Exhibit 99.1
ELSCINT LIMITED
13 Mozes Street
Tel-Aviv 67442, Israel
Tel: (972-3) 608-6001
Dear Shareholder,
You are cordially invited to attend the Annual General Meeting of
Shareholders of Elscint Limited (the "Company") to be held at 11:00 a.m., Israel
time, on Wednesday, March 23, 2005, at the Company's offices at 13 Mozes Street,
Tel-Aviv 67442, Israel.
The purposes of the meeting are 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 1
through 3 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
48 hours before the meeting.
Thank you for your continued cooperation.
Very truly yours,
Abraham (Rami) Goren
Executive Chairman of the Board of Directors
Tel-Aviv, Israel
February 24, 2005
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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.
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ELSCINT LIMITED
13 Mozes Street
Tel-Aviv 67442, Israel
Tel: (972-3) 608-6001
NOTICE OF ANNUAL GENERAL MEETING
OF SHAREHOLDERS
Notice is hereby given that an Annual General Meeting of Shareholders (the
"Meeting") of Elscint Limited (the "Company") will be held at 11:00 a.m., Israel
time, on Wednesday, March 23, 2005, at the Company's offices at 13 Mozes Street,
Tel-Aviv 67442, Israel for the following purposes:
1. To re-elect the Company's current five (5) directors to serve on the
Company's board of directors ("Board of Directors");
2. To ratify the appointment of Brightman Almagor & Co., a member of
Deloitte Touche Tohmatsu, as the Company's independent auditors for
the fiscal year ended December 31, 2004 and the authorization of the
Board of Directors, upon the recommendation of the Company's 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 the purchase by the Company of insurance policies for the
coverage of liability of directors and officers of the Company,
including as directors or officers of the Company's subsidiaries.
In addition, the shareholders will be requested to consider at the Meeting
the report of the Board of Directors and the financial statements of the Company
for the fiscal year ended December 31, 2003.
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 business on February 23, 2005
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 the Company's ordinary
shares (the "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 as well as a statement from
such record holder that it did not vote such shares. 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 tenders a vote, whether in person or by proxy, will be accepted to the
exclusion of the vote(s) of the other registered holder(s) of the shares, and
for this purpose seniority will be determined by the order in which the names
appear in the Company's Register of Shareholders.
By Order of the Board of Directors,
MARC LAVINE
Corporate Secretary
Tel-Aviv, Israel
February 24, 2005
ELSCINT LIMITED
13 Mozes Street
Tel-Aviv 67442, Israel
Tel: (972-3) 608-6001
PROXY STATEMENT
This Proxy Statement is being furnished to the holders of Ordinary Shares,
New Israeli Shekels 0.05 nominal value (the "Shares"), of Elscint Limited (the
"Company") in connection with the solicitation of proxies by the management and
board of directors (the "Board of Directors") of the Company for use at the
Annual General Meeting of Shareholders (the "Meeting") to be held at 11:00 a.m.,
Israel time, on Wednesday, March 23, 2005, at the Company's offices at 13 Mozes
Street, Tel-Aviv 67442, Israel, and at any adjournment thereof, pursuant to the
accompanying Notice of Meeting.
At the Meeting, the shareholders will be asked to consider and vote on the
following matters:
1. To re-elect the Company's current five (5) directors to serve on the
Company's Board of Directors;
2. To ratify the appointment of Brightman Almagor & Co., a member of
Deloitte Touche Tohmatsu, as the Company's independent auditors for
the fiscal year ended December 31, 2004 and the authorization of the
Board of Directors, upon the recommendation of the Company's 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 the purchase by the Company of insurance policies for the
coverage of liability of directors and officers of the Company,
including as directors or officers of the Company's subsidiaries. In
addition, the shareholders will be requested to consider at the
Meeting the report of the Board of Directors and the financial
statements of the Company for the fiscal year ended December 31,
2003.
In addition, the shareholders will be requested to consider at the Meeting
the report of the Board of Directors and the financial statements of the Company
for the fiscal year ended December 31, 2003.
Finally, the shareholders may consider and act upon such other business as
may properly come before the Meeting and any adjournment thereof.
The approval of each of Proposals 1 through 3 requires the affirmative
vote of at least a majority of the votes of shareholders present and voting at
the Meeting in person or by proxy.
Each Share is entitled to one vote upon each matter to be voted on at the
Meeting. No less than two (2) shareholders, present in person or by proxy, and
holding or representing, in the aggregate, not less than fifty-one percent (51%)
of the issued and outstanding Shares, will constitute a quorum at the Meeting.
