99.1
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Proxy Statement for Annual General Meeting to be held August 14, 2019.
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99.2
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Form of Proxy Card |
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MAGAL SECURITY SYSTEMS LTD.
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(Registrant)
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By: /s/ Dror Sharon
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Dror Sharon
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Chief Executive Officer
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EXHIBIT NO.
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DESCRIPTION
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1. |
To re-elect four (4) directors for terms expiring at our 2020 Annual General Meeting of Shareholders.
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2. |
To elect one (1) external director for a three (3) year term;
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3. |
To re-adopt the Company's updated Compensation Policy;
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4. |
To re-approve the compensation of the Company's directors associated with the controlling shareholder including but not limited to: (1) terms of employment of the chairman of the board; and (2) the issuance and delivery of
indemnification letters; and
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5. |
To approve the issuance and delivery of indemnification letters to each of our directors and officers appointed from time to time; and
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6. |
To ratify and approve the reappointment of Kost Forer Gabbay & Kasierer, registered public accountants, a member firm of Ernst & Young Global, as our independent registered public accountants for the year ending December 31,
2019, and to authorize our audit committee to fix the remuneration of such independent registered public accountants in accordance with the volume and nature of their services.
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By Order of the Board of Directors
Doron Kerbel
V.P. General Counsel and Secretary
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1. |
To re-elect four (4) directors for terms expiring at our 2020 Annual General Meeting of Shareholders;
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2. |
To elect one (1) external director for a three (3) year term;
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3. |
To re-adopt the Company's updated Compensation Policy;
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4. |
To re-approve the compensation of the Company's directors associated with the controlling shareholder including but not limited to: (1) terms of employment of the chairman of the board; and (2) the issuance and delivery of
indemnification letters; and
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5. |
To approve the issuance and delivery of indemnification letters to each of our directors and officers appointed from time to time; and
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6. |
To ratify and approve the reappointment of Kost Forer Gabbay & Kasierer, registered public accountants, a member firm of Ernst & Young Global, as our independent registered public accountants for the year ending December 31,
2019, and to authorize our audit committee to fix the remuneration of such independent registered public accountants in accordance with the volume and nature of their services.
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• |
Voting in Person. If your shares are registered directly in your name with our transfer agent (i.e. you are a “registered shareholder”), you may attend and vote in person
at the Meeting. If you are a beneficial owner of shares registered in the name of your broker, bank, trustee or nominee (i.e. your shares are held in “street name”), you are also invited to attend the Meeting; however, to vote in
person at the Meeting as a beneficial owner, you must first obtain a “legal proxy” from your broker, bank, trustee or nominee authorizing you to do so at least forty-eight (48) hours prior to the appointed time of the Meeting.
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• |
Voting by Mail. You may submit your proxy by mail by completing, signing and mailing the enclosed proxy card in the enclosed, postage-paid envelope, or, for shares held in
street name, by following the voting instructions provided by your broker, bank trustee or nominee. The proxy must be received by our transfer agent or at our registered office in Israel at least forty-eight (48) hours prior to the
appointed time of the Meeting to be validly included in the tally of ordinary shares voted at the Meeting. If directions are not given or directions are not in accordance with the options listed on a proxy card, such shares will be
voted FOR the nominees for director and each proposal for which the Board of Directors recommends a vote FOR.
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reviewing our SEC filings under the heading “SEC Filings” within the “Investors’ Relations” section of our website at www.magalsecurity.com; or
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reviewing our SEC filings through the SEC’s EDGAR filing system at www.sec.gov.
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each person or entity known by us to own beneficially 5% or more of our outstanding shares; and
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all of our executive officers and directors as a group.
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Name
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Number of
Shares |
Percentage
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FIMI Opportunity Five (Delaware), Limited Partnership (1)
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4,646,924
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20.1
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%
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FIMI Israel Opportunity Five, Limited Partnership (1)
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5,207,235
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22.5
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%
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Grace & White, Inc. (2).
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1,409,399
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6.1
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%
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All directors and executive officers as group (16 persons) (3).
