Exhibit 1
CARMEL CONTAINER SYSTEMS LTD.
2 CHALAMISH STREET
CAESAREA INDUSTRIAL PARK, CAESAREA
ISRAEL 38900
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NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 11, 2003
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To Our Shareholders:
You are cordially invited to attend the Annual General Meeting of the
shareholders (the "Annual General Meeting") of Carmel Container Systems Ltd.
(the "Company") to be held at the Company's facilities located at 2 Chalamish
Street, Caesarea Industrial Park, Caesarea, Israel on November 11, 2003, at 2:00
P.M., local time, for the purpose of considering and acting upon the following
matters:
1. Election of Directors.
2. Election of External Director.
3. Approval of Directors' fees.
4. Approval of the appointment of Kost, Forer & Gabbay as
auditors of the Company for the year ending December 31, 2003 and for the period
until the next Annual General Meeting of the shareholders.
5. To receive and consider the Report of Directors, the
Financial Statements of the Company and the Auditors' Report in respect thereof
for the year ended December 31, 2002.
6. Such other business as may properly come before the
Annual General Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on September
30, 2003 as the record date for the determination of shareholders entitled to
receive notice of, and to vote at, the Annual General Meeting.
You are cordially invited to attend the Annual General Meeting.
Whether or not you plan to attend the Annual General Meeting, you are urged to
promptly complete, date and sign the enclosed proxy and to mail it in the
enclosed envelope, which requires no postage if mailed in the United States.
Return of your proxy does not deprive you of your right to attend the Annual
General Meeting and to vote your shares in person.
Pursuant to the Articles of Association of the Company, a proxy will
be effective only if it is received by the Company at least 48 hours prior to
the time of the Annual General Meeting.
By Order of the Board of Directors
ROBERT K. KRAFT
Chairman of the Board of Directors
Caesarea, Israel
September 30, 2003
CARMEL CONTAINER SYSTEMS LTD.
2 CHALAMISH STREET
CAESAREA INDUSTRIAL PARK, CAESAREA
ISRAEL 38900
PROXY STATEMENT
ANNUAL GENERAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished to shareholders in connection with
the solicitation by the Board of Directors of Carmel Container Systems Ltd. (the
"Company") of proxies to be voted at the Annual General Meeting of the
shareholders of the Company to be held on November 11, 2003 at 2:00 P.M., local
time, at the Company's facilities located at 2 Chalamish Street, Caesarea
Industrial Park, Caesarea, Israel and at any adjournment or postponement
thereof. The Notice of Annual General Meeting of Shareholders accompanies this
Proxy Statement. This Proxy Statement and the proxies solicited hereby are first
being sent or delivered to the shareholders on or about October 3, 2002.
SOLICITATION OF PROXIES
If a proxy in the enclosed form is duly executed and returned, the
Company's Ordinary Shares, par value New Israeli Shekels ("NIS") 1.00 per share
(the "Ordinary Shares"), represented thereby will be voted. If specification is
made by the shareholder on the form of proxy, the Ordinary Shares represented
thereby will be voted in accordance with such specification. If no specification
is made, the persons named in the accompanying proxy will vote the Ordinary
Shares represented thereby for the election as Directors of the nominees named
herein, for the approval of the Directors' fees as set forth herein and for the
approval of the appointment of the firm of Kost, Forer & Gabbay as auditors of
the Company for the year ending December 31, 2003 and for the period until the
next Annual General Meeting of the shareholders.
Any shareholder may revoke his proxy by delivering a subsequently
dated proxy or by giving written notice of revocation to the Secretary of the
Company at any time before such proxy is voted or by voting in person at the
Annual General Meeting. However, if the shareholder attends the Annual General
Meeting and does not elect to vote in person, his proxy will not be revoked.
Pursuant to the provisions of the Articles of Association of the
Company, a proxy will be effective only if it is received by the Company at
least 48 hours prior to the time of the Annual General Meeting.
The Board of Directors does not know of any matter, other than those
set forth herein, that is expected to be presented for consideration at the
Annual General Meeting. However, if other matters properly come before the
Annual General Meeting, the persons named in the accompanying proxy intend to
vote thereon in accordance with their best judgment.
The Company will bear the cost of soliciting proxies. Solicitation of
proxies will be primarily by mail, but proxies may also be solicited by
Directors, officers and regular employees of the Company (who will not be
specifically compensated for such services), by telephone or otherwise.
Brokerage houses and other custodians, nominees and fiduciaries which forward
proxies and proxy materials to beneficial owners of Ordinary Shares will be
reimbursed for their expenses by the Company.
