successor has been duly elected;
|
|
(e)
|
Jacob Richter, be, and he hereby is,
re-elected
as a director for a term of approximately one year expiring at the end of the annual general meeting of shareholders to be held in
2019 and when his successor has been duly elected;
|
22
|
(f)
|
Eliezer Tokman, be, and he hereby is,
re-elected
as a director for a term of approximately one year expiring at the end of the annual general meeting of shareholders to be held in
2019 and when his successor has been duly elected;
|
|
(g)
|
Shimon Ullman, be, and he hereby is,
re-elected
as a director for a term of approximately one year expiring at the end of the annual general meeting of shareholders to be held in
2019 and when his successor has been duly elected; and
|
|
(h)
|
Arie Weisberg, be, and he hereby is,
re-elected
as a director for a term of approximately one year expiring at the end of the annual general meeting of shareholders to be held in
2019 and when his successor has been duly elected.
|
|
2.
|
Avner Hermoni be, and he hereby is,
re-elected
as an external director as defined in the Israeli Companies Law, 1999, as amended, as of August 3, 2018 for a term of three
years, and that his remuneration and benefits as presented in the Companys Proxy Statement for its 2018 Annual General Meeting be ratified and approved.
|
Each of the nine resolutions above will be voted upon separately at the Meeting.
The Board recommends a vote
FOR
approval of the proposed resolutions.
ITEM 3
Re-appointment
of Auditors
At the 2018 Annual General Meeting, Kesselman & Kesselman, independent registered public accountants in Israel and a member firm of
PwC, will be nominated for
re-appointment
as auditors of the Company for the fiscal year ending December 31, 2018, and until the next annual general meeting of shareholders.
Pursuant to the provisions of the Sarbanes-Oxley Act, Israeli law and the Articles, the appointment of external auditors requires the approval
of the shareholders of the Company, and their compensation requires the approval of the Board, following approval and recommendation by the Audit Committee. The Board has delegated its authority to approve the compensation of external auditors for
non-audit
services to the Audit Committee or to a delegate thereof. The Audit Committee has reviewed, and is satisfied with, the performance of Kesselman & Kesselman, and has approved and is recommending to
shareholders to approve, their
re-appointment
as external auditors.
Kesselman &
Kesselman has no relationship with the Company or any affiliate of the Company except as auditors and, to a limited extent, as tax consultants. The Audit Committee believes that this limited
non-audit
function
does not affect the independence of Kesselman & Kesselman. A representative of Kesselman & Kesselman will be present at the Meeting, will have an opportunity to make a statement if he or she desires to do so and will be available
to respond to appropriate questions from shareholders.
The Audit Committee maintains a policy of approving and recommending only those
services to be performed by the Companys external auditors which are permitted under the Sarbanes-Oxley Act and the applicable rules of the SEC relating to auditors independence, and which are otherwise consistent with and will
encourage, and are remunerated at levels that accord with, the basic principles of auditor independence. The general practice of the Audit Committee is to receive from the Companys management, either at the time of the Audit Committees
final review of managements annual report on internal control over financial reporting or at the time of approval of the Companys annual financial statements for the preceding fiscal year, a list of all services, including audit,
audit-related, tax and other services, proposed to be provided during the current fiscal year to the Company by Kesselman & Kesselman and/or other member firms of PwC, as well as a report regarding the extent of such services actually
provided by Kesselman & Kesselman and PwC during the previous fiscal year and the fees paid for such services performed. After reviewing and considering the services proposed to be provided during the current fiscal year and, where
appropriate in order better to understand their nature, discussing them with management, the Audit Committee
pre-approves
such of the proposed services, with a
23
specific
pre-approved
budget, as it considers appropriate in accordance with the above principles. Management also maintains a practice of discussing these
matters on an ongoing basis during the year with Mr. Dan Falk, a member of the Audit Committee and its appointed delegate in respect of audit-related and
non-audit-related
services. Additional services
from Kesselman & Kesselman and PwC and any increase in budgeted amounts will similarly be submitted for
pre-approval
during the year by the Audit Committee on a
case-by-case
basis.