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114,063
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(
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*)
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(1) |
Based on Schedule 13D/A filed with the SEC on October 11, 2016 and other information available to us. The address of FIMI Opportunity Five (Delaware), Limited Partnership
and FIMI Israel Opportunity Five, Limited Partnership is c/o FIMI FIVE 2012 Ltd., Alon Building 2, 94 Yigal Alon St., Tel-Aviv 6789139, Israel. FIMI Opportunity IV, L.P., FIMI Israel Opportunity IV, Limited Partnership (the “FIMI IV
Funds”), FIMI Opportunity V, L.P., FIMI Israel Opportunity Five, Limited Partnership (the “FIMI V Funds” and together with the FIMI IV Funds, the “FIMI Funds”), FIMI IV 2007 Ltd., FIMI FIVE 2012 Ltd., Shira and Ishay Davidi Management
Ltd. and Mr. Ishay Davidi share voting and dispositive power with respect to the 9,855,159 shares held by the FIMI Funds. FIMI IV 2007 Ltd. is the managing general partner of the FIMI IV Funds. FIMI FIVE 2012 Ltd. is the managing
general partner of the FIMI V Funds. Shira and Ishay Davidi Management Ltd. controls FIMI IV 2007 Ltd. and FIMI FIVE 2012 Ltd. Mr. Ishay Davidi controls Shira and Ishay Davidi Management Ltd. and is the Chief Executive Officer of all
the entities listed above. The principal business address of each of the above entities and of Mr. Davidi is c/o FIMI IV 2007 Ltd., Alon Building 2, 94 Yigal Alon St., Tel-Aviv 6789139, Israel.
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(2) |
Based upon a Schedule 13G/A filed with the SEC on January 29, 2019 by Grace & White, Inc. The Schedule 13G/A indicates that Grace & White, Inc. is a registered
investment adviser. The address of Grace & White, Inc. is 515 Madison Avenue, Suite 1700, New York, NY 10022.
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(3) |
Consists of (i) 13,850 ordinary shares directly or beneficially owned by our directors and executive officers; and (ii) 100,213 ordinary shares issuable upon the exercise
of currently exercisable options or options that vest within 60 days of July 12, 2019.
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By Order of the Board of Directors
Doron Kerbel
V.P. General Counsel and Secretary
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WHEREAS, |
Indemnitee is an office holder (nose misra) (an “Office Holder”), as such term is defined in the Companies Law, 5759–1999 (the “Companies Law”);
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WHEREAS, |
both the Company and Indemnitee recognize the increased risk of litigation and other claims being asserted against Office Holders of companies and that highly competent persons have become more reluctant to serve corporations as
directors and officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against risks of claims and actions against them arising out of their service to, and
activities on behalf of, companies;
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WHEREAS, |
the Articles of Association of the Company authorize the Company to indemnify and advance expenses to its Office Holders and provide for insurance and exculpation to its Office Holders, in each case, to the fullest extent permitted
by applicable law;
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WHEREAS, |
the Company has determined that (i) the increased difficulty in attracting and retaining highly competent persons, such as Indemnitee, is detrimental to the best interests of the Company’s shareholders and that the Company should
act to assure such persons that there will be increased certainty of such protection in the future, and (ii) it is reasonable, prudent and necessary for the Company to obligate itself contractually to indemnify, and to advance
expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified; and
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WHEREAS, |
in recognition of Indemnitee's need for substantial protection against personal liability in order to assure Indemnitee’s continued service to the Company in an effective manner and, in part, in order to provide Indemnitee with
specific contractual assurance that the indemnification, insurance and exculpation afforded by the Articles of Association will be available to Indemnitee, the Company wishes to undertake in this Agreement for the indemnification of
and the advancing of expenses to Indemnitee to the fullest extent permitted by applicable law and as set forth in this Agreement, and provide for insurance and exculpation of Indemnitee as set forth in this Agreement; and
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WHEREAS, |
the Indemnitee may have other rights of indemnification and/or insurance provided by third parties which the Indemnitee intends to be secondary to the primary obligation of the Company to
indemnify the Indemnitee and to the insurance policy of the Company as provided herein, with the Company’s acknowledgement and agreement to the foregoing being a material condition to Indemnitees' willingness to serve as an Office
Holder of the Company.
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1. |
INDEMNIFICATION AND INSURANCE.
