OPTIBASE LTD.
8 Hamenofim Street Herzliya, Israel
+972-73-7073700
Dear Shareholder,
You are cordially invited to attend the Annual and Extraordinary General Meeting of Shareholders of Optibase Ltd. (the "Company") to be held at 4:00 p.m., Israel time, on Tuesday, August 17, 2021, at the Company’s offices at 8 Hamenofim Street, Herzliya, Israel.
The purpose of this meeting is set forth in the accompanying Notice of Meeting and Proxy Statement.
For the reasons set forth in the accompanying Proxy Statement, the Company’s board of directors recommends that you vote "FOR" Proposals No. 1 through 8, as specified on the enclosed form of proxy.
We look forward to greeting personally those shareholders who are able to be present at the meeting. However, whether or not you plan to attend the meeting, it is important that your shares be represented. Accordingly, you are kindly requested to sign, date and mail the enclosed proxy in the envelope provided at your earliest convenience so that it will be received not later than two business days before the meeting.
Thank you for your continued cooperation.
| Very truly yours,
Alex Hillman, Executive Chairman of the Board of Directors |
Herzliya, Israel
July 8, 2021
AS A FOREIGN PRIVATE ISSUER, WE ARE EXEMPT FROM THE RULES UNDER THE SECURITIES EXCHANGE ACT RELATED TO THE FURNISHING AND CONTENT OF PROXY STATEMENTS. THE CIRCULATION OF THIS PROXY STATEMENT SHOULD NOT BE TAKEN AS AN ADMISSION THAT WE ARE SUBJECT TO THOSE PROXY RULES.
OPTIBASE LTD.
8 Hamenofim Street Herzliya, Israel
+972-73-7073700
NOTICE OF ANNUAL AND EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
Notice is hereby given that an Annual and Extraordinary General Meeting of Shareholders (the "Meeting") of Optibase Ltd. (the "Company") will be held at 4:00 p.m., Israel time, on Tuesday, August 17, 2021, at the Company’s offices at 8 Hamenofim Street, Herzliya, Israel, for the following purposes:
1. To re-elect to the Company’s board of directors (the "Board of Directors") three (3) of the directors currently in office (a separate vote for each director will be taken);
2. To re-appoint Kost, Forer, Gabbay & Kasierer, a member of Ernst & Young Global, as the Company’s independent auditors for the fiscal year ended December 31, 2021, and to authorize the Board of Directors, upon the recommendation of the Company’s audit committee (the "Audit Committee"), to determine the auditors’ remuneration to be fixed in accordance with the volume and nature of their services to the Company for such fiscal year;
3. To approve a new compensation policy for the Company's directors and officers, in the form attached hereto as Annex A (marked to show changes against the existing compensation policy);
4. To approve the grant of the Company’s letter of indemnification to Mr. Shlomo (Tom) Wyler, the Chief Executive Officer of the Company’s subsidiary, Optibase Inc., who is affiliated with the controlling shareholder of the Company;
5. To approve the grant of the Company’s letter of indemnification to Mr. Reuwen Schwarz, a member of the Company’s Board of Directors, who is affiliated with the controlling shareholder of the Company;
6. To approve a bonus grant to Mr. Amir Philips, the Company's Chief Executive Officer;
7. To approve a bonus grant to Ms. Yakir Ben-Naim, the Company's Chief Financial Officer; and
8. To approve an extension of the Company's engagement with Mr. Shlomo (Tom) Wyler, who is affiliated with the Company's controlling shareholder, as the Chief Executive Officer of Optibase Inc., the Company's subsidiary, for a three-year term, commencing on January 1, 2022 and ending on December 31, 2024.
In addition, the shareholders will be requested to consider at the Meeting the Board of Directors’ report and the financial statements of the Company for the fiscal year ended December 31, 2020. These documents can be found on the Company’s website at: www.optibase-holdings.com.
Shareholders may present proposals for consideration at the Meeting by submitting their proposals to the Company no later than July 15, 2021.
Finally, the shareholders may consider and act upon such other business as may properly come before the Meeting and any adjournment thereof.
Only shareholders of record at the close of the trading day of July 14, 2021, are entitled to notice of, and to vote at, the Meeting and any adjournment thereof. All shareholders are cordially invited to attend the Meeting in person. Shareholders who are unable to attend the Meeting in person are requested to complete, date and sign the enclosed form of proxy and return it promptly in the pre-addressed envelope provided.
Your proxy may be revoked at any time before it is voted by you returning a later-dated proxy card or by voting your shares in person at the Meeting. Shareholders who hold their shares in "street name", meaning in the name of a bank, broker or other record holder, must either direct the record holder of their shares on how to vote their shares or obtain a legal proxy from the record holder to vote the shares at the Meeting on behalf of the record holder together with a proof of such record holder with respect to the holding of the shares on the record date. You should follow the directions provided by your broker or nominee regarding how to instruct them to vote your shares.
Joint holders of shares should note that, pursuant to the articles of association of the Company, the vote of the senior of joint holders of any share who votes such share, whether in person or by proxy, will be accepted to the exclusion of the vote(s) of the other registered holder(s) of such share, and for this purpose seniority will be determined by the order in which the names of the joint holders appear in the Company’s register of shareholders. The appointment of a proxy to vote shares held by joint holders shall be executed by the signature of the senior of the joint holders on the proxy card.
| By Order of the Board of Directors,
Alex hillman, Executive Chairman of the Board of Directors |
Herzliya, Israel
July 8, 2021
OPTIBASE LTD.
8 Hamenofim Street Herzliya, Israel
+972-73-7073700
PROXY STATEMENT
This Proxy Statement is being furnished to the holders of Ordinary Shares, New Israeli Shekels 0.65 nominal value (the "Shares"), of Optibase Ltd. (the "Company") in connection with the solicitation of proxies by the management and board of directors of the Company (the "Board of Directors") for use at the Annual and Extraordinary General Meeting of Shareholders (the "Meeting") to be held at 4:00 p.m., Israel time, on Tuesday, August 17, 2021, at the Company’s offices at 8 Hamenofim Street, Herzliya, Israel, or at any adjournment thereof, pursuant to the accompanying notice of meeting (the "Notice").