RECORD DATE; OUTSTANDING VOTING SECURITIES; VOTING RIGHTS
Only shareholders of record at the close of business on September 30,
2003 will be entitled to receive notice of, and vote at, the Annual General
Meeting and any adjournments or postponements thereof. As of September 30, 2003,
there were 2,400,187 Ordinary Shares outstanding and eligible to vote at the
Annual General Meeting. At the Annual General Meeting, each shareholder of
record will be entitled to one vote for each Ordinary Share held by him in
respect of each matter to be voted upon.
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The presence, in person or by proxy, of two persons entitled to vote
upon the business to be transacted in the Annual General Meeting, each being a
shareholder, a proxy for a shareholder or a representative of a corporation,
holding together more than 50% of the outstanding Ordinary Shares, is necessary
to constitute a quorum at the Annual General Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of September
30, 2003, pertaining to the beneficial ownership of the Company's Ordinary
Shares by (i) persons known to the Company to own beneficially five percent or
more of the Ordinary Shares, (ii) each Director, and (iii) all Directors and
executive officers of the Company as a group.
The information contained herein has been obtained from the Company's
records, or from information furnished directly by the individual or entity to
the Company.
Percent
Name and Address of Number of Ordinary of Ordinary
Beneficial Owner(1) Shares Owned Shares *
------------------- ------------ --------
Tri-Wall Containers (Israel) Ltd........................... 119,813 (2)
Kraft Group LLC............................................ 275,000 (4) 11.46%
American-Israeli Paper Mills Ltd........................... 630,000 26.25%
Ampal American-Israel Corporation.......................... 522,000 21.75%
Richard A. Karelitz........................................ 11,550 (3)
Robert K. Kraft............................................ 851,174 (5) 35.46%
Richard P. Morse........................................... 26,250 (6) 1.09%
Myra H. Kraft.............................................. 2,100 (7) (3)
Jonathan A. Kraft.......................................... 6,562 (8) (3)
Yaakov Yerushalmi.......................................... -- --
Irit Eluz.................................................. -- --
Israel Eldar............................................... -- --
Avshalom Patir............................................. -- --
Yoram Firon................................................ -- --
David Herman............................................... -- --
- ---------------------------------------------------------------
All Directors and executive officers as a group............ 863,974 (9) 36.00%
* In calculating this percentage , only outstanding shares with voting
rights were considered. Tri-Wall's 119,813 non-voting shares were not
considered.
(1) The address of Tri-Wall Containers (Israel) Ltd. ("Tri-Wall") is 72
Fifth of Iyar St., Tel-Aviv, Israel. The address of each of Kraft
Group LLC ("Kraft Group"), Robert K. Kraft, Richard A. Karelitz, Myra
H. Kraft and Jonathan A. Kraft is c/o International Forest Products
Corporation, One Patriot Place, Foxborough, MA 02035. The address of
Richard P. Morse is 240 Lee Street, Brookline, MA 02146. The address
of each of American-Israeli Paper Mills Ltd. ("AIPM"), Yaakov
Yerushalmi, Israel Eldar and Avshalom Patir is P.O. Box 142, Hadera,
Israel. The address of each of Ampal American-Israel Corporation
("AMPAL"), Irit Eluz and Yoram Firon is 111 Arlozorov St., Tel-Aviv,
Israel. The address of David Herman is 53 Shmaryahu Levin St.,
Jerusalem 96664, Israel.
(2) 109,400 of these Ordinary Shares were purchased by Tri-Wall in
October 2000. 157 of these Ordinary Shares are beneficially owned by
the Company's employees and voted by Tri-Wall Containers (Israel)
Ltd., a wholly-owned subsidiary of the Company, pursuant to the
Company's 1986 Stock Purchase Plan, as revised by the Board of
Directors on November 10, 1992. See "Executive Compensation--1986
Stock Purchase Plan" below.
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(3) Less than one percent.
(4) Excludes 470,324 Ordinary Shares beneficially owned by Robert K.
Kraft, the President of the managing member and an indirect holder of
membership interests of Kraft Group; 26,250 Ordinary Shares
beneficially owned by Richard P. Morse (a Director of the Company),
25,000 of which Mr. Kraft has the right to vote pursuant to an
agreement between Mr. Morse and Mr. Kraft; 52,500 Ordinary Shares
beneficially owned by the Robert & Myra Kraft & J Hiatt Foundation
Inc. (of which Mr. Kraft is a Trustee with shared investment and
voting authority); 2,100 Ordinary Shares beneficially owned by Myra
H. Kraft (Mr. Kraft's wife), an indirect holder of membership
interests of Kraft Group; and 26,250 Ordinary Shares beneficially
owned by the Kraft Irrevocable Family Trust (6,562 shares of which
are owned for the benefit of Jonathan A. Kraft (Mr. & Mrs. Kraft's
son), an indirect holder of membership interests of Kraft Group). See
footnotes (5), (7), and (8) below.