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1.1. |
The Company agrees to indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law for any liability and expense specified in Sections 1.1.1 through 1.1.5 below, imposed on Indemnitee due to or in
connection with an act performed by Indemnitee, either prior to or after the date hereof, in Indemnitee’s capacity as an Office Holder of the Company, any subsidiary thereof or any other corporation, collaboration, partnership, joint
venture, trust or other enterprise, in which Indemnitee serves at any time at the request of the Company (the “Corporate Capacity”). The term “act performed in Indemnitee’s capacity as an Office
Holder” shall include, without limitation, any act or omission and any other circumstances relating to or arising from Indemnitee’s service in a Corporate Capacity. Notwithstanding the foregoing, in the event that the Office Holder is
the beneficiary of an indemnification undertaking provided by a subsidiary of the Company or any other entity (other than a Secondary Indemnitor (as defined below)), with respect to Indemnitee’s Corporate Capacity with such subsidiary
or entity, then the indemnification obligations of the Company hereunder with respect to such Corporate Capacity shall only apply to the extent that the indemnification by such subsidiary or other entity does not actually fully cover
the indemnifiable liabilities and expenses relating thereto. The following shall be hereinafter referred to as “Indemnifiable Events”:
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1.1.1. |
Any financial liability imposed on Indemnitee or incurred by Indemnitee in favor of another person by a court judgment, including a compromise judgment or an arbitrator’s award approved by court. For purposes of Section 1 of this
Agreement, the term “person” shall mean a natural person, firm, partnership, joint venture, trust, company, corporation, limited liability entity, unincorporated organization, estate,
government, municipality, or any political, governmental, regulatory or similar agency or body;
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1.1.2. |
Reasonable litigation Expenses, including, without limitation, attorney’s fees and the fees and expenses of investigators, accountants and other experts, incurred by Indemnitee as a result of an investigation or proceeding
instituted against Indemnitee by an authority authorized to conduct such investigation or proceeding, which: (i) is Concluded Without The Filing of An Indictment (as defined below) against Indemnitee and without the imposition on
Indemnitee of any Financial Obligation In Lieu of Criminal Proceedings (as defined below), or (ii) which is Concluded Without The Filing Of An Indictment against Indemnitee, but with the imposition on Indemnitee of a Financial
Obligation In Lieu of Criminal Proceedings in respect of an offense that does not require proof of criminal intent or in connection with a financial sanction;
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1.1.3. |
Reasonable litigation Expenses (as defined below), including, without limitation, fees, cost and expenses of attorneys, investigators, accountants and other experts, incurred by Indemnitee or charged to Indemnitee by court, (i) in
a proceeding instituted against Indemnitee by the Company or on its behalf or by another person; or (ii) in any criminal proceeding in which Indemnitee is acquitted; or (iii) in any criminal proceeding in which Indemnitee is convicted
of an offense that does not require proof of criminal intent; and
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1.1.4. |
Any financial obligation imposed upon Indemnitee and reasonable litigation Expenses, including, without limitation, reasonable attorney’s fees, incurred by Indemnitee as a result of an Administrative Proceeding (as defined below)
instituted against Indemnitee. Without derogating from the generality of the foregoing, such obligation or expense will include a payment that Indemnitee is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a)
of the Securities Law, 5728-1968 (the “Securities Law”) and Expenses that Indemnitee incurred in connection with a proceeding under Chapters H’3, H’4 or I’1of the Securities Law, including
reasonable legal Expenses, which term includes attorney’s fees.
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1.1.5. |
Any other event, occurrence or circumstances for which the Company may lawfully indemnify an Office Holder or shareholder of the Company.
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1.1.6. |
For purposes of this Section 1.1:
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1.1.6.1. |
The term “Concluded Without The Filing of An Indictment” regarding a matter in which a criminal proceeding was initiated, shall mean the closing of a file pursuant to Section 62 of the
Criminal Procedure Law [Consolidated Version], 5742-1982 (the “Criminal Procedure Law”) or a stay of process by the Attorney General pursuant to Section 231 of the Criminal Procedure Law; and
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1.1.6.2. |
a “Financial Obligation Imposed in Lieu of a Criminal Proceeding” shall mean a financial obligation imposed by law as an alternative to a criminal proceeding, including an administrative fine
pursuant to the Administrative Offenses Law, 5746-1985, a fine for committing an offense categorized as a finable offense pursuant to the provisions of the Criminal Procedure Law or a penalty.
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1.1.6.3. |
The term “Administrative Proceeding” shall mean a proceeding pursuant to Chapter H’3 (Imposition of Financial Sanctions by the Securities Authority), H’4 (Imposition of Administrative
Enforcement Measures by the administrative Enforcement Committee) or I’1 (Arrangement to Prevent the Initiation of Proceedings or to Conclude Proceedings, Subject to Conditions) of the Securities Law.
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1.1.6.4. |
For the purpose of this Agreement, “Expenses” shall include, without limitation, attorney’s fees and all other costs, expenses and obligations paid or incurred by Indemnitee in connection
with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in any claim relating to any Indemnifiable Event. Expenses shall be considered paid or
incurred by Indemnitee at such time as Indemnitee is required to pay or incur such costs or expenses, including upon receipt of an invoice or payment demand. The Company shall pay the Expenses in accordance with the provisions of
Section 1.4.
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1.2. |
Notwithstanding anything herein to the contrary, the Company shall indemnify Indemnitee under Section 1.1.1 in advance only with respect to the events described in Exhibit 1 (attached). The Board has determined that the events
listed in Exhibit 1 are reasonably foreseeable in light of the operations of the Company and that the maximum amount of indemnification payable by the Company under Section 1.1.1 to all persons with respect to whom the Company
undertook to indemnify under agreements similar to this Agreement (respectively the “Limit Amount” and the “Indemnifiable Persons”), per each event
detailed in Exhibit 1 and in the aggregate for all the events detailed in Exhibit 1 attached hereto, shall not exceed in all circumstances, more than 25% the company's equity, according to the Company's latest consolidated financial
statements, prior to the date that the indemnity was given provided to the Company pursuant to Section 7 below.