At the Meeting, the shareholders will be asked to consider and vote on the following matters:
1. To re-elect to the Board of Directors three (3) of the directors currently in office (a separate vote for each director will be taken);
2. To re-appoint Kost, Forer, Gabbay & Kasierer, a member of Ernst & Young Global, as the Company’s independent auditors for the fiscal year ended December 31, 2021, and to authorize the Board of Directors, upon the recommendation of the Company’s audit committee (the "Audit Committee"), to determine the auditors’ remuneration to be fixed in accordance with the volume and nature of their services to the Company for such fiscal year; and
3. To approve a new compensation policy for the Company's directors and officers, in the form attached hereto as Annex A (marked to show changes against the existing compensation policy);
4. To approve the grant of the Company’s letter of indemnification to Mr. Shlomo (Tom) Wyler, the Chief Executive Officer of the Company’s subsidiary, Optibase Inc., who is affiliated with the controlling shareholder of the Company;
5. To approve the grant of the Company’s letter of indemnification to Mr. Reuwen Schwarz, a member of the Company’s Board of Directors, who is affiliated with the controlling shareholder of the Company;
6. To approve a bonus grant to Mr. Amir Philips, the Company's Chief Executive Officer;
7. To approve a bonus grant to Ms. Yakir Ben-Naim, the Company's Chief Financial Officer; and
8. To approve an extension of the Company's engagement with Mr. Shlomo (Tom) Wyler, who is affiliated with the Company's controlling shareholder, as the Chief Executive Officer of Optibase Inc., the Company's subsidiary, for a three-year term, commencing on January 1, 2022 and ending on December 31, 2024.
In addition, the shareholders will be requested to consider at the Meeting the Board of Directors’ report and the financial statements of the Company for the fiscal year ended December 31, 2020. These documents can be found on the Company’s website at: www.optibase-holdings.com.
Finally, the shareholders may consider and act upon such other business as may properly come before the Meeting and any adjournment thereof.
Currently, we are not aware of any other matters that will come before the Meeting. If any other matters properly come before the Meeting, the persons designated as proxies intend to vote in accordance with their best judgment on such matters. As more fully described in the Proxy Statement, shareholders may present proposals for consideration at the Meeting by submitting their proposals to the Company no later than July 15, 2021. If we determine that a shareholder proposal is appropriate for inclusion in the Meeting agenda, we will publish a revised agenda in the manner set forth in the section entitled "Proposals of Shareholders" below.
The approval of each of Proposals No. 1 and 2 requires the affirmative vote of at least a majority of the votes of shareholders participating at the Meeting in person or by proxy.
The approval of each of Proposals No. 3, 6 and 7 requires the affirmative vote of shareholders participating in the voting at the Meeting in person or by proxy; provided, that (i) such majority vote at the Meeting shall include a majority of the total votes of shareholders participating in the voting at the Meeting in person or by proxy who are neither (a) the controlling shareholders of the Company, nor (b) have a personal interest in the approval of the proposal (votes abstaining shall not be taken into account in counting the above-referenced shareholders' votes); or (ii) the total number of Shares of the shareholders mentioned in clause (i) above that are voted against such proposal does not exceed two percent (2%) of the total voting rights in the Company.
The approval of each of Proposals No. 4, 5 and 8 requires the affirmative vote of shareholders participating in the voting at the Meeting in person or by proxy; provided, that (i) such majority vote at the Meeting shall include a majority of the total votes of shareholders having no personal interest in the proposal, participating in the voting at the Meeting in person or by proxy (votes abstaining shall not be taken into account in counting the above-referenced shareholders' votes); or (ii) the total number of Shares of the shareholders mentioned in clause (i) above that are voted against such proposal does not exceed two percent (2%) of the total voting rights in the Company.
Under the Israeli Companies Law of 1999 (the "Companies Law"), each shareholder that attends the Meeting in person shall, prior to exercising such shareholder's voting rights at the Meeting, advise the Company whether or not that shareholder is a controlling shareholder of the Company with respect to the approval of each of Proposals No. 3, 6 and 7, and whether or not that shareholder has a personal interest (as defined herein), with respect to the approval of Proposal No. 3 through 8. Each shareholder that delivers a signed proxy to the Company must indicate on the proxy whether or not that shareholder is a controlling shareholder of the Company with respect to the approval of each of Proposals No. 3, 6 and 7, and whether or not that shareholder has a personal interest (as defined herein) with respect to the approval of Proposal No. 3 through 8. Shareholders who do not so indicate will not be eligible to vote their Shares as to such proposals.
The Companies Law defines a "personal interest" as a personal interest of a person in an act or transaction of a company, including:
(i) a personal interest of that person's relative (i.e. spouse, sibling, parent, grandparent, child, child sibling and parent of such person's spouse or the spouse of any of the above); or
(ii) a personal interest of another entity in which that person or his or her relative (as defined above) holds 5% or more of such entity's issued shares or voting rights, has the right to appoint a director or the chief executive officer of such entity, or serves as director or chief executive officer of such entity.
A personal interest resulting merely from holding a company's shares will not be deemed a personal interest.
The term "controlling shareholder" shall carry the meaning ascribed to it in the Companies Law.
Each Share is entitled to one vote upon each matter to be voted on at the Meeting. No less than two shareholders present in person or by proxy, or who have sent the Company a voting instrument indicating the way in which they are voting, and holding or representing at least thirty three and one third percent (33.33%) of the voting rights in the Company, shall constitute a quorum. If no quorum is present within half an hour of the time fixed for the Meeting, the Meeting shall stand adjourned for seven days, to the same day of the week at the same time and place, without further notice being given thereof, or to such other date, time and place as prescribed by the Board of Directors in notice to the shareholders, and the adjourned Meeting shall discuss those matters for which the first meeting was called. If no quorum is present at the adjourned Meeting, two shareholders, at least, present in person or by proxy, shall constitute a quorum, subject to the provisions of section 79(b) of the Companies Law.