(5) Includes 26,250 Ordinary Shares beneficially owned by Richard P.
Morse (a Director of the Company), 25,000 of which Robert K. Kraft
has the right to vote pursuant to an agreement between Mr. Morse and
Mr. Kraft, and 52,500 Ordinary Shares beneficially owned by the
Robert & Myra Kraft & J Hiatt Foundation Inc. (of which Mr. Kraft is
a Trustee with shared investment and voting authority). Also includes
2,100 Ordinary Shares beneficially owned by Myra H. Kraft (Mr.
Kraft's wife), and 26,250 Ordinary Shares beneficially owned by the
Kraft Irrevocable Family Trust (with respect to which Mr. Kraft
disclaims beneficial interest). Includes 275,000 Ordinary Shares
owned by Kraft Group (of which Mr. Kraft is the President of the
managing member and an indirect holder of membership interests; and
Myra H. Kraft and Jonathan A. Kraft are indirect holders of
membership interests). See footnote (4) above.
(6) Richard P. Morse has granted Robert K. Kraft the right to vote 25,000
of these shares. Excludes 26,250 Ordinary Shares beneficially owned
by the Kraft Irrevocable Family Trust, of which Mr. Morse is a
Trustee, but with respect to which Mr. Morse disclaims beneficial
interest. See footnote (5) above.
(7) Excludes 470,324 Ordinary Shares beneficially owned by Robert K.
Kraft (Myra H. Kraft's husband); 26,250 Ordinary Shares beneficially
owned by the Kraft Irrevocable Family Trust (with respect to which
Mrs. Kraft disclaims beneficial interest); 52,500 Ordinary Shares
beneficially owned by the Robert & Myra Kraft & J Hiatt Foundation
Inc. (of which Mrs. Kraft is a Trustee with shared investment and
voting authority); and 275,000 Ordinary Shares owned by Kraft Group
(of which Mrs. Kraft is an indirect holder of membership interests).
See footnotes (4) and (5) above.
(8) Includes 6,562 of the 26,250 Ordinary Shares beneficially owned by
the Kraft Irrevocable Family Trust, as to which portion Jonathan A.
Kraft is the beneficiary. Excludes 275,000 Ordinary Shares owned by
Kraft Group (of which Jonathan A. Kraft is an indirect holder of
membership interests); 470,324 Ordinary Shares beneficially owned by
Robert K. Kraft (Jonathan A. Kraft's father); and 2,100 Ordinary
Shares beneficially owned by Myra H. Kraft (Jonathan A. Kraft's
mother). See footnotes (4), (5) and (7) above.
(9) Includes 26,250 Ordinary Shares beneficially owned by Richard P.
Morse (25,000 of which Robert K. Kraft has the right to vote pursuant
to an agreement between Mr. Morse and Mr. Kraft), 52,500 Ordinary
Shares beneficially owned by the Robert & Myra Kraft & J Hiatt
Foundation Inc. (of which Mr. Kraft and Myra H. Kraft are Trustees
with shared investment and voting authority) and 26,250 Ordinary
Shares beneficially owned by the Kraft Irrevocable Family Trust (of
which Mr. Morse is a Trustee, but with respect to which Mr. Kraft,
Mrs. Kraft and Mr. Morse disclaim beneficial interest, and as to
6,562 Ordinary Shares of which Jonathan A. Kraft is the beneficiary),
2,100 Ordinary Shares beneficially owned by Mrs. Kraft, 470,324
Ordinary Shares beneficially owned by Mr. Kraft, 11,550 Ordinary
Shares beneficially owned by Mr. Karelitz and 275,000 Ordinary Shares
owned by Kraft Group (of which Mr. Kraft is the President of the
managing member and an indirect holder of membership interests; and
Myra H. Kraft and Jonathan A. Kraft are indirect holders of
membership interests). See footnote (4) above.
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ELECTION OF DIRECTORS
The Company's Board of Directors (the "Board") has nominated ten
persons to be elected at the Annual General Meeting to serve as directors of the
Company until the next Annual General Meeting and until their respective
successors shall have been elected and shall have qualified. Ten Director
nominees currently serve as directors of the Company. It is the intention of the
persons named in the proxy to vote for the election of the persons named below.
If any nominee is unable or unwilling to serve (which the Board does not
anticipate), the persons named in the proxy will vote for another person in
accordance with their judgment.