If within a half hour after the time appointed for the holding of the Meeting no
quorum is present, the Meeting will stand adjourned to the same day in the
following week, at the same time and place, or to such other day, time and place
as shall be determined by the Board of Directors by notice to the shareholders,
and at such adjourned meeting, the business for which the Meeting was called
will be transacted if at least two (2) shareholders present in person or by
proxy, and representing, in the aggregate, not less than 26% of the issued and
outstanding Shares, are present or represented.
VOTING AND REVOCATION OF PROXIES; SHARES HELD IN "STREET NAME"
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 in the enclosed postage-prepaid envelope. A form of
proxy for use at the Meeting and a return envelope are enclosed. Shares
represented by executed and unrevoked proxies will be voted at the Meeting. 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. 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. A shareholder may revoke his or
her proxy at any time before the effective exercise thereof by returning a
later-dated proxy card or by voting his or her Shares in person at the Meeting
if such shareholder is the record holder of the Shares and can provide evidence
of such (i.e., a copy of certificate(s) evidencing his or her Shares).
Note for shareholders in street name
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
as well as a statement from such record holder that it did not vote such Shares.
Proxies for use at the Meeting will be solicited by the management of the
Company and the Board of Directors. Proxies will be mailed to shareholders and
will be solicited primarily by mail. However, additional solicitations may be
made by telephone, facsimile or other means of contact by certain officers,
employees or agents of the Company, none of whom will receive additional
compensation therefor. 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 16,835,220 Shares outstanding as of February 20, 2005(1).
Each Share is entitled to one vote upon each proposal to be presented at the
Meeting.
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(1) Such number excludes 657,923 Shares held by the Company.
2
BENEFICIAL OWNERSHIP OF SECURITIES BY CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of February 20, 2005, 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:
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Name and Address Number of Percent of
Shares Shares
beneficially Beneficially
owned Owned
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Elbit Medical Holdings Ltd. (1) 10,269,784 61.00%
13 Mozes Street
Tel Aviv, Israel
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Fidelity Management & Research Co. (2) 1,430,800 8.50%
82 Devonshire Street
Boston, MA 02109-3614
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Leumi Pia Trust Company Management Co. Ltd. (3) 1,017,227 6.04%
31-33 Montefiore Street
Tel Aviv, Israel
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All directors and officers of the Company as a 390,000 2.32%
group (9 persons) (4)
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- ----------------------
(1) Elbit Medical Holdings Ltd. is a wholly-owned subsidiary of Elbit Medical
Imaging Ltd. ("EMI"), an Israeli public company whose shares are listed on
the Nasdaq National Market and on the Tel Aviv Stock Exchange ("TASE"). As
of February 20, 2005, Control Centers Ltd., a private Israeli company,
held (through its wholly-owned subsidiary, Europe-Israel (M.M.S.) Ltd.)
approximately 54.42% of the issued and outstanding share capital of EMI
(approximately 53.55% on a fully diluted basis). Control Centers is
engaged, through its direct and indirect wholly and partially owned
subsidiaries and affiliates, in the following core businesses: real estate
investment, development and operation of shopping and entertainment
centers, the hi-tech industry and hotel ownership and management. Control
Centers also holds direct interests in property development projects in
Israel.
(2) The amount and nature of beneficial ownership of these Shares is based
solely on a Schedule 13-G filed on February 14, 2003 by Fidelity
Management and Research Co.
(3) The amount and nature of beneficial ownership of these Shares is based
solely on information provided to the Company by Leumi Pia Trust Company
Management Co. as of February 20, 2005.
(4) Includes (i) 365,000 Shares underlying currently exercisable Shares
granted under the Company's employees, directors and officers incentive
plan adopted by the Company's shareholders on October 18, 2001; and (ii)
25,000 Options granted to two of the Company's directors pursuant to the
Company's employees, directors and officers incentive plan adopted by the
Company's shareholders on December 30, 2003, which are currently
exercisable or exercisable within 60 days as of February 24, 2005, and 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.
3
PROPOSAL NO. 1
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RE-ELECTION OF DIRECTORS
At the Meeting, five (5) persons are to be re-elected as directors of the
Company. The nominees, if re-elected, together with the two (2) serving external
directors, will constitute the entire Board of Directors. Each of the elected
directors will hold office until the next Annual General Meeting and until his
or her successor shall have duly taken office, unless any office is earlier
vacated under any relevant provisions of the articles of association of the
Company or applicable laws or regulations. Unless otherwise instructed, all
proxies will be voted FOR re-election of the five (5) nominees listed below as
directors of the Company.
The nominees listed below have indicated to the Company their availability
for re-election. 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.