VOTING PROCEDURES; EXPRESSING POSITIONS
Registered Shareholders
Shareholders registered in the Company's shareholders register ("Registered Shareholders") may vote their Shares by attending the Meeting and voting their Shares in person, or by completing the enclosed proxy card, signing and dating it and mailing it either in the enclosed postage prepaid envelop or to the Company's offices. Registered Shareholders who vote their Shares by proxy must also provide the Company with a copy of their identity card, passport or certificate of incorporation, as the case may be.
Shareholders in "Street Name" whose Shares are held through CEDE & Co.
Shareholders who hold their Shares in "street name" meaning in the name of a bank, broker or other record holder, through CEDE & Co., must either direct the record holder of their Shares how to vote their Shares or obtain a legal proxy from the record holder to vote at the Meeting on behalf of the record holder together with a proof of such record holder with respect to the holding of the Shares on the record date. You should follow the directions provided by your broker or nominee regarding how to instruct them to vote your shares.
Shareholders in "Street Name" whose Shares are held through Members of the Tel Aviv Stock Exchange ("TASE")
Shareholders who hold their Shares in "street name" meaning in the name of a bank, broker or other record holder, through members of the TASE, may vote their Shares either (i) in person or by proxy delivered to the Company together with an ownership certificate confirming their ownership of the Company’s Shares on the record date, which certificate must be approved by a recognized financial institution, as required by the Israeli Companies Regulations (Proof of Ownership of Shares for Voting at General Meeting) of 2000, as amended; or (ii) electronically via the electronic voting system of the Israel Securities Authority which vote shall be cast no later than August 17, 2021 at 10:00 a.m. Israel time. You may receive guidance on the use of the electronic voting system from the TASE member through which you hold your Shares.
Note for Shareholders Voting via Proxy Card
Shareholders who vote their Shares via proxy card may use the form of proxy and the return envelope enclosed. Shares represented by executed and unrevoked proxies will be voted at the Meeting. To the extent permitted by law and applicable stock exchange requirements, if a written proxy card is signed by a shareholder and returned without instructions, the Shares represented by the proxy will be voted "FOR" all of the proposals set forth above, except with respect to Proposals No. 3 through 8. If a shareholder instructs in a proxy to abstain from voting on a specific proposal, the Shares represented by such proxy will be deemed not to have been cast for the purpose of that particular proposal and, accordingly, such Shares shall not be counted in calculating the percentage of affirmative votes required for approval of such proposal, but they will be counted for the purpose of determining a quorum.
Shareholders may revoke their proxies at any time before the effective exercise thereof by returning a later-dated proxy card or by voting their Shares in person at the Meeting if the Shareholders are the record holder of the Shares and can provide evidence of such (i.e., a copy of certificate(s) evidencing their Shares). If a shareholder’s proxy is not received by the Company no later than August 17, 2021 at 12:00 p.m. Israel time, it shall not be valid at the Meeting. Notwithstanding the aforesaid, the chairman of the Meeting may, at his or her discretion, accept proxies after such time if he or she so deems fit.
Position Statements
Shareholders are permitted to express their position on the proposal on the agenda of the Meeting by submitting a written statement, through the Company, to the other shareholders (the "Position Statement"). Position Statements should be submitted to the Company at its registered offices, at 8 Hamenofim Street, Herzliya, Israel, to the attention of Mr. Amir Philips, Chief Executive Officer of the Company, no later than August 7, 2021. Reasonable costs incurred by the Company in dealing with a Position Statement shall be borne by the submitting shareholder.
Management and the Board of Directors are soliciting proxies for use at the Meeting. Proxies will be mailed to shareholders on or about July 15, 2021 and will be solicited primarily by mail; however, additional solicitations may be made by telephone, facsimile or other means of contact by certain directors, officers, employees or agents of the Company, none of whom will receive additional compensation therefore. The entire expense of solicitation, including the cost of preparing, printing, assembling and mailing the proxy materials will be borne by the Company. The Company will also reimburse the reasonable expenses of brokerage firms and others for forwarding materials to beneficial owners of Shares.
OUTSTANDING SHARES AND VOTING RIGHTS
The Company had 5,216,256 Shares outstanding as of July 7, 2021 excludes 17,895 ordinary shares held by us or for our benefit with no voting or equity rights as of July 7, 2021 or within 60 days thereafter. Each Share is entitled to one vote upon each proposal to be presented at the Meeting.
BENEFICIAL OWNERSHIP OF SECURITIES BY CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of July 7, 2021, the number of Shares owned by (i) all shareholders known to the Company to own 5% or more of the Shares and (ii) all current directors and officers of the Company as a group:
| Name of Beneficial Owner | | No. of Ordinary Shares Beneficially Owned(1) | | | Percentage of Ordinary Shares Beneficially Owned | |
The Capri Family Foundation (2) | | | 4,097,201 | | | | 78.82 | % |
Shareholding of all directors and officers as a group (8 persons)(3) | | | 197,865 | | | | 3.81 | % |
| (1) | Number of shares and percentage ownership is based on 5,216,256 ordinary shares outstanding as of July 7, 2021. Excludes 17,895 ordinary shares held by us or for our benefit. Beneficial ownership is determined in accordance with rules of the SEC and includes voting and investment power with respect to such shares. Shares subject to options that are currently exercisable or exercisable within 60 days of July 7, 2021 are deemed to be outstanding and to be beneficially owned by the person holding such options for the purpose of computing the percentage ownership of such person, but are not deemed to be outstanding and to be beneficially owned for the purpose of computing the percentage ownership of any other person. All information with respect to the beneficial ownership of any principal shareholder has been furnished by such shareholder and, unless otherwise indicated below, we believe that persons named in the table have sole voting and sole investment power with respect to all the shares shown as beneficially owned, subject to community property laws, where applicable. The shares beneficially owned by the directors include the ordinary shares owned by their family members to which such directors disclaim beneficial ownership. |
| (2) | The information is accurate as of May 29, 2019 and is based on Amendment No. 7 to Schedule 13D filed with the SEC on June 19, 2019, by The Capri Family Foundation. According to such Amendment No. 7 to Schedule 13D, Capri directly owns 4,097,201 of our ordinary shares. The core activity of Capri is the holding of investments. In addition, the beneficiaries of Capri are the children of Mr. Tom Wyler, the Chief Executive Officer of our subsidiary, Optibase Inc. |
| (3) | Includes 159,225 ordinary shares held directly by the directors and officers and 38,640 ordinary shares which are held by a trustee for the benefit of our directors and executive officers under our 2006 Plan, which have vested on July 7, 2021 or within 60 days thereafter. Other than Shlomo (Tom) Wyler, all of our directors or executive officers hold less than 1% of our shares. |
DIRECTORS AND OFFICERS COMPENSATION
For information concerning the annual compensation granted to the five highest compensated directors and officers of the Company during the year ended December 31, 2020 see Item 6.B. of our Annual Report on Form 20-F for the year ended December 31, 2020, as filed with the Securities and Exchange Commission on April 27, 2021 (the "2020 Annual Report").