All audit-related and
non-audit-related
services performed by Kesselman & Kesselman and/or other member firms of PwC during 2017 and 2016 were
pre-approved
by the Audit Committee in
accordance with the procedures outlined above.
The following table provides information regarding fees paid by the Company to
Kesselman & Kesselman and/or other member firms of PwC for all services, including audit services, for the years ended December 31, 2017 and 2016:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2017
|
|
|
2016
|
|
Audit fees (1)
|
|
$
|
1,236,000
|
|
|
$
|
1,080,000
|
|
Audit related fees (2)
|
|
|
128,000
|
|
|
|
346,000
|
|
Tax fees (3)
|
|
|
526,000
|
|
|
|
611,000
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,007,000
|
|
|
$
|
2,037,000
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes professional services rendered with respect to the audits of the Companys annual consolidated financial statements, the audits of managements assessment of internal control over financial reporting,
review of consolidated quarterly financial statements, statutory audits of the Company, consents and assistance with review of documents filed with the SEC.
|
(2)
|
Includes consultations concerning regulatory matters and special projects and, in 2016, mainly includes fees and consultations in connection with a public offering, completed by the Company in June 2016, of 3,850,000
Ordinary Shares at a public offering price of $26.25 per Ordinary Share and the associated debt refinancing.
|
(3)
|
Includes fees for services related to tax compliance, including assistance in preparation of tax returns, claims for refund and assistance with audits and appeals; and tax planning and advice, including advice related
to acquisitions and dispositions, issues with respect to transfer pricing and other.
|
It is proposed that at
the 2018 Annual General Meeting the following resolution be adopted:
RESOLVED, that the Companys auditors,
Kesselman & Kesselman, independent registered public accountants in Israel and a member firm of PricewaterhouseCoopers International Limited, be, and they hereby are,
re-appointed
as auditors of the
Company for the fiscal year ending December 31, 2018, and until the Companys next annual general meeting of shareholders.
The Audit Committee recommends a vote
FOR
approval of the proposed resolution.
ITEM 4
Approval of Certain Potential Cash and Equity-Based Retention Incentives to the Chief Executive Officer of the Company and to the
President and Chief Operating Officer of the Company
As mentioned above, pursuant and subject to the terms and conditions
set forth in the Merger Agreement, the Company is obligated to carry on its business in all material respects in the ordinary course, in substantially the same manner as conducted prior to entering into the Merger Agreement, and, among other things,
to use commercially reasonable efforts, consistent with past practices and policies, to retain the services of its directors, officers and employees.
24
Retention Proposal
The Company believes that
KLA-Tencors
success following the Proposed Merger will depend upon the
ability of
KLA-Tencor
to retain senior management and key employees of Orbotech following the Proposed Merger. Similarly, should the Merger Agreement be terminated for any reason prior to Closing, and the
Proposed Merger is not consummated, the Companys future success will depend upon its ability to retain its senior management and key employees.
However, the Companys senior management and key employees may experience uncertainty about their roles or the anticipated integration
process with
KLA-Tencor
in connection with and following the Proposed Merger. In addition, key employees may depart because of issues relating to the uncertainty and difficulty of integration related to the
Proposed Merger. The loss of services of certain senior management or key employees of the Company could restrict its ability following any termination of the Merger Agreement to develop new products or enhance existing products in a timely manner,
to sell products to customers or to manage its business effectively. Also, the Companys business, financial condition and results of operations could be materially adversely affected by the loss of any of its key employees. The Company is
using its reasonable best efforts to complete the Proposed Merger and has received a number of the necessary approvals, but to consummate the Proposed Merger, there are certain additional required regulatory approvals that, if granted, will likely
only occur after the shareholder vote. However, upon shareholder approval of the Proposed Merger, members of the Companys senior management could resign from the Company and receive substantial benefits in accordance with their employment
arrangements even if there are remaining conditions to the Proposed Merger to be satisfied.