The External Directors of the Company were nominated for a period of
three years ending on July 29, 2003. In its meeting on August 5, 2003, the
Company's Board appointed the External Directors to serve in such capacity, for
a three year period ending July 29, 2006, until the election by the Annual
General Meeting. On September 11, 2003, Zeev Birenboim resigned as an Executive
Director of the Company. The Board nominated David Herman as External Director
to serve for a three year period ending July 29, 2006. The Board recommends Mr.
Kalach shall serve as an External Director for a three years period ending
November 11, 2006. It is the intention of the persons named in the proxy to vote
for the election of the persons named below. If any nominee is unable or
unwilling to serve (which the Board does not anticipate), the persons named in
the proxy will vote for another person in accordance with their judgment.
The following information is supplied with respect to each person
nominated and recommended to be elected by the Board and is based upon the
records of the Company and information furnished to it by the nominees.
Reference is made to "Security Ownership of Certain Beneficial Owners and
Management" for information pertaining to stock ownership by the nominees.
NAME AGE POSITION WITH COMPANY
- ---- --- ---------------------
Robert K. Kraft............. 62 Chairman of the Board, Director
Yaakov Yerushalmi........... 61 Vice Chairman of the Board,
Chairman of the Management
and Finance Committee, Director
Richard A. Karelitz......... 53 Chairman of the Audit Committee,
Director
Myra H. Kraft............... 59 Director
Jonathan A. Kraft........... 38 Director
Irit Eluz................... 36 Director
Richard P. Morse............ 71 Director
Yoram Firon................. 34 Director
Israel Eldar................ 57 Director
Avshalom Patir.............. 55 Director
David Herman................ 58 External Director
Menachem Kalach............. 60 Nominee (External Director)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL THE
ABOVE NOMINEES.
ROBERT K. KRAFT has served as Chairman of the Board of Directors of
our Company since March 1989 and a director since October 1988. For more than
the past twenty-five years, Mr. Kraft has been the Chairman of International
Forest Products Corporation, a company engaged in marketing and trading paper
and related products and a supplier of raw materials, including to the Company.
Mr. Kraft is also the President of Rand-Whitney Group LLC, a company engaged in
the cardboard and packaging field and a shareholder of the Company; Chairman of
Chestnut Hill Management Corp., an investment management company; President and
Chief Executive Officer of the New England Patriots, a football team in the
National Football League; and President and Chief Executive Officer of NPS LLC,
which owns and operates Gillette Stadium in Foxborough, Massachusetts. He is
also a director of Kraft Soccer LLC and Kraft Holdings Trust. Mr. Kraft is the
husband of Myra H. Kraft and the father of Jonathan A. Kraft.
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YAAKOV YERUSHALMI has served as a director of our Company since
August 1992 and Executive Vice Chairman of the Board of Directors and Chairman
of the Management and Finance Committee since September 1992. Mr. Yerushalmi has
served as Chairman of the Board of American-Israeli Paper Mills Ltd. ("AIPM")
AIPM since January 1999 and as General Manager of AIPM since June 1990 to March
2003. Mr. Yerushalmi currently serves as Chairman of the Amnir Recycling
Industries Ltd., as well as chairman or director of several subsidiaries of
affiliates of AIPM.
RICHARD A. KARELITZ has served as a director of our Company since
October 1988. He has been employed in various capacities with International
Forest Products Corporation since 1975 and presently is its Senior Vice
President. Mr. Karelitz is also Treasurer of Chestnut Hill Management Corp., an
investment management company, and General Counsel to the New England Patriots,
a football team in the National Football League, the New England Revolution, a
soccer team in Major League Soccer, and NPS LLC, which owns and operates Gillete
Stadium in Foxborough, Massachusetts. Mr. Karelitz is a director of IFP Products
(UK) Limited, International Forest Products (H.K.) Limited, IFP Corporate
Services SDN, BDH and International Forest Products Limited.
MYRA H. KRAFT has served as a director of our Company since August
1992. Mrs. Kraft is a Director of International Forest Products Corporation and
is an indirect holder of membership interests of Kraft Group. Mrs. Kraft is
Robert K. Kraft's wife and the mother of Jonathan A. Kraft.
JONATHAN A. KRAFT has served as a director of our Company since
August 1992. Mr. Kraft is a Director of International Forest Products
Corporation, Rand-Whitney Group LLC, Kraft Holdings Trust and CMGI, Inc. Mr.
Kraft is also President and Chief Executive Officer of Rand-Whitney
Containerboard, Vice Chairman and Owners Representative of the New England
Patriots, a football team in the National Football League, investor/operator of
the New England Revolution, a soccer team in Major League Soccer, and Vice
President of NPS LLC, which owns and operates Gillette Stadium in Foxborough,
Massachusetts. Mr. Kraft is the son of Robert K. Kraft and Myra H. Kraft.