Proposal No. 1
RE-ELECTION TO THE COMPANY’S BOARD OF DIRECTORS THREE (3) OF THE
DIRECTORS CURRENTLY IN OFFICE
At the Meeting, three (3) directors are to be re-elected, who, together with the two (2) serving external directors, will constitute the Company’s Board of Directors. Each of the re-elected directors will hold office until the next annual general meeting, unless any office is earlier vacated under any relevant provisions of the articles of association of the Company or applicable laws or regulations. If no directors are appointed at the annual general meeting, the current directors shall continue to hold office. Unless otherwise instructed, all proxies will be voted in favor of the three nominees listed below.
Each of the nominees has indicated to the Company his availability for re-election and has declared that: (i) he has the required qualifications and ability to devote the time required for its service as a director with respect to the Company’s special needs and its size and specified the said qualifications; and (ii) that the limitations specified in sections 225 through 227 of the Companies Law do not apply to such nominee, all pursuant to section 224B of the Companies Law. Such declarations can be found in the Company's offices. In the event that any of the nominees should not continue to be available for election, the persons appointed as proxies may exercise their discretion to vote for a substitute nominee.
The directors have the right at any time, in a resolution approved by at least a majority of the Company’s directors, to appoint any person as a director, subject to the maximum number of directors pursuant to the Company’s articles of association, to fill a place, which has randomly been vacated, or as an addition to the Board of Directors. Any director so appointed shall hold office until the next annual general meeting and may be re-elected. The Company is not aware of any reason why any of the nominees, if elected, would be unable to serve as a director.
The table below sets forth the names of the nominees and the serving external directors, the years in which they first became directors of the Company, their present principal occupation or employment and their beneficial ownership of Shares as of July 7, 2021:
| NOMINEES | YEAR FIRST BECAME DIRECTOR | PRINCIPAL OCCUPATION OR EMPLOYMENT | PERCENTAGE OF BENEFICIAL OWNERSHIP OF SHARES(1)
|
| Alex Hillman | 2002 | Executive Chairman of the Board of Directors of the Company and Partner in an Israeli accounting firm | 0.4% (2) |
Danny Lustiger (*) | 2009 | Chief Executive Officer MedCu Technology Ltd. | 0.1% (3) |
| Reuwen Schwarz | 2014 | Independent Contractor Providing Services to the Company and Real Estate Manager for a Private Company | - |
| SERVING EXTERNAL DIRECTORS | YEAR FIRST BECAME DIRECTOR | PRINCIPAL OCCUPATION OR
EMPLOYMENT | PERCENTAGE OF BENEFICIAL OWNERSHIP OF SHARES(1) |
Tali Yaron-Eldar (*) | 2020 | An Israeli attorney specializing in taxation and is the co-founder of Yaron-Eldar, Paller, Schwartz & Co., Law Offices. Serves as a director in various Israeli public companies and served as the Commissioner of Income Tax and Real Property Tax Authority of the State of Israel | - |
Haim Ben-Simon (*) | 2019 | Served in various senior positions in private companies and currently serves as a director and strategic advisor in Sodexo B&R Israel Ltd. | - |
| (1) | See note 1 to the "Beneficial Ownership of Securities by Certain Beneficial Owners and Management" above. Based on information provided to the Company by the directors, the persons named in the table have sole voting and sole investment power with respect to all the shares shown as beneficially owned, subject to community property laws, where applicable. |
| (2) | Including 1,850 ordinary shares and 16,800 restricted shares that are currently exercisable or exercisable within 60 days as of July 7, 2021. |
| (3) | Including 4,000 restricted shares that are currently exercisable or exercisable within 60 days as of July 7, 2021. |
| (*) | Member of the Company’s Audit Committee and the Company's compensation committee (the "Compensation Committee"). |
Alex Hillman serves as Executive Chairman of our board of directors since September 2009. He has joined our board of directors in February 2002. Mr. Hilman is a certified accountant in Israel (C.P.A ISR.), and a partner in Hilman & Co., accountancy firm which provides auditing, tax and business consulting services to corporations. Mr. Hilman serves as a board member in other companies in Israel and abroad. Mr. Hilman was the president of the Israeli Institute of Certified Public Accountants in Israel, served on the board of IFAC (International Federation of Accountants), and was a member of the Small & Medium Practices committee in IFAC. Mr. Hilman has published professional works on tax and accounting, among them, The Israel Tax Guide. Mr. Hilman has also held professional and management positions at the ITA (the Israeli Tax Authorities) and lectured Taxation in Tel Aviv University. Mr. Hilman holds a B.A. in Accountancy and Economics from Tel-Aviv University.
Danny Lustiger joined our board of directors in October 2009. Mr. Lustiger is the Chief Executive Officer of MedCu Technology Ltd. and has over 25 years of experience in various aspects of Hi-Tech industry at senior positions together with Real estate and infrastructure industries, experience at senior positions in public companies. From 2019 and to date, Mr. Lustiger serves as a director at the Israeli Natural Gas Company Ltd., starting 2020 and to date, Mr. Lustiger serves as the Chairman of Mei Avivim Ltd.,from 2007 until 2009, Mr. Lustiger served as the Chief Financial officer of Shikun & Binui Holdings Ltd. From 2009 and until 2017 Mr. Lustiger served as teh president and the former Chief Executive Officer of Cupron Scientific. From 1996 and until 2005, Mr. Lustiger served at different managerial positions at Optibase including Chief Financial Officer. From 1993 to 1996 Mr. Lustiger held the position of an accountant and auditor at Igal Brightman & Co. (currently Brightman Almagor & Co., a member of Deloitte & Touche Tomatsu International). Mr. Lustiger is a Certified Public Accountant in Israel. Mr. Lustiger holds a B.A. degree in Accounting and Economics and an MBA in Finance and International management from the Tel-Aviv University.