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1.3. |
If so requested by Indemnitee, and subject to the Company’s reimbursement right set forth in Sections 3 and 5 below, the Company shall advance amounts to cover Indemnitee’s Expenses for which Indemnitee is entitled to be
indemnified under Section 1.1 above, as and when incurred. The advances to be made hereunder shall be paid by the Company directly to Indemnitee’s legal and other advisors as soon as practicable, but in any event no later than fifteen
(15) days after the Company receives a written demand from Indemnitee. As part of the aforementioned undertaking, the Company will make available to Indemnitee any security or guarantee that Indemnitee may be required to post in
accordance with an interim decision given by a court, governmental or administrative body, or an arbitrator, including for the purpose of substituting liens imposed on Indemnitee’s assets.
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1.4. |
Subject to the limitations set forth in Sections 1.1, 1.2 and 1.4 above and in Section 2, the Company agrees to indemnify and hold harmless Indemnitee for and, if requested by Indemnitee, advance to Indemnitee (i) any and all
Expenses actually and reasonably paid or incurred by Indemnitee in connection with any claim by Indemnitee for indemnification by the Company under any provision of this Agreement, or under any other agreement or insurance policy or
applicable law, and/or (ii) any and all Expenses actually and reasonably paid or incurred by Indemnitee in connection with any claim by the Company or any other person to enforce their respective rights under any provision of this
Agreement, or under any other agreement or insurance policy or applicable law. Subject to the limitations set forth in Sections 1.1, 1.2 and 1.4 above and in Section 2, no indemnity shall be paid by the Company under this section if
there has been a finding, to which all rights of appeal have either lapsed or been exhausted, that each of the material assertions or defenses, as the case may be, made by Indemnitee in connection with such claim was frivolous or not
made in good faith.
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1.5. |
The Company’s obligation to indemnify Indemnitee and advance Expenses in accordance with this Agreement shall be for such period (the “Indemnification Period”) as Indemnitee shall be subject
to any actual, possible or threatened claim, action, suit, demand or proceeding or any inquiry or investigation, whether civil, criminal or investigative, arising out of Indemnitee’s service in the Corporate Capacity as described in
Section 1.1 above, whether or not Indemnitee is still serving in such position.
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1.6. |
Indemnitee shall be covered by the insurance policy or policies providing liability insurance for directors and officers of the Company, in accordance with its or their terms to the maximum extent of the coverage available for any
director or officer under such policy or policies.
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1.7. |
The Company undertakes to give prompt written notice of the commencement of any claim hereunder to its insurers in accordance with the procedures set forth in each of the policies. The Company shall thereafter diligently take all
actions reasonably necessary under the circumstances to cause such insurers to pay, on behalf of each Indemnitee, all amounts payable as a result of such action, suit, proceeding, inquiry or investigation in accordance with the terms
of such policies. The above shall not derogate from Company’s authority to freely negotiate or reach any compromise with the insurer that is reasonable at the Company’s sole discretion provided that the Company shall act in good faith
and in a diligent manner.
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2. |
SPECIFIC LIMITATIONS ON INDEMNIFICATION.
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2.1. |
Notwithstanding anything to the contrary in this Agreement, the Company shall not indemnify or advance Expenses to Indemnitee with respect to (i) any act, event or circumstance for which it is prohibited to do so under applicable
law; or (ii) a counter claim made by the Company or in its name in connection with a claim against the Company filed by Indemnitee, other than: (a) by way of defense or by way of third party notice in connection with a claim brought
against Indemnitee, or (b) in specific cases in which the Board has approved the initiation or bringing of such claim by Indemnitee, or (iii) any claim arising from the purchase and sale by Indemnitee of securities in violation of
Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any similar applicable law of any jurisdiction, if Indemnitee is held liable therefor after a final
adjudication to which all rights of appeal have either lapsed or been exhausted.
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2.2. |
Notwithstanding the above, for as long as it is prohibited under the applicable laws, the Company shall not indemnify or advance Expenses to Indemnitee in respect of Indemnitee's financial liability, where there has been a finding
in a final adjudication, to which all rights of appeal have either lapsed or been exhausted, that there has been: (i) a breach of a duty of loyalty by Indemnitee, except to the extent that Indemnitee acted in good faith and had a
reasonable basis to believe that the act would not prejudice the Company, (ii) a breach of the duty of care committed intentionally or recklessly by Indemnitee, excluding a breach arising out of the negligent conduct of Indemnitee,
(iii) an act or omission committed by Indemnitee with the intent to derive illegal personal benefit, (iv) a fine or forfeit levied against Indemnitee, or (v) a liability by the Indemnitee pursuant to Section 2.1(iii).