To deal with these risks,
KLA-Tencor
has agreed to provide certain retention incentives to the Companys senior management, to be implemented only upon, or conditional upon, the Closing, and, with respect to the Companys Chief
Executive Officer, Mr. Asher Levy (the
CEO
) and its President and Chief Operating Officer, Mr. Amichai Steimberg (the
COO
), only following Closing. The proposed
KLA-Tencor
retention plans with respect to the CEO and the COO are not subject to approval by the Company or its shareholders, but will be described in the materials to be sent to the shareholders in
connection with the 2018 Extraordinary General Meeting mentioned above. Accordingly, in addition to the retention incentives that
KLA-Tencor
has committed to provide to the CEO and COO following the Closing,
and in order to provide appropriate incentives to the CEO and COO to remain with the Company until either Closing occurs or (in the unlikely event) the Merger Agreement is terminated in accordance with its terms prior to the Closing, the
Remuneration Committee and the Board have approved, and are now seeking shareholder approval for and are recommending to the shareholders to approve, the grant by the Company, at such time as the Board may determine, of special cash-based and
equity-based retention awards to each of the CEO and the COO, as follows: (A) a special cash bonus, if granted, of $2.0 million to the CEO and of $1.5 million to the COO, 50% of which would be payable immediately following a
termination of the Merger Agreement and the remaining 50% six months thereafter; and (B) at the discretion of the Board immediately following a termination of the Merger Agreement, RSUs with a grant date value of $5.0 million to the CEO
and with a grant date value of $3.5 million to the COO, which would vest over a four year period as follows: (i) 50% on the second anniversary of the grant date, (ii) an additional 25% on the third anniversary of the grant date, and
(iii) the remaining 25% on the fourth anniversary of the grant date, subject in each case to continued employment through such dates. Such RSUs would additionally be subject to certain defined performance-based vesting criteria with respect to
25% of such awards, in accordance with the Companys past practice and its Compensation Policy. All such equity-based retention awards would be subject to the accelerated vesting provisions pursuant to each of the CEOs and COOs
current employment arrangement.
These special retention awards would be made only if the Merger Agreement is terminated prior to the
Closing, and no such cash-based or equity-based retention awards will become payable in the event the Closing occurs.
The retention
incentives that
KLA-Tencor
has agreed to provide to the CEO and COO following the Closing will be applicable only if the Closing actually occurs. Accordingly, the retention incentives for which Orbotech is
25
seeking shareholder approval are necessary to provide incentives to the CEO and COO to forego their respective benefits in the event the shareholders approve the Merger but one or more of the
other conditions is not likely to be satisfied. For more information about the risks related to the Merger, please refer to Orbotechs filings with the Securities and Exchange Commission.
Current compensation arrangements of the CEO
Under existing arrangements between the Company and the CEO, the CEO currently receives a monthly base salary of NIS 162,000, equal to an
annual base salary of NIS 1,944,000 (approximately $45,151 and $541,806, respectively, based on the Current Exchange Rate), plus benefits, an annual cash bonus equal to 1.25% of the Companys net profit for such year and annual grant of
equity-based compensation with a grant-date value equal to the lesser of $500,000 or the value of 42,000 Restricted Shares. Any change to these arrangements is subject to the approval process and other conditions set forth in the Companies Law. With
respect to 2017, the cost to the Company of the CEOs salary and benefits was $776,602 and his cash bonus was $1,650,000. In addition, as of May 14, 2018, the CEO: (i) held options to purchase a total of 20,083 Ordinary Shares,
expiring on various dates between November 5, 2021 and June 28, 2024 and having a weighted average exercise price of $28.63 per share (none of which had vested and 6,863 of which with a weighted average exercise price of $24.57 per share
will vest prior to December 31, 2018); (ii) held 65,950 outstanding (unvested) RSUs (27,837 of which will vest prior to December 31, 2018); and (iii) did not hold any other Company equity-based awards.
Each of the Company and the CEO may terminate the employment of the CEO by providing six months advance notice, other than in connection
with a termination for cause (as such term is defined in the CEOs employment agreement). In addition, upon termination of employment, the CEO will generally be entitled to a severance payment in an amount equal to the product of
150% of the CEOs monthly salary (or 200% if terminated by the Company), multiplied by the number of years of employment less any amounts contributed by the Company and accumulated in his pension or insurance funds on account of severance pay,
and, if terminated by the Company, to an adaptation payment of six monthly salaries. In addition, upon the CEOs resignation within 12 months following the occurrence of a significant event (as such term is defined in the CEOs
employment agreement, which includes shareholder approval of the Proposed Merger), the CEO would be entitled to the adaptation payment as described above and to a severance payment equal to 200% of his salary as described above. Furthermore, in the
event of his death, or termination of his employment, whether by the Company or voluntarily in certain specified circumstances, within 12 months following the occurrence of a significant event or if he is still employed by the Company 24
months following a significant event, his outstanding and unvested equity awards will generally be accelerated and become fully vested.