Reuwen Schwarz joined our board of directors in July 2014. Mr. Schwarz serves as an independent contractor providing services to the Company since November 2013. Since 2012, Mr. Schwarz serves as a real estate manager for a private company. From 2008 through 2012 Mr. Schwarz has served as a manager for Centris Capital AG. From 2006 through 2008 Mr. Schwarz has served as a banker for Meinl Bank AG, Vienna. Mr. Schwarz holds a Magister (MA) degree from the University of Economic and Business Administration Vienna, Austria.
Pursuant to the Companies Law, an Independent Director, within the meaning of such term under the Companies Law, can serve for a period of up to 9 years. Nevertheless, regulations promulgated under the Companies Law provide that a company whose shares are listed on both the Nasdaq Global Market and the Tel Aviv Stock Exchange Ltd. may re-elect an Independent Director for additional terms of service if the company’s audit committee and board of directors find that, in light of the person’s expertise and special contribution to the function of the board of directors and its committees, his or her continued service as an independent director is to the benefit of the Company.
Mr. Danny Lustiger serves as an Independent Director of the Company for more than 9 years. Our Board of Directors, following the approval of our Audit Committee, approved and recommend our Shareholders to approve, the continued service of Mr. Danny Lustiger as a director of the Company for an additional term. In their approval, our Audit Committee and Board of Directors noted the following considerations: (i) Mr. Lustiger's education, professional experience and deep knowledge and understanding of the Company's business and the market in general; (ii) the recent replacement of the Company's two external directors, who together with Mr. Lustiger constitute the Audit Committee and Compensation Committee and therefore believes its beneficial to have an independent board member who has prior knowledge of the Company’s business as noted above; and (iii) the recent statement made by the Capri Family Foundation, the Company's controlling shareholder, on Schedule 13D filed on June 30, 2021, in which it was announced that preliminary steps have been taken to commence a tender offer for all of the shares of the Company. In light of the above, our Audit Committee and Board of Directors concluded that the re-election of Mr. Lustiger as a director of the Company for an additional term is to the Company's benefit.
Compensation
Mr. Hillman’s compensation terms as a director of the Company were approved by the Company’s shareholders on October 19, 2009. For further information on the compensation terms of Mr. Hillman, see "Directors and Officers Compensation" above and Item 6B in our 2019 Annual Report.
Mr. Lustiger’s compensation terms are identical to the compensation terms paid to the members of the Board of Directors, as approved by the Company’s shareholders on December 19, 2013. In addition, the Company granted Mr. Lustiger options and restricted shares of the Company under the 1999 Plan and the 2006 Plan. For further information on the compensation terms and the grants by the Company of options and restricted shares to Mr. Lustiger, see "Directors and Officers Compensation" above and Item 6B in our 2019 Annual Report.
Mr. Schwarz is not entitled to any compensation from the Company in his capacity as a director of the Company. For information on the terms of the service agreement between the Company and Mr. Schwarz for the provision of real estate related consulting services to the Company, its subsidiaries and affiliates, see Item 7.B "Related Party Transactions", in our 2020 Annual Report.
The three proposed nominees for director’s service in the Company will continue to benefit from coverage under the Company’s directors’ and officers’ liability insurance policies and from the letters of indemnification provided to them by the Company, subject to Proposal No. 5.
Alternate Directors
Subject to the Companies Law, the articles of association of the Company provide that any director may appoint another person (who is neither a member of the Board of Directors nor an alternate director) to serve as an alternate director at any meeting of the Board of Directors at which the appointing director is not present, and may remove such alternate director, provided however, that such alternate director is approved in a resolution approved by at least a majority of the Company’s directors. Pursuant to the Company’s articles of association, any alternate director may exercise all the powers vested in the director for whom he is serving as alternate director. The appointment of an alternate director does not in itself diminish the responsibility of the appointing director as a director.
The articles of association of the Company also provide that the Board of Directors may delegate its powers (subject to limitations under the Companies Law) to one or more committees of the Board of Directors, as it deems appropriate, subject to the provisions of the Companies Law.
External Directors
The term of the Company’s current external directors, Ms. Tali Yaron-Eldar and Mr. Haim Ben-Simon, will end on January 31, 2023, and December 31, 2022, respectively. It is proposed that the following resolution be adopted at the Meeting:
"RESOLVED, that the re-election of Messrs. Hillman, Lustiger and Schwarz as directors of the Company, as presented to the shareholders, be, and same hereby is, approved." |
The Board of Directors recommends a vote FOR approval of this proposed resolution.
Proposal No. 2
RE-APPOINTMENT OF KOST, FORER, GABBAY & KASIERER, A MEMBER OF ERNST &
YOUNG GLOBAL, AS THE COMPANY’S INDEPENDENT AUDITORS FOR THE FISCAL
YEAR ENDED DECEMBER 31, 2021 AND TO AUTHORIZE THE BOARD OF DIRECTORS,
UPON THE RECOMMENDATION OF THE AUDIT COMMITTEE, TO DETERMINE THE
AUDITORS’ REMUNERATION TO BE FIXED IN ACCORDANCE WITH THE VOLUME AND
NATURE OF THEIR SERVICES TO THE COMPANY FOR SUCH FISCAL YEAR
Following the recommendation of the Audit Committee and Board of Directors, it is proposed to re-appoint Kost, Forer, Gabbay & Kasierer, a member of Ernst & Young Global, as the Company’s independent auditors for the fiscal year ending on December 31, 2021 and to authorize the Board of Directors, upon the recommendation of the Audit Committee, to determine the auditors’ remuneration in accordance with the volume and nature of their services to the Company for such fiscal year.