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2.3. |
Without derogating from the above, the Company shall enter into an agreement to insure Indemnitee for any liability that may be imposed on Indemnitee in connection with an act (or an omission) performed by Indemnitee in a Corporate
Capacity as permitted according to the Companies Law and any other applicable law.
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3. |
ADVANCEMENT OF EXPENSES.
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3.1. |
In the event that the Company provides indemnification or advancement of Expenses under Section 1 above, and thereafter, in respect of the same act, event or circumstance for which such indemnification or advance of Expenses under
Section 1 was provided to Indemnitee: (i) a financial obligation in lieu of a criminal proceeding for an offense that requires proof of mens rea is imposed on Indemnitee; and/or (ii)
Indemnitee is convicted of an offense that requires mens rea, as applicable, and/or (iii) there has been a finding in a final adjudication, to which all rights of appeal have either lapsed or
been exhausted, that Indemnitee was not entitled to such indemnification or advancement of Expenses pursuant to the Agreement, then, within sixty (60) days of receipt of a written demand by the Company to such effect, Indemnitee shall
repay to the Company all amounts previously paid by the Company as indemnification or advancement of Expenses in respect of such act, event or circumstance.
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3.2. |
Indemnitee’s obligation to reimburse the Company for any advanced Expenses or other sums paid hereunder shall be deemed a loan given to Indemnitee by the Company and shall bear the interest in accordance with Section 3(9) of the
Income Tax Ordinance [New Version], 1961 as amended or any other applicable law.
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4. |
SUBROGATION.
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4.1. |
Except as set forth in Section 4.2 below, in the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents
required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.
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4.2. |
The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement of expenses and/or insurance provided by third parties (other than subsidiaries of the Company or any party that is an
affiliate of the Company (collectively, the “Secondary Indemnitors”)). The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary
and any obligation of the Secondary Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), (ii) that it shall be required to advance the full amount of
expenses incurred by Indemnitee and shall be liable for the full amount of all Expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement and the
Articles of Association of the Company (or any other agreement between the Company and Indemnitee), without regard to any rights Indemnitee may have against the Secondary Indemnitors, and, (iii) that it irrevocably waives,
relinquishes and releases the Secondary Indemnitors from any and all claims against the Secondary Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no
advancement or payment by the Secondary Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the Secondary Indemnitors shall have
a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company. The Company and Indemnitee agree that the Secondary Indemnitors are express
third party beneficiaries of the terms of this Section 4.2.
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5. |
REIMBURSEMENT.
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6. |
EFFECTIVENESS.
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7. |
NOTIFICATION AND DEFENSE OF CLAIM.
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7.1. |
The Company will be entitled to participate therein at its own expense.
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7.2. |
Except as otherwise provided below, the Company, alone or jointly with any other indemnifying party similarly notified, will be entitled to assume the defense thereof, with counsel selected by the Company and reasonably
satisfactory to Indemnitee. Indemnitee shall have the right to employ Indemnitee’s own counsel in such action, suit or proceeding, but the fees and expenses of such counsel incurred after notice from the Company of its assumption of
the defense thereof shall be at Indemnitee’s expense, unless: (i) the employment of counsel by Indemnitee has been authorized in writing by the Company; (ii) Indemnitee and the Company shall have concluded, or independent counsel who is reasonably reputable with experience in the relevant field has opined in writing, that there may be a conflict of interest between the Company and Indemnitee in
the conduct of the defense of such action; or (iii) the Company has not in fact employed counsel to assume the defense of such action, in which cases the reasonable fees and expenses of counsel shall be at the expense of the Company.
The Company shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the Company or as specified in (ii) above.
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7.3. |
The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts or expenses paid in connection with a settlement of any action, claim or otherwise, effected without the Company’s prior written consent.
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7.4. |
The Company shall have the right to conduct the defense as it sees fit in its sole discretion (provided that the Company shall conduct the defense in good faith and in a diligent manner), including the right to settle or compromise
any claim or to consent to the entry of any judgment against Indemnitee without the consent of Indemnitee, provided that, the amount of such settlement, compromise or judgment does not exceed the Limit Amount (if applicable) and is
fully indemnifiable pursuant to this Agreement (subject to Section 1.4) and/or applicable law, and any such settlement, compromise or judgment does not impose any penalty or limitation on Indemnitee without Indemnitee’s prior written
consent. Indemnitee’s consent shall not be required if the settlement includes a complete release of Indemnitee, does not contain any admission of wrong-doing by Indemnitee, and includes monetary sanctions only as provided above. In
the case of criminal proceedings the Company and/or its legal counsel will not have the right to plead guilty or agree to a plea-bargain in Indemnitee’s name without Indemnitee’s prior written consent.