RICHARD P. MORSE has served as a director of our Company since
October 1988. Mr. Morse is a private investor who was formerly a Vice President
and Director of Morse Shoe, Inc.
AVSHALOM PATIR has served as a director of our Company since April
2003. Mr. Patir has served as the General Manager of AIPM since April 2003. From
1998 to April 2003 Mr. Patir served as General Manager of Barak I.T.C (1995) -
The International Telecommunications Services Corp. Ltd. Mr. Patir holds a
Masters degree in Electrical Engineering. Mr. Patir also serves as a director of
several subsidiaries or affiliates of AIPM.
ISRAEL ELDAR has served as a director of our Company since August
2000. Mr. Eldar has served as the comptroller in AIPM Ltd. since 1985. He also
serves on the board of directors of several subsidiaries or affiliates of AIPM.
IRIT ELUZ has served as a director of our Company since November
2002. Ms. Eluz serves as the Chief Financial Officer, Vice President - Finance
and Treasurer of Ampal American-Israel Corporation and its subsidiaries. Prior
to that position, Ms. Eluz served as an Associate Chief Financial Officer of
Merhav M.M.F. Ltd. and as Chief Financial Officer of Kamor Ltd. Ms. Eluz also
serves as a Director of Ampal Development Ltd.
YORAM FIRON has served as a director of our Company since November
2002. Mr. Firon serves as Secretary and Vice President - Investments and
Corporate Affairs of Ampal American-Israel Corporation and its subsidiaries.
Prior to this position, Mr. Firon served as the Vice President of Merhav M.M.F.
Ltd. and was a partner in the law firm of Firon Karni Sarov & Firon.
EXTERNAL DIRECTORS
On July 30, 2000, Messrs. Zeev Birenboim and David Herman were
appointed External Directors of the Company. The appointment of Messrs.
Birenboim and Herman was ratified by resolution of an extra ordinary
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shareholder's meeting, in accordance with the laws of the State of Israel.
Unlike other members of the Board of Directors, the External Directors are not
re-elected at each Annual General Meeting of the Shareholders of the Company.
Pursuant to Israeli law, the External Directors were appointed for a three-year
term, which ended July 29, 2003. Israeli law permits the Company to re-appoint
the External Directors to one additional term of three years. In August 2003,
the Board appointed the External Directors to continue serving in such capacity
until the Annual General Meeting. However, on September 11, 2003, Zeev Birenboim
resigned as an External Director of the Company. Therefore, the Board nominated
Mr. David Herman to serve as External Director for a three year term beginning
July 29, 2003 and ending on July 29, 2006. The Board recommends that Mr. Kalach
shall serve as an External Director for a three years period beginning November
11, 2003 and ending November 11, 2006.
DAVID HERMAN holds an M.A. and a PhD from Harvard University. Mr.
Herman served as Chief Executive Officer of TeachLink Ltd. and as a professor at
Colombia University.
MENACHEM KALACH has served as chairman of the board of Royal Plaza
Hotel in Tiberias, Israel, and as chairman of the board of Food Club Group since
1999. Mr. Kalech is a director of Mitzpe Kineret Ltd., and Kineret (1995) Ltd.
since 1999., From 1994 to 1998 Mr. Kalech served as general manager of Mitzpe
Kineret Ltd. and served as chairman or director of several companies in the real
estate, retail and marketing fields in Israel.
BOARD MEETINGS AND COMMITTEES
During 2002, the Board of Directors held five meetings and the Audit
Committee held four meetings.
The following matters require the affirmative vote of not less than
80% of the Directors (or, if by written consent of the Directors without a
meeting, 100% of the Directors): (i) any sale or disposition of any fixed
assets, subsidiaries or investments of the Company having value in excess of
$500,000; (ii) the issuance of Ordinary Shares of the Company (which shall
require a majority vote of 85%); (iii) any capital expenditures in excess of
$500,000; (iv) the incurrence of indebtedness or the granting of a guarantee in
an amount exceeding $500,000 and the granting of any security in connection
therewith; (v) making loans to or investments in any third party in excess of
$500,000; (vi) curtailing or closing down material portions of the Company's
business, expanding into material new lines of business, making material
acquisitions or entering into other new ventures if substantially different from
the Company's existing business; (vii) any transaction between the Company and
any interested party or its affiliates; (viii) any decision regarding dividends
(which shall require a majority vote of 85%); or (ix) changing the nature of the
Company's business (which shall require a majority vote of 85%).