Such auditors have served as the Company’s auditors since its establishment and have no relationship with the Company or with any affiliate of the Company, except as auditors.
It is proposed that the following resolution be adopted at the Meeting:
"RESOLVED, that the re-appointment of Kost, Forer, Gabbay & Kasierer, a member of Ernst & Young Global as the Company’s independent auditors for the fiscal year ending on December 31, 2021, and the authorization of the Board of Directors, upon the recommendation of the Audit Committee, to determine the remuneration of said auditors in accordance with the volume and nature of their services to the Company, and as presented to the shareholders, be, and same hereby are, approved." |
The Board of Directors recommends a vote FOR approval of this proposed resolution.
Proposal No. 3
APPROVAL OF A NEW COMPENSATION POLICY
Under the Companies Law, a public company is required to adopt a compensation policy, which sets forth the terms of service and employment of office holders, including the grant of any benefit, payment or undertaking to provide payment, any exemption from liability, insurance or indemnification, and any severance payment or benefit. The compensation policy must be approved at least once every three years, by the board of directors, after considering the recommendations of the compensation committee, and by the shareholders by a special majority (as described above).
Our current Compensation Policy, approved by our shareholders on February 14, 2019, and as amended on February 14, 2020, and December 30, 2020, was drafted and approved in accordance with the requirements of the Companies Law.
Our Board of Directors, following the recommendation of the Compensation Committee, approved, subject to shareholder approval, a new compensation policy. The principal changes in the newly proposed compensation policy compared to the existing compensation policy are detailed below:
(i) clarification that the compensation under the policy can also be paid by means of management fees (instead of salaries) provided that the aggregate amount of management fee will not exceed the ceilings provided for the base salary, including relevant benefits and their cost to the Company for the relevant Executive Officer and Executive Chairman.
(ii) deletion of the thresholds conditions for the grant of annual bonuses;
(iii) increasing the number of measurable criteria pursuant to which the Company's CEO may be measured against;
(iv) clarification regarding the maximum bonus grants of the Executive Officers and Executive Chairman;
(vi) allowing directors to provide to the Company additional service, which is not related to their service as directors, at a total consideration which shall not exceed Euro 50,000 per annum.
A copy of the proposed compensation policy marked to show changes to the existing Compensation Policy is attached hereto as Annex A.
The considerations which guided the Compensation Committee and Board of Directors in approving the proposed compensation policy were: promoting the Company's interests, its work plan and policy from a long-term perspective considering, inter alia, the Company's risk management policy, size and nature of its operations and - with regard to terms of office and employment which include variable components - the officer's contribution to achieving the Company's objectives and to maximizing its earnings, all from the long-term perspective and in accordance with the officer's role.
The principles of the proposed compensation policy were established after internal discussions by the Compensation Committee and by the Board of Directors. In designing the principles of the proposed compensation policy, the Compensation Committee and the Board of Directors took into consideration, inter alia: (a) the education, qualifications, expertise, professional experience and achievements of each officer; (b) the role of the officer, areas of responsibility and previous compensation agreements entered into with him; (c) the ratio between the terms of compensation of the officers as may be provided under the compensation policy and the terms of compensation of other employees of the Company, considering also the average and median annual cost of the fixed component payable to all Company full time team members; and (d) regarding terms of compensation that include variable components - the possibility of reducing the variable components at the discretion of the Board of Directors and the possibility to limit the exercise value of any equity based variable component. In addition, the Compensation Committee and the Board of Directors concluded that the Compensation Policy is fair and reasonable and to the benefit of the Company, based, among other things, a benchmark study of compensation of comparable companies prepared by an external independent third party.
The proposed compensation policy shall be reviewed from time to time by the Compensation Committee and Board of Directors in order to ensure its adequacy and its fitness to the Company's financial position and results of operation.
It is proposed that the following resolution be adopted at the Meeting:
"RESOLVED, that the proposed compensation policy for the Company's directors and officers, in the form attached hereto as Annex A, having been approved by the Compensation Committee and Board of Directors be, and hereby is, approved and adopted." |
The Board of Directors recommends a vote FOR approval of this proposed resolution.
Proposal No. 4
APPROVAL OF THE GRANT OF COMPANY’S LETTER OF INDEMNIFICATION TO
MR. SHLOMO (TOM) WYLER, THE CHIEF EXECUTIVE OFFICER OF THE COMPANY’S
SUBSIDIARY, OPTIBASE INC. WHO IS AFFILIATED WITH THE CONTROLLING
SHAREHOLDER OF THE COMPANY
On November 2, 2005, the Company has undertaken towards Mr. Tom Wyler, the Chief Executive Officer of Optibase Inc., who served than as a member of the Board of Directors and was considered the controlling shareholder of the Company, to grant him a prospective indemnification, and with letter of indemnification accordingly. Such undertaking was originally approved by the Company's shareholders on November 2, 2005. Since then, such undertaking, including the letter of indemnification, was amended and approved several times by our shareholders, while the last shareholder approval was on December 21, 2017.
Under the Companies Law any extraordinary transaction (including compensation) with a controlling shareholder of a public company or with another person in which the controlling shareholder of a public company has a personal interest requires shareholder approval every three years, subject to certain exceptions. As the last shareholder approval for such letter of indemnification was in December 2017, it is proposed, for caution purposes only, to approve the grant of the same letter of indemnification for three years as of the date of the shareholder meeting. The letter of indemnification is attached as Exhibit 6.1 to the 2020 Annual Report.
Summary of the Audit Committee, Compensation Committee and the Board of Directors’ Reasons for the Approval of this Proposal
The letter of indemnification that will be granted to Mr. Shlomo (Tom) Wyler is identical to the letters of indemnification granted to all other directors and officers of the Company. The grant of such letter of indemnification is in compliance with the Company's existing compensation policy and the newly proposed compensation policy (see Proposal No. 3) and the grant of letter of indemnification is customary. The Audit Committee further approved that no competitive process is required in light of th nature of the transaction and the fact that the letter of indemnification granted to Mr. Wyler is identical to all other letters granted to the Company's directors and officers constitute "another process" within the meaning of such term in the Companies Law. The Audit Committee, Compensation Committee and the Board of Directors concluded the grant of the Company’s letter of indemnification to Mr. Shlomo (Tom) Wyler is to the benefit of the Company.