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7.5. |
Indemnitee shall fully cooperate with the Company and shall give the Company all information and access to documents, files and to their advisors and representatives as shall be within Indemnitee' power, in every reasonable way as
may be required by the Company with respect to any claim which is the subject matter of this Agreement and in the defense of other claims asserted against the Company (other than claims asserted by Indemnitee), provided that the
Company shall cover all expenses, costs and fees incidental thereto such that Indemnitee will not be required to pay or bear such expenses, costs and fees.
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8. |
EXEMPTION AND EXCULPATION.
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9. |
NON-EXCLUSIVITY.
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10. |
PARTIAL INDEMNIFICATION.
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11. |
POST FACTUM INDEMNIFICATION.
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12. |
INCREASE IN AMOUNT OF INDEMNIFICATION.
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13. |
COMPANY UNDERTAKINGS.
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14. |
ENFORCEMENT.
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15. |
BINDING EFFECT.
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16. |
SEVERABILITY.
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17. |
NOTICE.
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18. |
GOVERNING LAW; JURISDICTION.
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19. |
ENTIRE AGREEMENT AND TERMINATION.
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20. |
COUNTERPARTS.
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21. |
NO MODIFICATION AND NO WAIVER.
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Magal Security Systems Ltd.
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By:
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Name and title:
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Indemnitee
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Name:
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Signature:
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1.
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Claims in connection with employment relationships with employees of the Company, including in connection with pension arrangements,
insurance and saving funds, options and other employment related benefits, and in connection with business relations between the Company and its employees, independent contractors, customers, suppliers and other service providers.
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2.
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Negotiations, execution, delivery and performance of agreements of any kind or nature, anti-competitive acts, acts of commercial wrongdoing,
approval of corporate actions including the approval of the acts of the Company’s management, their guidance and their supervision, actions concerning the approval of transactions with Office Holders or shareholders, including controlling
persons and claims of failure to exercise business judgment and a reasonable level of proficiency, expertise and care with respect to the Company’s business.
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3.
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Violation, infringement or any other misuse of copyrights, patents, designs, trade secrets and any other intellectual property rights, breach
of confidentiality obligations, acts in regard of invasion of privacy including with respect to databases, acts in connection with slander and defamation, and claims in connection with publishing, hosting, or providing any, data, content
or information, including any filings with any governmental authorities, whether or not required under any applicable laws.
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4.
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Any claim or demand in connection with: (a) cyberattacks on the Company and/or its subsidiaries and/or any of their computer network or
system products and services, including without limitation, use of malicious code to alter computer code, logic or data, information and identity theft, malware, pharming, phishing, spamming, spoofing, spyware, trojans and viruses,
denial-of-service and distributed denial-of-service attacks; and (b) breaches of data, including, without limitation, any event in which sensitive, protected or confidential data, whether relating to the Company, any of its subsidiaries,
their customers, users, vendors or any other person or entity, has potentially been viewed, stolen or used by an individual unauthorized to do so.
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5.
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Violations of securities laws of any jurisdiction, including, without limitation, fraudulent disclosure claims, failure to comply with any
securities authority or any stock exchange disclosure or other rules and any other claims relating to relationships with investors, debt holders, shareholders and the investment community; claims relating to or arising out of financing
arrangements, any breach of financial covenants or other obligations towards lenders or debt holders of the Company, class actions, violations of laws requiring the Company to obtain regulatory and governmental licenses, permits and
authorizations in any jurisdiction; actions taken in connection with the issuance of any type of securities of Company, including, without limitation, the grant of options to purchase any of the same.
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6.
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Liabilities arising in connection with any products or services developed, distributed, sold, provided, licensed or marketed by the Company,
and any actions in connection with the distribution, sale, license or use of such products.
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7.
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The issue of securities (including an issue of securities that does not come to actual fruition) in Israel and abroad, including and without
derogating from the generality of the foregoing, an offer of securities to the public pursuant to a prospectus, a private placement, sale offer, issue of bonus shares or offer of securities in any other way, including, but without
limitation, a prospectus or registration statement for an initial public offering including public offerings in NYSE, NYSE MKT and NASDAQ.
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8.
|
An event arising from the fact of the Company being a publicly traded company or arising from the fact that the shares of the Company are
traded on a stock exchange in the the United States or abroad.
|
9.
|
Events in connection with an actual or proposed change in ownership or in the structure of the Company, its reorganization, dissolution, or
any decision concerning any of the foregoing, including but not limited to, merger, sale or acquisition of assets, division, change in capital.
|
10.
|
Any claim or demand made in connection with any transaction not in the ordinary course of business of the Company, including the sale, lease
or purchase of any assets or business, receiving and granting credit and the giving or receiving of collateral security, including contracting under finance agreements with banks and/or other financial entities for purposes of financing
transactions or contractual arrangements, including a transaction with an interested party.
|
11.