In the event that any of the nominees is not able to serve as a director
under the articles of association of the Company, the Board of Directors will be
entitled to fill such vacancy until the next Annual General Meeting of
Shareholders. 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 for election to the
Board of Directors 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 February 20, 2005:
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YEAR
FIRST PRINCIPAL BENEFICIAL
BECAME OCCUPATION OR OWNERSHIP
NOMINEES DIRECTOR EMPLOYMENT OF SHARES*
================================================================================
Abraham (Rami) Goren(1) 1999 Executive Chairman of the 90,000
Board of Directors
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Rachel Lavine(3) 1999 President of the Company 100,000
and director
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Shimon Yitzhaki(3) 1999 President of Elbit Medical 50,000
Imaging Ltd.
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Shlomo Ben Eliyahu 2002 Consultant 12,500
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Shmuel Peretz(2) (3) 2003 Consultant 12,500
================================================================================
4
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SERVING EXTERNAL YEAR FIRST PRINCIPAL OCCUPATION BENEFICIAL
DIRECTORS BECAME OR EMPLOYMENT OWNERSHIP
DIRECTOR OF SHARES*
================================================================================
Moshe Lion(1) (2) (3) 2000 Senior partner of an 25,000
accounting firm in Israel
and Chairman of the
Provident Fund Investment
Committee of Bank Tefahot
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Benny Gal (1) (2) 2000 Controlling shareholder 25,000
and manager of Gal-BSD
Advertising Ltd.
================================================================================
(1) Member of the Donation Committee
(2) Member of the Audit Committee
(3) Member of the Balance Sheet Committee
* The beneficial ownership column represents Shares and options exercisable
into Shares granted under the Company's two employees, directors and
officers incentive plans, with respect to which the beneficial ownership
has vested as of the date hereof.
Abraham (Rami) Goren was appointed as Executive Chairman of our board of
directors as of July 1, 1999. Formerly, Mr. Goren had been a partner in the law
firm of Prof. Joseph Gross, Hodak, Greenberg & Co. (now known as Gross,
Kleinhendler, Hodak, Halevy, Greenberg & Co.), a leading Israeli securities and
corporate law firm. From September 1989 until August 1992, Mr. Goren was an
associate in the law firm of Weil, Gotshal & Manges in New York City. Mr. Goren
also serves as a member of the board of directors of Excellence Nessuah Ltd., a
brokerage house which is a member firm on the TASE. Mr. Goren also serves as a
director of various private companies in Israel and abroad. Mr. Goren received
his LL.B. degree from Bar Ilan University in 1986 and an LL.M. degree from New
York University in 1989. Mr. Goren was admitted to the Israeli Bar in 1987 and
to the New York State Bar in 1990.
Rachel Lavine was appointed President and a member of our board of
directors in May 1999. Since March 1998, she has also served as Vice President
of Europe-Israel, and from 1994 to 1998 Ms. Lavine served as Chief Financial
Officer of Control Centers. Ms. Lavine holds a Bachelor of Arts degree in
accounting from the College for Management in Tel Aviv, and is a certified
public accountant. Ms. Lavine is married to Marc Lavine, the Company's General
Counsel and Corporate Secretary.
Shimon Yitzhaki was appointed a member of our board of directors in May
1999. In May 1999 he was also appointed President of Elbit Medical Imaging Ltd.
("EMI"). Since March 1998, Mr. Yitzhaki has served as the Vice President of
Europe-Israel, and, since the mid-1980's, as Vice President of Control Centers.
Mr. Yitzhaki holds a Bachelor of Arts degree in Accounting from Bar Ilan
University, and is a certified public accountant.
5
Moshe Lion was appointed a member of our board of directors in October
2000. Mr. Lion is a senior partner of an accounting firm in Israel and chairman
of Israel Railways and of the Provident Fund Investment Committee of Bank
Tefahot, an Israeli bank. From December 1997 to July 1999 Mr. Lion was Director
General of the Israeli Prime Minister's Office and an economic advisor to the
Israeli Prime Minister. From January 1997 to November 1997 he served as the Head
of the Bureau of the Israeli Prime Minister's Office and as an economic advisor
to the Israeli Prime Minister. Mr. Lion holds a Bachelor of Arts degree in
accounting and economics and a Master's Degree in Law (LL.M.) from Bar Ilan
University.
Benny Gal was appointed a member of our board of directors in October
2000. Mr. Gal is the owner and manager of Gal-BSD Advertising Ltd., a firm
engaged in the advertising field. Mr. Gal holds a business management degree
from the College for Management in Tel Aviv and is a graduate of the Marketing
and Advertising School of the Advertisers Association in Israel. Mr. Gal is also
a graduate of the Corporation Senior Directors training course of the Business
Management Faculty in Tel-Aviv University.