It is proposed that the following resolution be adopted at the Meeting:
“RESOLVED, to approve the grant of Company’s letter of indemnification to Mr. Shlomo (Tom) Wyler, the Chief Executive Officer of the Company’s subsidiary Optibase Inc. who is affiliated with the controlling shareholder of the Company, having been approved by the Audit Committee, Compensation Committee and Board of Directors, be, and same hereby is, approved.” |
The Board of Directors recommends a vote FOR approval of this proposed resolution.
Proposal No. 5
APPROVAL OF THE GRANT OF COMPANY’S LETTER OF INDEMNIFICATION TO
MR. REUWEN SCHWARZ, A MEMBER OF THE COMPANY’S BOARD OF DIRECTORS, WHO IS
AFFILIATED WITH THE CONTROLLING SHAREHOLDER OF THE COMPANY
On October 22, 2014, the Company has undertaken towards Mr. Reuwen Schwarz, a member of the Company’s Board of Directors, who is affiliated with the controlling shareholder of the Company, to grant him a prospective indemnification, and with letter of indemnification accordingly. such undertaking, including the letter of indemnification, was last amended and approved by our shareholders on December 21, 2017.
Under the Companies Law any extraordinary transaction (including compensation) with a controlling shareholder of a public company or with another person in which the controlling shareholder of a public company has a personal interest requires shareholder approval every three years, subject to certain exceptions. As the last shareholder approval for such letter of indemnification was in December 2017, it is proposed, for caution purposes only, to approve the grant of the same letter of indemnification for three years as of the date of the shareholder meeting. The letter of indemnification is attached as Exhibit 6.1 to the 2020 Annual Report.
The approval of this Proposal No. 5 is subject to the receipt of the requisite shareholders’ approval for the re-election of Mr. Schwarz to the Board of Directors.
Summary of the Audit Committee, Compensation Committee and the Board of Directors’ Reasons for the Approval of this Proposal
The letter of indemnification that will be granted to Mr. Reuwen Schwarz is identical to the letters of indemnification granted to all other directors and officers of the Company. The grant of such letter of indemnification is in compliance with the Company's existing compensation policy and the newly proposed compensation policy (see Proposal No. 3) and the grant of letter of indemnification is customary. The Audit Committee further approved that no competitive process is required in light of th nature of the transaction and the fact that the letter of indemnification granted to Mr. Schwarz is identical to all other letters granted to the Company's directors and officers constitute "another process" within the meaning of such term in the Companies Law. The Audit Committee, Compensation Committee and the Board of Directors concluded the grant of the Company’s letter of indemnification to Mr. Reuwen Schwarz is to the benefit of the Company.
It is proposed that the following resolution be adopted at the Meeting:
“RESOLVED, to approve the grant of Company’s letter of indemnification to Mr. Reuwen Schwarz, a member of the Board of Directors who is affiliated with the controlling shareholder of the Company, having been approved by the Audit Committee, Compensation Committee and Board of Directors, be, and same hereby is, approved.” |
The Board of Directors recommends a vote FOR approval of this proposed resolution.
Proposal No. 6
APPROVAL OF A BONUS GRANT TO THE COMPANY'S CHIEF EXECUTIVE OFFICER,
MR. PHILIPS
The Board of Directors, following the approval of the Compensation Committee approved on May 31, 2021 the grant of an annual bonus to Mr. Amir Philips, the Company’s Chief Executive Officer, in an amount equal to seven and a half (7.5) monthly base salaries for his performance and achievements in 2020.
Under the Companies Law a bonus for a chief executive officer is required to be made based on measurable criteria and only a non-material portion of which may be made upon discretion. A non-material portion is customarily interpreted as the higher of (i) three monthly base salaries; or (ii) 25% of the total variable compensation. In light of the fact that no measurable criteria were determined for the payment of bonuses to the Company's Chief Executive Officer for 2020, the Compensation Committee and Board of Directors approved the grant of an annual bonus to the CEO for the year 2020 equal to seven and a half (7.5) monthly base salaries, out of which an amount equal to 3 monthly base salaries was paid to Mr. Philips on a discretionary basis and the remaining four and half (4.5) monthly base salaries is brought for shareholder approval.
For details regarding the compensation terms of Mr. Philips as the Company’s Chief Executive Officer, see Item 6.B. of our 2020 Annual Report.
Summary of the Compensation Committee and Board of Directors’ Reasons for the Approval of the grant of a bonus to the Company's Chief Executive Officer
The Compensation Committee and Board of directors stated in their approval of the bonus grant to Mr. Philips that the grant of bonus is intended to compensate Mr. Philips for his continued services as the Company's Chief Executive Officer, his achievements, and his continued contribution to the Company's success, in particular the sale of the Company's portfolio of assets in Germany. The Compensation Committee and Board of Directors further noted that had measurable criteria were determined for Mr. Philips for 2020, the proposed bonus grant would have been in compliance with the existing compensation policy of the Company and the also the newly proposed compensation policy.
In light of all of the above, the Compensation Committee and the Board of Directors concluded that the proposed compensation is to the benefit of the Company.
It is proposed that the following resolution be adopted at the Meeting:
“RESOLVED, that the bonus grant to Mr. Amir Philips, the Company’s Chief Executive Officer, of four and a half (4.5) monthly base salaries for his achievements in 2020, having been approved by the Compensation Committee and the Board of Directors, and as presented to the shareholders, be, and the same hereby is, approved.” |
The Board of Directors recommends a vote FOR approval of this proposed resolution.
Proposal No. 7
APPROVAL OF A BONUS GRANT TO THE COMPANY'S CHIEF FINANCIAL OFFICER,
MS. YAKIR BEN-NAIM
The Board of Directors, following the approval of the Compensation Committee approved on May 31, 2021 the grant of an annual bonus to Ms. Yakir Ben-Naim, the Company’s Chief Financial Officer, in an amount equal to four (4) monthly base salaries for her performance and achievements in 2020.