|
Any claim or demand made by any third party suffering any personal injury and/or bodily injury or damage to business or personal property or
any other type of damage through any act or omission attributed to the Company, or its employees, agents or other persons acting or allegedly acting on its behalf.
|
12.
|
Any claim or demand made directly or indirectly in connection with complete or partial failure, by the Company or its directors, officers and
employees, to pay, report, keep applicable records or otherwise, of any foreign, federal, state, county, local, municipal or city taxes or other compulsory payments of any nature whatsoever, including, without limitation, income, sales,
use, transfer, excise, value added, registration, severance, stamp, occupation, customs, duties, real property, personal property, capital stock, social security, unemployment, disability, payroll or employee withholding or other
withholding, including any interest, penalty or addition thereto, whether disputed or not.
|
13.
|
Any administrative, regulatory or judicial actions, orders, decrees, suits, demands, demand letters, directives, claims, liens,
investigations, proceedings or notices of noncompliance or violation by any governmental entity or other person alleging the failure to comply with any statute, law, ordinance, rule, regulation, order or decree of any governmental entity
applicable to the Company or any of its businesses, assets or operations, or the terms and conditions of any operating certificate or licensing agreement.
|
14.
|
A report or notice lodged according to the Companies Law or the Securities Law, including regulations made pursuant thereto, or according to
rules or directives currently applied by on a Stock Exchange in Israel, the United States or elsewhere abroad, or according to a law of another country which regulates similar matters and/or the failure to submit such report or notice.
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15.
|
Participation and/or non-participation at the Company’s Board meetings, bona fide expression of opinion and/or voting and/or abstention from
voting at the Company’s Board meetings.
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16.
|
Any act or a derivative thereof connected with the adopting of financial reporting according to international financial reporting standards
(IFRS) or accepted accounting principles in the USA (US GAAP) or any financial reporting standards practiced by the Company or its subsidiaries, including, without limitations, execution of certificates for the benefit of third parties
related to the financial statements.
|
17. .
|
All actions, consents and approvals relating to a distribution of dividends, in cash or otherwise.
|
18.
|
Actions taken pursuant to or in accordance with policies and procedures of the Company (including tax policies and procedures), whether such
policies and procedures are published or not.
|
19.
|
An act or a derivative thereof that is contrary to the Company's Articles of Association.
|
20.
|
Implementing of a tender offer and/or a sale offer and any proceeding, opinion, document and/or report in connection therewith.
|
21.
|
Any claim and/or demand in relation to non-disclosure or failure to supply any sort of information at the time required according to law or
stock exchange regulations and/or in connection with a misleading or faulty disclosure of such information, to third parties, and included in this to the holders of the Company’s securities and/or potential holders of securities,
including in regard to a public offering, allotment, distribution, purchase, holding and/or connection with securities of the Company and/or any other investment activity involving and/or affecting the Company’s securities.
|
22.
|
Resolutions and/or actions relating to environmental matters.
|
23.
|
Resolutions and/or actions in connection with the approval of financial statements of the Company or its subsidiaries.
|
24.
|
Representations and warranties made in good faith in connection with the business of the Company or its subsidiaries.
|
25.
|
Resolutions and/or actions in connection with any restrictive trade practice or monopolies of the Company or its subsidiaries.
|
26.
|
Resolutions and/or actions relating to the operations and management of the Company or its subsidiaries.
|
27.
|
Resolutions and/or actions in connection with a subsidiary or a company affiliated with the Company.
|
*
|
Any reference in this Exhibit 1 to the Company shall include the Company and any entity in which Indemnitee serves in a Corporate Capacity.
|
Executive Level
|
Average
|
Median
|
Active Chairman
|
0.8
|
0.9
|
CEO
|
11.1
|
13.0
|
Other Senior Executives
|
4.2
|
4.9
|
Executive
Level
|
Variable Compensation3
|
|
Annual Performance-
Based Incentive Cash Compensation
|
Long-Term Equity Based
Incentive Compensation
|
|
CEO
|
Up to 75%
|
Up to 100%
|
Other
Executives
|
Up to 50%
|
Up to 60%
|
4
|
"Cause" means the following: termination due to: (i) an Senior Executive's conviction
of, or plea of guilty or nolo contendere to, a felony (ii) performance by a Senior Executive of an illegal act, dishonesty, or fraud which could cause significant economic injury to the Company; (iii) a Senior Executive's
insubordination, refusal to perform his or her duties or responsibilities for any reason other than illness or incapacity or materially unsatisfactory performance of his or her duties for the Company; (iv) continuing willful and
deliberate failure by the Senior Executive to perform the executive's duties in any material respect, provided that the Senior Executive is given notice and an opportunity to effectuate a cure as determined by the Company; or (v)
a Senior Executive's willful misconduct with regards to the Company that could have a material adverse effect on the Company.