Pursuant to the Articles of Association, the Board of Directors has
established a Management and Finance Committee and an Audit Committee. The
Management and Finance Committee is currently comprised of four (4) members and
the Audit Committee is comprised of five (5) members..
The functions of the Management and Finance Committee are (i) to
control the routine operations and the financial matters of the Company; (ii) to
determine terms of employment for executives of the Company and its
subsidiaries; and (iii) as delegated by the Board of Directors from time to
time. Between meetings of the Board of Directors, the Committee may exercise all
powers of the Board of Directors. The Management and Finance Committee presently
consists of Yaakov Yerushalmi (Chairman), Robert K. Kraft, and Yoram Firon..
The functions of the Audit Committee are (i) to review the Company's
financial position, in cooperation with its auditor, on the basis of the
financial statements and related documents and facts; (ii) to discuss matters of
the Company's internal control, in consultation with the Company's internal
controller; (iii) to identify failings in the Company's business management and
to propose to the Board ways of correcting them; and (iv) as required by the
Israeli Companies Ordinance (New Version), 1983, and as delegated by the Board
from time to time. The Audit Committee presently consists of Richard A. Karelitz
(Chairman), Israel Eldar, Iris Iluz, and David Herman. Menachem Kalach shall
replace Zeev Birenboim as a member of the Audit Committee.
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SHAREHOLDERS' AGREEMENT
On May 14, 1992, Robert K. Kraft entered into an agreement with AIPM
and AMPAL (the "Shareholders' Agreement"), pursuant to which, on July 31, 1992,
AIPM purchased 630,000 Ordinary Shares and AMPAL purchased 504,000 Ordinary
Shares from Robert K. Kraft. The Shareholders' Agreement provides that the Board
shall be comprised of twelve (12) Directors, of whom five (5) are to be
recommended by Mr. Kraft, three (3) by AIPM, two (2) by AMPAL and two (2)
External Directors, in accordance with the requirements of the Companies Law
5759-1999. In addition, the Shareholders' Agreement provides that the members of
the Management and Finance Committee and the Audit Committee will be selected as
follows: one member recommended by each of Robert K. Kraft, AMPAL and AIPM, with
the remaining member being an External Director.
Pursuant to the Shareholders' Agreement, Mr. Kraft, AIPM and AMPAL
have agreed to co-operate with respect to certain issues (mergers, amendments to
the Company's Memorandum of Association and Articles of Association, dissolution
and liquidation of and changes in the capital structure of the Company and
payment of dividends, among others) which may be voted on at shareholders'
meetings.
Mr. Kraft, AIPM and AMPAL have also granted each other certain rights
of first refusal with respect to their Ordinary Shares.
EXECUTIVE COMPENSATION
The aggregate compensation paid to or accrued for the account of all
directors and executive officers as a group during the 2002 fiscal year was NIS
2,658,000 ($561,000) of which NIS 670,000 ($141,000) was paid to or accrued for
the account of Mr. Doron Kempler, the General Manager of the Company. This
amount includes directors' fees, officers' compensation, amounts set aside or
accrued to provide pension, retirement or similar benefits, amounts expended by
the Company for automobiles made available to its officers and expenses
(including business travel and professional and business association dues and
expenses) for which Directors were reimbursed.
1986 STOCK PURCHASE PLAN
Pursuant to the Company's 1986 Stock Purchase Plan (the "Plan"),
37,500 Ordinary Shares were sold by Carmel Plaro Holdings Limited ("CPH") (a
former affiliate of the Company) in October and November, 1986 to the Company's
employees and Directors at a purchase price of $6.90 per share. In October,
1987, the Company distributed 1,875 Ordinary Shares as bonus shares, with
respect to the Ordinary Shares held pursuant to the Plan. Since that time, there
have been no additional sales or distributions of Ordinary Shares under the
Plan.
The Plan provides that as long as the Ordinary Shares sold under the
Plan are owned by an employee or Director, such shares will be voted by CPH. In
addition, CPH will have a right of first refusal to purchase any Ordinary Shares
subject to the Plan proposed to be sold by an employee or Director and will have
a right and obligation to purchase such shares in the event of the death or
disability of an employee or Director. Upon the termination of an employee's
employment (other than by retirement) or the termination of a Director's service
as such, such employee or Director is obligated to offer to CPH all the shares
he purchased under the Plan. The purchase price in all cases will be the market
price, as defined in the Plan, of the Company's Ordinary Shares.
The Plan further provides that it will be administered by the Board,
which may amend or void the Plan, as it sees fit. On November 10, 1992, the
Board of Directors decided to revise the Plan as follows:
(a) The Plan was voided with respect to 35,512 Ordinary Shares
purchased by CPH pursuant to the exercise of its right of first
refusal in accordance with the Plan.