Under the Companies Law a bonus for a Chief Financial Officer is required to be made based on measurable criteria and only a non-material portion of which may be made upon discretion. A non-material portion is customarily interpreted as the higher of (i) three monthly base salaries; or (ii) 25% of the total variable compensation. In light of the fact that no measurable criteria were determined for the payment of bonuses to the Company's Chief Executive Officer for 2020, the Compensation Committee and Board of Directors approved the grant of an annual bonus to the CFO for the year 2020 equal to four (4) monthly base salaries, out of which an amount equal to 3 monthly base salaries was paid to Ms. Ben-Naim on a discretionary basis and the remaining one (1) monthly base salaries is brought for shareholder approval
For details regarding the compensation terms of Ms. Ben-Naim as the Company’s Chief Financial Officer, see Item 6.B. of our 2020 Annual Report.
Summary of the Compensation Committee and Board of Directors’ Reasons for the Approval of the grant of a bonus to the Company's Chief Financial Officer
The Compensation Committee and Board of directors stated in their approval of the bonus grant to Ms. Ben-Naim that the grant of bonus is intended to compensate Ms. Ben-Naim for her continued services as the Company's Chief Financial Officer, her achievements, and her continued contribution to the Company's success. The Compensation Committee and Board of Directors further noted that had measurable criteria were determined for Ms. Ben-Naim for 2020, the proposed bonus grant would have been in compliance with the existing compensation policy of the Company and the also the newly proposed compensation policy.
In light of all of the above, the Compensation Committee and the Board of Directors concluded that the proposed compensation is to the benefit of the Company.
It is proposed that the following resolution be adopted at the Meeting:
“RESOLVED, that the bonus grant to Ms. Yakir Ben-Naim, the Company’s Chief Financial Officer, of one (1) monthly base salaries for her achievements in 2020, having been approved by the Compensation Committee and the Board of Directors, and as presented to the shareholders, be, and the same hereby is, approved.” |
The Board of Directors recommends a vote FOR approval of this proposed resolution.
Proposal No. 8
APPROVAL OF AN EXTENSION OF THE COMPANY'S ENGAGEMENT WITH
MR. SHLOMO (TOM) WYLER, WHO IS AFFILIATED WITH THE COMPANY'S CONTROLLING
SHAREHOLDER, AS THE CHIEF EXECUTIVE OFFICER OF OPTIBASE INC., THE
COMPANY'S SUBSIDIARY, FOR A THREE-YEAR TERM COMMENCING ON ON
JANUARY 1, 2022 AND ENDING ON DECEMBER 31, 2024
Following the approval by the Compensation Committee, the Audit Committee and the Board of Directors, it is proposed to approve an extension of the Company's engagement with Mr. Shlomo (Tom) Wyler, as Chief Executive Officer of Optibase Inc., the Company's subsidiary, for a three-year term commencing on January 1, 2022, and ending on December 31, 2025. Mr. Wyler is also affiliated with the Company's controlling shareholder.1
Mr. Wyler's compensation will remain the same and shall consist of an annual gross base salary of $220,000 for a full-time position as well as reimbursement of health insurance expenses of up to $24,000 per year, and reimbursement of reasonable work-related expenses incurred as part of his activities as Chief Executive Officer of Optibase Inc., of up to $50,000 per year.
Summary of the Compensation Committee, the Audit Committee and the Board of Directors' Reasons for the Approval of This Proposal
The Compensation Committee, the Audit Committee and the Board of Directors stated in their approval of this proposal that Mr. Wyler has served as CEO of Optibase Inc., since January 2014 and fulfilled his role to the full satisfaction of the members of the Committees and Board of Directors. Mr. Wyler has extensive knowledge of and vast experience in the U.S. real estate market which greatly contributed to the Company's business.
The members of the Audit Committee further acknowledged Mr. Wyler's rich experience, familiarity with the Company's business and long term and deep acquaintance with the Company's operations during his service in various senior roles at the Company and therefore, determined that no competitive process should be undertaken for the continued engagement of Mr. Wyler as Chief Executive Officer of Optibase Inc., and elected instead to receive an external analysis of the compensation paid in similar roles as detailed below.
The compensation terms of Mr. Wyler are fair and reasonable, taking into consideration, among other things, Mr. Wyler's skills, qualifications and experience as well as comparative compensation paid for similar positions in companies of similar size and type of the Company (based on an external analysis conducted by an independent consultant).
Mr. Wyler's compensation is in accordance with the Company's current compensation policy as well as the newly proposed compensation policy (see Proposal No. 3).
In light of all of the above, the Audit Committee, the Compensation Committee and Board of Directors concluded that the proposed compensation of Mr. Wyler is to the benefit of the Company.
It is proposed that the following resolution be adopted at the Meeting:
"RESOLVED, that the extension of the Company's engagement with Mr. Shlomo (Tom) Wyler, who is affiliated with the Company's controlling shareholder, as the Chief Executive Officer of Optibase Inc., the Company's subsidiary, for a three-year term commencing on on January 1, 2022 and ending on December 31, 2024, having been approved by the Audit Committee, the Compensation Committee and the Board of Directors, and as presented to the shareholders, be, and same hereby is, approved." |
The Board of Directors recommends a vote FOR approval of this proposed resolution.
| 1 | See note 3 to "Beneficial Ownership of Securities by Certain Beneficial Owners and Management" above. |
OTHER BUSINESS
Management knows of no other business to be acted upon at the Meeting. However, if any other business properly comes before the Meeting, the persons named in the enclosed proxy will vote upon such matters in accordance with their best judgment.
The prompt return of your proxy will be appreciated and helpful in obtaining the necessary vote. Therefore, whether or not you expect to attend the Meeting, please sign the form of proxy provided herewith and return it in the enclosed envelope, so that it is received by the Company not later than August 17, 2021 at 12:00 p.m. Israel time.
| By Order of the Board of Directors,
Alex hillman, Executive Chairman of the Board of Directors |
July 8, 2021