Current compensation arrangements of the COO
Under existing arrangements between the Company and the COO, the COO currently receives a monthly base salary of NIS 145,800, equal to an
annual base salary of NIS 1,749,600 (approximately $40,635 and $487,625, respectively, based on the Current Exchange Rate), plus benefits, an annual cash bonus equal to 0.92% of the Companys net profit for such year and an annual grant of
equity-based compensation with a grant-date value equal to the lesser of $300,000 or the value of 25,200 Restricted Shares. With respect to 2017, the cost to the Company of the COOs salary and benefits was $687,611 and his cash bonus was
$1,224,300. In addition, as of May 14, 2018, the COO: (i) held an option to purchase a total of 2,221 Ordinary Shares, expiring on November 5, 2021 and having an exercise price of $15.57 per share (which will vest in full prior to
December 31, 2018); (ii) held 29,841 outstanding (unvested) RSUs (of which 11,342 will vest prior to December 31, 2018); and (iii) did not hold any other Company equity-based awards.
Each of the Company and the COO may terminate the employment of the COO by providing six months advance notice, other than in connection
with a termination for cause (as such term is defined in the COOs employment agreement). In addition, upon termination of employment, the COO will generally be entitled to a severance payment in an amount equal to the product of
150% of the COOs monthly salary (or 200% if
26
terminated by the Company), multiplied by the number of years of employment less any amounts contributed by the Company and accumulated in his pension or insurance funds on account of severance
pay, and, if terminated by the Company, to an adaptation payment of six monthly salaries. In addition, upon the COOs resignation within 12 months following the occurrence of a significant event (as such term is defined in the
COOs employment agreement, which includes shareholder approval of the Proposed Merger), the COO would be entitled to the adaptation payment as described above and to a severance payment equal to 200% of his salary as described above.
Furthermore, in the event of his death, or termination of his employment, whether by the Company or voluntarily in certain specified circumstances, within 12 months following the occurrence of a significant event or if he is still
employed by the Company 24 months following a significant event, his outstanding and unvested equity awards will generally be accelerated and become fully vested.
Required Approvals
Pursuant to the Companies Law, arrangements between the Company and its Office Holders, including the CEO and the COO, as to their Terms of
Office and Employment must generally be approved by the Remuneration Committee and the Board and be consistent with the Compensation Policy. The Terms of Office and Employment of the CEO are further subject to shareholder approval, by the
Compensation Majority.
Under certain circumstances, arrangements between the Company and its Office Holders that are not consistent with
the Compensation Policy may be approved, if such arrangements are approved by the shareholders by the Compensation Majority.
In addition,
under certain circumstances, to the extent the Terms of Office and Employment of Office Holders who are not directors are not approved by the shareholders, where such approval is required, the Remuneration Committee and the Board may nonetheless
approve such terms following a new discussion of the matter and for specified reasons and after considering the shareholders objection.
The Remuneration Committee and the Board have determined, when approving the proposed special retention awards, that, in light of their value,
they are inconsistent with the Compensation Policy. However, due to the special retention needs described above, they have approved these potential awards, and are recommending that the shareholders approve these potential awards and authorize the
Board to grant them at such time as the Board may determine.
Accordingly, it is proposed that at the 2018 Annual General Meeting the
following resolutions be adopted:
RESOLVED:
|
4(a)
|
To approve the grant of, and to authorize the board of directors of the Company to grant, certain potential special cash-based and equity-based retention awards to the Chief Executive Officer of the Company,
Mr. Asher Levy, as presented in the Companys Proxy Statement for its 2018 Annual General Meeting; and
|
|
4(b)
|
To approve the grant of, and to authorize the board of directors of the Company to grant, certain potential special cash-based and equity-based retention awards to the President and Chief Operating Officer of the
Company, Mr. Amichai Steimberg, as presented in the Companys Proxy Statement for its 2018 Annual General Meeting.
|
Each of the two resolutions above will be voted upon separately at the Meeting.