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(b) With respect to the remaining 3,863 Ordinary Shares held by CPH
in trust pursuant to a trust agreement (the "Trust Agreement") and
beneficially owned by employees and Directors (the "Employees'
Shares"), the Plan and Trust Agreement were revised as follows:
(i) Tri-Wall Containers (Israel) Ltd., a wholly owned
subsidiary of the Company, was appointed trustee (the
"Trustee") in place of CPH.
(ii) The Employees' Shares will no longer be eligible for
resale to employees and directors.
(c) The Company and the Trustee signed a new trust agreement, which
is identical to the original Trust Agreement in all respects except
as set forth above.
Since November 10, 1992, the Trustee purchased 3,486 Employees'
Shares pursuant to its right of first refusal. Accordingly, on the date hereof,
there are only 157 Employees' Shares outstanding.
1996 STOCK OPTION PLAN
On August 12, 1996, the Board of Directors of the Company approved
the adoption of a stock option plan (the "Stock Option Plan"), pursuant to which
up to 100,000 options (exercisable into 100,000 Ordinary Shares) may be granted
between November 1996 through November 2002 to key employees of the Company and
its subsidiaries selected by a committee appointed by the Board. The options are
to be held by Moshe Balter, as trustee, and are not transferable for a period of
two years following the date of grant. Options vest over a two-year period and
are exercisable for a three-year period thereafter. The minimum exercise price
shall be an amount in NIS equal to $8.50 per share. The Stock Option Plan was
established in accordance with Section 102 of the Israeli Income Tax Ordinance.
The total number of shares reserved for issuance under the Stock Option Plan
constitutes approximately 4% of the outstanding shares of the Company. The Stock
Option Plan expired on November 27, 2002.
CERTAIN TRANSACTIONS
In the ordinary course of its business, in 2000, 2001 and 2002 the
Company purchased all of its supply of Israeli produced paper ( 41%, 47% and
53%, respectively, of the Company's overall paper requirements) from AIPM, a
principal shareholder of the Company. The Company believes that such
transactions have been on terms no less favorable than could have been obtained
from unrelated third parties.
In October 1988, the Company entered into a ten year agreement with
International Forest Products Corporation ("IFPC"), an affiliate of Mr. Kraft
and the Rand-Whitney Group, Inc. ("Rand-Whitney"), pursuant to which IFPC
undertook to cause Rand-Whitney to provide technical and marketing know-how and
assistance to the Company. This agreement was approved at a time when no members
of the Board of Directors were affiliated with IFPC or Rand-Whitney. The
material terms of the agreement, as they relate to IFPC's and Rand-Whitney's
rights and obligations vis-a-vis the Company, are as follows: The Company is
entitled to call upon the technical and marketing expertise of Rand-Whitney for
advice and assistance, by telephone, telex or in person, as necessary from time
to time as determined by the Company. The assistance is to be provided on the
most favorable terms possible, and the compensation for such assistance is to be
limited to reimbursement for out-of-pocket costs and expenses incurred by
Rand-Whitney. As part of such agreement, IFPC agreed to supply up to 80% of the
Company's imported paper and forest products requirements, pursuant to a
ten-year right of first refusal, in the ordinary course of the Company's
business and on a competitive basis.
On March 9, 1998, the Company and IFPC agreed to extend the initial
period of such supply agreement for an additional ten years through October
2008. This extension was duly approved by the Company's Audit Committee and
Board of Directors in March 1998.
During each of 2000, 2001 and 2002, the Company purchased 38%, 47%
and 49%, respectively, of the Company's imported paper supply (in terms of cost)
from IFPC. The Company intends to make future purchases from IFPC on a
competitive basis, in the Company's best interests.
8
APPROVAL OF DIRECTORS' FEES
Under applicable Israeli law, shareholders must approve the payment
of compensation and fees to directors of the Company. Accordingly, at the Annual
General Meeting, shareholders will be asked to approve the following for 2004:
1. Each of the External Directors will receive an annual fee
in NIS equivalent to $5,000.
2. Each of the External Directors will receive, in addition
to such annual fee, a fee in NIS equivalent to $300 for
each meeting of the Board or any committee thereof which
he attends during 2004.
3. Each of the Directors will be reimbursed for expenses
incurred in connection with meetings of the Board or any
committee thereof which he attends.
4. The Board will be authorized to increase the fee payable
to the External Directors, if required to do so in
accordance with the minimum fee requirements prescribed by
Israeli law.
THE BOARD RECOMMENDS A VOTE FOR THE APPROVAL OF THE DIRECTORS' FEES
AS SET FORTH ABOVE.