|
|
◾
|
Implementation or completion of specified projects or processes;
|
|
◾
|
Customer satisfaction;
|
|
◾
|
Productivity;
|
|
◾
|
The formation of joint ventures;
|
|
◾
|
Research or development collaborations, or the Completion of other transactions;
|
|
◾
|
Market share;
|
|
◾
|
Completion of acquisitions of assets;
|
|
◾
|
Acquisitions of businesses or companies;
|
|
◾
|
Completion of divestitures and asset sale;
|
|
◾
|
Greater geographic and product diversification;
|
|
◾
|
Enhancing the Company’s succession planning and performance-driven culture by adding new talent in key roles;
|
|
◾
|
Defending pending litigation matters and protecting the Company’s intellectual property;
|
|
◾
|
Launching research and development initiatives
|
|
◾
|
Effectively representing the Company in various Legislative and regulatory matters
|
|
◾
|
Expansion of customer and strategic partner base;
|
|
◾
|
Production performance including buoy deployments, quality and safety;
|
|
◾
|
Creation and advancement of technology;
|
|
◾
|
Development and management of the employee base;
|
|
◾
|
Maintenance of worldwide regulatory compliance;
|
|
◾
|
Improving technical achievements;
|
|
◾
|
Adherence to ethical standards;
|
|
◾
|
New orders;
|
|
◾
|
New customers;
|
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.
|
|
1.
|
To re-elect four (4) directors for terms expiring at the Company’s 2020 Annual General Meeting of Shareholders.
|
FOR
|
AGAINST
|
ABSTAIN
|
|
PLEASE NOTE THAT YOU ARE REQUIRED TO INDICATE WITH RESPECT TO ITEMS 2, 3 AND 4, WHETHER OR NOT YOU ARE THE CONTROLING
SHAREHOLDER OF THE COMPANY OR WHETHER OR NOT YOU HAVE A PERSONAL INTEREST IN THE PROPOSALS SET FORTH IN ITEMS 2, 3 AND 4. IF YOU FAIL TO NOTIFY US AS TO WHETHER OR NOT YOU ARE THE CONTROLING SHAREHOLDER OF THE COMPANY OR WHETHER OR NOT
YOU HAVE A PERSONAL INTEREST WITH RESPECT TO ITEMS 2, 3 AND 4, YOUR VOTE WILL NOT BE COUNTED WITH RESPECT TO SUCH ITEM.
|
|
GILLON BECK |
☐
|
☐
|
☐
|
|
RON BEN-HAIM
|
☐ | ☐ | ☐ | |||
JACOB BERMAN
|
☐ | ☐ | ☐ | |||
AVRAHAM BIGGER
|
☐ | ☐ | ☐ | |||
2. |
To elect one (1) external director for a three year term. | |||||
LIMOR STEKLOV | ☐ |
☐ | ☐ | |||
Are you (a) a controlling shareholder of the Company; or (b) do you have a personal interest in the approval of Proposal 2 as such terms are
explained in the proxy statement?
|
YES
☐
|
NO
☐
|
||||
FOR |
AGAINST |
ABSTAIN |
||||
3. |
To re-adopt the Company's updated Compensation Policy. |
☐ | ☐ |
☐ |
||
Are you (a) a controlling shareholder of the Company; or (b) do you have a personal interest in the approval of Proposal 3 as such terms are
explained in the proxy statement?
|
YES
☐
|
NO
☐
|
||||
FOR | AGAINST | ABSTAIN |
||||
4. |
To re-approve the compensation of the Company's directors associated with the controlling shareholder including but not limited to: (1) terms
of employment of the chairman of the board; and (2) the issuance and delivery of indemnification letters.
|
☐ |
☐ |
☐ |
||
Are you (a) a controlling shareholder of the Company; or (b) do you have a personal interest in the approval of Proposal 4 as such terms
are explained in the proxy statement?
|
YES
☐
|
NO
☐
|
||||
FOR | AGAINST | ABSTAIN | ||||
5. |
To approve the issuance and delivery of indemnification letters to each of our directors and officers appointed from time to time.
|
☐ | ☐ |
☐ |
||
6. | To ratify and approve the reappointment of Kost Forer Gabbay & Kasierer, registered public accountants, a member firm of Ernst & Young Global, as our independent registered public accountants for the year ending December 31, 2019, and to authorize our audit committee to fix the remuneration of such independent registered public accountants in accordance with the volume and nature of their services. | ☐ | ☐ |
☐ | ||
Shareholders entitled to notice of and to vote at the meeting shall be determined as of the close of business on July 12, 2019, the record date fixed by the Board of Directors for such
purpose.
|
||||||
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.
|
☐ |
Signature of Shareholder
|
|
Date:
|
|
Signature of Shareholder |
|
Date: |
|
Note:
|
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.
|