The Board recommends a vote
FOR
approval of the proposed resolutions.
ITEM 5
Approval of Accelerated Vesting of Orbotech Equity Awards Granted to the Companys Directors in connection with the 2018 Annual
General Meeting
As discussed above, the Company is subject to the provisions of the Companies Law, under which arrangements
between the Company and its directors as to their Terms of Office and Employment must generally be consistent with the Compensation Policy and generally require the approval of the Remuneration Committee, the Board and the shareholders.
27
As further discussed above, under the terms of the Directors Annual Equity Award Plan,
(i) each director who is in office immediately after any annual general meeting of shareholders, including external directors and including directors who are employees of the Company, other than the Chief Executive Officer (even if a director),
are entitled to receive, in addition to annual and per meeting fees, equity awards, comprised of Restricted Shares or RSUs, with an aggregate grant-date value equal to the lesser of $75,000 and the value of 6,250 Restricted Shares with respect to
the Chairman of the Board, and with an aggregate grant-date value equal to the lesser of $60,000 and the value of 5,000 Restricted Shares with respect to each other eligible director under the Directors Annual Equity Award Plan; (ii) all equity
awards under the Directors Annual Equity Award Plan vest in full on May 31 of the calendar year following the year in which they are granted; and (iii) should a director not serve until the end of his or her term for any reason (including
due to death or disability) or if a director ceases to be an eligible director under the Directors Annual Equity Award Plan but remains a director, then any unvested Restricted Shares or RSUs held by such director at such time will
expire and be cancelled and forfeited immediately.
The Company and
KLA-Tencor
currently expect
that the Closing will take place during the fourth quarter of calendar year 2018. Pursuant to the Merger Agreement, upon the Closing, the current directors of the Company will no longer serve as the directors of the surviving company in the Proposed
Merger. Accordingly, the equity-based awards granted to the Companys directors in connection with the 2018 Annual General Meeting will expire and be cancelled and forfeited in the event the Closing occurs prior to May 31, 2019, unless the
vesting of such awards is accelerated. Pursuant to the Merger Agreement and consistent with the Compensation Policy, the Company may provide for such accelerated vesting, and the Remuneration Committee and the Board have unanimously approved such
accelerated vesting, subject to the approval of the shareholders.
Accordingly, it is proposed that at the 2018 Annual General Meeting the
following resolution be adopted:
RESOLVED that the acceleration of vesting as of immediately prior to the Closing of the Proposed
Merger of any outstanding awards granted under the Companys equity based incentive plans to the Companys directors in accordance with the Directors Annual Equity Award Plan in connection with the 2018 Annual General Meeting be, and
hereby is, approved in all respects.
The Board recommends a vote
FOR
approval of the proposed resolution.
Consideration of the Report of the Independent Registered Public Accounting
Firm and the Consolidated Financial Statements
At the 2018 Annual General Meeting, the Report of the Independent Registered Public Accounting Firm and the Consolidated Financial Statements
of the Company for the fiscal year ended December 31, 2017, will be presented for discussion. The representative of Kesselman & Kesselman present at the Meeting will be available to respond to appropriate questions from shareholders
concerning the Report of the Independent Registered Public Accounting Firm and the Consolidated Financial Statements of the Company.
SHAREHOLDER PROPOSALS
According to regulations promulgated pursuant to the Companies Law governing the terms of notice and publication of shareholder meetings of
public companies, holder(s) of one percent or more of the Companys voting rights may propose any matter appropriate for deliberation at a shareholder meeting to be included on the agenda of a shareholder meeting, including nomination of
candidates for directors, generally by submitting a proposal within seven (7) days of publicizing the convening of a shareholder meeting, or, if the Company publishes a preliminary notice at least
twenty-one
(21) days prior to publicizing the convening of a meeting, stating its intention to convene such meeting and the agenda thereof, within fourteen (14) days of such preliminary notice. Any
such proposal must further comply with the information requirements under applicable law and the Articles.