APPROVAL OF APPOINTMENT OF AUDITORS
Shareholders will be asked to approve the appointment of Kost, Forer
& Gabbay as auditors of the Company for the year ending December 31, 2003 and
for the period until the next Annual General Meeting of Shareholders. A
representative of Kost, Forer & Gabbay is expected to be present at the Annual
General Meeting and will be given an opportunity to make a statement if he
desires to do so and to respond to appropriate questions. Kost, Forer & Gabbay
were the auditors for the Company for the year ended December 31, 2002.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPOINTMENT OF KOST,
FORER & GABBAY AS THE COMPANY'S AUDITORS.
REVIEW OF THE REPORT OF DIRECTORS,
FINANCIAL STATEMENTS AND AUDITORS' REPORT
The Report of Directors for the year ended December 31, 2002 and the
audited consolidated Financial Statements of the Company and the Auditors'
Report in respect thereof for the year ended December 31, 2002 are presented in
the Company's Periodical Report for 2002 which will be mailed without charge to
any shareholder entitled to vote at the Annual General Meeting, upon written
request to: Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York,
10153-0119, Attention: Ram Burshtine. In accordance with applicable Israeli law,
at the Annual General Meeting, the directors will review the Report of
Directors, the Financial Statements and the Auditors' Report in respect thereof,
and will answer appropriate questions relating thereto.
THE COMPANY'S ANNUAL REPORT ON FORM 20-F FOR THE YEAR ENDED DECEMBER
31, 2002, WHICH WAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE
MAILED EXCLUSIVE OF EXHIBITS, WITHOUT CHARGE TO ANY SHAREHOLDER ENTITLED TO VOTE
AT THE ANNUAL GENERAL MEETING, UPON WRITTEN REQUEST TO: CARMEL CONTAINER SYSTEMS
LTD., 2 CHALAMISH STREET, CAESAREA INDUSTRIAL PARK, CAESAREA 38900, ISRAEL,
ATTENTION: DANIEL ATTIAS, CHIEF FINANCIAL OFFICER.
9
OTHER MATTERS
The Board knows of no matters that are to be brought before the
Annual General Meeting other than as set forth in the Notice of Annual General
Meeting. If any other matter properly comes before the Annual General Meeting,
the persons named in the enclosed form of proxy or their substitutes will vote
in accordance with their best judgment on such matter.
By Order of the Board of Directors
ROBERT K. KRAFT
Chairman of the Board of Directors
Dated: September 30, 2003
10
ANNUAL GENERAL MEETING OF SHAREHOLDERS OF
CARMEL CONTAINER SYSTEMS LTD.
NOVEMBER 11, 2003
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PROOF #3
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Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
| |
V Please detach along perforated line and mail in the envelope provided. V
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS
AND "FOR" PROPOSALS 2, 3 AND 4. PLEASE SIGN, DATE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE [X]
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FOR AGAINST ABSTAIN
1. Election of Directors and External Directors: 2. Election of David Herman and Menachem Kalach as
External Directors
[ ] [ ] [ ]
[ ] FOR ALL NOMINEES NOMINEES: 3. Approval of Directors' fees
( ) Robert K. Kraft
[ ] WITHHOLD AUTHORITY ( ) Yaakov Yerushalmi
FOR ALL NOMINEES ( ) Richard A. Karelitz [ ] [ ] [ ]
( ) Myra H. Kraft
[ ] FOR ALL EXCEPT ( ) Jonathan A. Kraft 4. Appointment of Kost, Forer & Gabbay as auditors.
(See instructions below) ( ) Irit Eluz
( ) Richard P. Morse [ ] [ ] [ ]
( ) Yoram Firon
( ) Israel Eldar
( ) Avshalom Patir
THE SHARES REPRESENTED BY THIS PROXY, WHEN PROPERLY
EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO
DIRECTION IS MADE, THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED FOR THE ADOPTION OF THE
PROPOSED RESOLUTIONS. THE PROXY IS AUTHORIZED IN
HIS DISCRETION TO VOTE UPON SUCH OTHER BUSINESS AS
MAY PROPERLY COME BEFORE THE ANNUAL GENERAL
MEETING, OR ANY POSTPONEMENTS OR ADJOURNMENTS
THEREOF.
INSTRUCTION: To withhold authority to vote for any individual nominee(s), THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE PROXY
mark "FOR ALL EXCEPT" and fill in the circle next to each STATEMENT OF CARMEL CONTAINER SYSTEMS LTD.
nominee you wish to withhold, as shown here (X)
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PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
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To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that changes
to the registered name(s) on the account may not be submitted via this method. [ ]
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Signature of Date: Signature of Date:
Shareholder Shareholder
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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.