28
The Annual Report of the Company for the fiscal year ended December 31, 2017, including its
consolidated financial statements, though not a part of the proxy solicitation material, has been filed by the Company with the SEC, is available on the Companys corporate website and will be provided, in hard copy free of charge, to those
shareholders so requesting it. Shareholders are invited to review this report.
By Order of the Board
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YOCHAI RICHTER
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ASHER LEVY
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Active Chairman of the Chief Executive Officer
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Board of Directors
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Dated: May 17, 2018
29
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GO GREEN
e-Consent
makes it easy to go paperless. With
e-Consent,
you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via
www.astfinancial.com to enjoy online access.
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☐
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ORBOTECH LTD.
THIS PROXY
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 21, 2018
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints MR. YOCHAI RICHTER and MR. MICHAEL HAVIN, and each of
them, the true and lawful attorneys, agents and proxies of the undersigned, with full power of substitution, to vote with respect to all Ordinary Shares of ORBOTECH LTD. (the
Company
), standing in the name of the undersigned at
the close of trading on May 14, 2018, at the 2018 Annual General Meeting of Shareholders of the Company (the
Meeting
) to be held at the Companys principal offices at 7 Sanhedrin Boulevard, North Industrial Zone, Yavne,
Israel, on Thursday, June 21, 2018, at 10:00 a.m., Israel time, and at any and all adjournments thereof, with all the power that the undersigned would possess if personally present and especially (but without limiting the general authorization and
power hereby given) to vote as specified on the reverse side:
(Continued and to be signed on the reverse side)
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1.1
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14475
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ANNUAL GENERAL MEETING OF SHAREHOLDERS OF
ORBOTECH LTD.
June 21, 2018
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL
:
Proxy statement and proxy card are available at
www.orbotech.com
Please complete,
sign, date and mail your
proxy card in the envelope provided
as soon as possible.
In order to be counted, a duly executed proxy must be received prior to the Meeting. This will be deemed to have occurred
only if such proxy is received either by the Company at its principal executive offices at any time prior to the commencement of the Meeting, or by the Companys transfer agent in New York, New York, by no later than 11:59 p.m., New York time,
on June 20, 2018 (and, in each case, not revoked prior to such time). Shares represented by proxies received after the times specified above will not be counted as present at the Meeting and will not be voted.
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⬛
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PLEASE COMPLETE, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
☒
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1.
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RE-ELECTION
OF DIRECTORS:
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THE NOMINEES FOR
RE-ELECTION
AS DIRECTORS ARE:
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FOR
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AGAINST
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ABSTAIN
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(A)
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YOCHAI RICHTER
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☐
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☐
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☐
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(B)
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YEHUDIT BRONICKI
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☐
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☐
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☐
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(C)
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DAN FALK
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☐
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☐
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☐
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(D)
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MIRON KENNETH
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☐
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☐
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☐
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(E)
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JACOB RICHTER
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☐
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☐
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☐
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(F)
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ELIEZER TOKMAN
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☐
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☐
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☐
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(G)
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SHIMON ULLMAN
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☐
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☐
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☐
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(H)
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ARIE WEISBERG
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☐
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☐
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☐
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2.
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RE-ELECTION
OF EXTERNAL DIRECTOR (AND HIS REMUNERATION AND BENEFITS):
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THE NOMINEES FOR
RE-ELECTION
AS EXTERNAL DIRECTOR IS:
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FOR
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AGAINST
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ABSTAIN
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AVNER HERMONI (INCLUDING HIS REMUNERATION AND BENEFITS)
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☐
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☐
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☐
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Are you an Interested Party (as such term is defined in the Proxy Statement)
with respect to this
item 2
?
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YES
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NO
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☐
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☐
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If you have not marked NO on the proxy (or in your electronic submission),
thereby confirming that you are not an Interested Party with respect to item 2, your vote will not be counted for purposes of the External Director Majority (as such term is defined in the Proxy Statement), and your signature on the enclosed proxy
(or the submission of an electronic vote) will constitute a certification that you are an Interested Party with respect this item 2.
As further explained in the Proxy Statement, the Company is not aware of any controlling shareholder and therefore believes that none of its shareholders
should be an Interested Party with respect to this matter and, accordingly, would be expected to mark No in the appropriate place above.
See pages 4-5 of the Proxy Statement for more information.
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To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via this method.
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☐
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FOR
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AGAINST
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ABSTAIN
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3.
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RE-APPOINTMENT
OF KESSELMAN & KESSELMAN AS AUDITORS OF THE COMPANY:
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☐
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☐
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☐
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4.
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POTENTIAL CASH AND EQUITY-BASED RETENTION INCENTIVES TO:
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(a) THE CHIEF EXECUTIVE OFFICER OF THE COMPANY:
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☐
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☐
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☐
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YES
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NO
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Are you an Interested Party (as such term is defined in the Proxy Statement) with respect to this
item 4(a)
?
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☐
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☐
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If you have not marked NO on the proxy (or in your electronic submission), thereby confirming that you are not an Interested Party with respect
to item 4(a), your vote will not be counted for purposes of the Compensation Majority (as such term is defined in the Proxy Statement), and your signature on the enclosed proxy (or the submission of an electronic vote) will constitute a
certification that you are an Interested Party with respect this item 4(a).
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As further explained in the Proxy Statement, the Company is not aware of any controlling shareholder and a shareholder would be an Interested Party in this
item 4(a) only if such shareholder had a personal interest therein (as such term is defined in the Proxy Statement). The Company therefore believes that few, if any, of its shareholders would be an Interested Party with regard to Item
4(a) and that its shareholders would generally be expected to mark No in the appropriate place above.
See page 4 of the Proxy Statement for more information, including the definitions of these terms under the Israeli Companies Law.
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FOR
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AGAINST
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ABSTAIN
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(b) THE PRESIDENT AND CHIEF OPERATING OFFICER OF THE COMPANY:
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☐
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☐
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☐
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YES
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NO
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Are you an Interested Party (as such term is defined in the Proxy Statement) with respect to this
item 4(b)
?
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☐
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☐
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If you have not marked NO on the proxy (or in your electronic submission), thereby confirming that you are not an Interested Party with respect
to item 4(b), your vote will not be counted for purposes of the Compensation Majority (as such term is defined in the Proxy Statement), and your signature on the enclosed proxy (or the submission of an electronic vote) will constitute a
certification that you are an Interested Party with respect this item 4(b).
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As further explained in the Proxy Statement, the Company is not aware of any controlling shareholder and a shareholder would be an Interested Party in this
item 4(b) only if such shareholder had a personal interest therein (as such term is defined in the Proxy Statement). The Company therefore believes that few, if any, of its shareholders would be an Interested Party with regard to Item
4(b) and that its shareholders would generally be expected to mark No in the appropriate place above.
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See page 4 of the Proxy Statement for more information, including the definitions of these terms under the Israeli Companies Law.
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FOR
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AGAINST
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ABSTAIN
|
5.
|
|
ACCELERATED VESTING OF ORBOTECH EQUITY AWARDS GRANTED TO THE
COMPANYS DIRECTORS IN CONNECTION WITH THE 2018 ANNUAL GENERAL MEETING
|
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☐
|
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☐
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☐
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|
Discretionary authority is hereby granted with respect to
such other matters as may properly come before the Meeting or any adjournment thereof.
The shares represented by this proxy will be voted in the manner directed and, if no instructions to the contrary are indicated, will be voted FOR
Items 1 5 listed herein. Any other matters that may properly come before the Meeting, if any, will be voted by the persons designated as proxies in their judgment.
Any and all proxies heretofore given are hereby revoked.
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Signature of Shareholder
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Date:
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Signature of Shareholder
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Date:
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⬛
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Note:
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Please sign exactly as your name or names appear on this proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the
signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
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⬛
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ORBOTECH LTD.
(Registrant)
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By:
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/s/ Alon Rozner
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Alon Rozner
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Corporate Vice President and
Chief Financial Officer
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Date: May 18, 2018
Orbotech Ltd. - Ordinary Shares (NASDAQ:ORBK)
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