Shlomo Ben Eliyahu was appointed a member of our board of directors in
March 2002. Mr. Ben Eliyahu serves as general director of the Settlement
Division of the World Zionist Organization as well as the chairman of the board
of directors of the East Jerusalem Development Ltd. Mr. Ben Eliyahu is also a
member of the Israel Lands Council. During 2001, Mr. Ben Eliyahu served as a
general director of the Israel Land Administration, and from 1999 to 2001 Mr.
Ben Eliyahu was the Director General of the Israeli Ministry of Construction and
Housing. Prior to that, Mr. Ben Eliyahu served as a director of the Israeli
Ports and Railways Authority and as a publicly nominated director of a
construction company. Mr. Ben Eliyahu was also a member of the Governmental
Directors General Council and the chairman of the Israeli Contractors Council.
Mr. Ben Eliyahu holds an LL.B. degree from Bar Ilan University.
Shmuel Peretz was appointed a member of our board of directors in March
2003. Between 1997 and 2002, Mr. Peretz served as the president of the Israel
Aircraft Industries European division. Between 1991 and 1996, Mr. Peretz served
as vice president (finance) of the Israel Aircraft Industries. Between 1980-2002
Mr. Peretz served as a director of Elta Ltd., Magal Ltd., Medisel Technologies
Inc. SpaceCom Ltd., and Belgium Advanced Technologies (a Belgium company). Mr.
Peretz holds a Bachelor of Arts degree in economics and political science from
the Hebrew University in Jerusalem, as well as a masters of business
administration degree from the New York Institution of Technology.
Alternate Directors
Subject to the Companies Law, the articles of association of the Company
provide that any director may appoint, by a written notice to the Company,
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. Pursuant to the articles of association of the
Company, any alternate director may exercise all powers and privileges of the
director who appointed him at any meeting, which he attends in place of such
appointing director. According to the articles of association of the Company,
alternate directors are not entitled to receive any remuneration from the
Company. The appointment of an alternate director does not in itself diminish
the responsibility of the appointing director as a director.
6
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.
The Company's current external directors, Messrs. Moshe Lion and Benny
Gal, will continue to serve as external directors until the expiration of their
three-year term on October 1, 2006 (in accordance with applicable law).
It is proposed that the following resolution be adopted at the Meeting:
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"RESOLVED, that the re-election of Messrs. Goren, Yitzhaki, Ben-Eliyahu and
Peretz and Ms. Lavine as directors of the Company, as presented to the Company's
shareholders, be, and same hereby is, approved."
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The Board of Directors recommends a vote FOR approval of this proposed
resolution.
PROPOSAL NO. 2
--------------
RATIFICATION OF THE APPOINTMENT OF BRIGHTMAN ALMAGOR & CO. AS INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004 AND THE AUTHORIZATION OF
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
The Audit Committee and Board of Directors propose that shareholders
approve the appointment of Brightman Almagor & Co., a member of Deloitte Touche
Tohmatsu, as independent auditors of the Company for the fiscal year ended
December 31, 2004 and 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 December 2003,
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:
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"RESOLVED, that the appointment of Brightman Almagor & Co., the Israeli
member of Deloitte Touche Tohmatsu, as independent auditors of the Company
for the fiscal year ended December 31, 2004 be, and the same hereby is,
approved, and that the Board of Directors be, and it hereby is,
authorized, 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 for such fiscal year."
-------------------------------------------------------------------------
The Board of Directors recommends a vote FOR approval of this proposed
resolution.
7
PROPOSAL NO. 3
--------------
APPROVAL OF THE PURCHASE BY THE COMPANY OF AN INSURANCE POLICY FOR THE
COVERAGE OF LIABILITY OF DIRECTORS AND OFFICERS OF THE COMPANY, INCLUDING AS
DIRECTORS OR OFFICERS OF THE COMPANY'S SUBSIDIARIES
Following the approval by the Company's Audit Committee and Board of
Directors, it is proposed that the purchase of a policy for the coverage of the
liability of directors and officers of the Company, including as directors or
officers of the Company's subsidiaries, for a one-year period beginning on
October 31, 2004 and ending on October 31, 2005, be approved. Such policy would
cover a total liability of $40 million per occurrence and per the duration of
the policy which represents the overall directors and officers liability policy
covering the directors and officers of Europe-Israel (M.M.S.) Ltd.
("Europe-Israel") (the indirect parent company of the Company) and companies
controlled by it. The premium paid by the Company with respect to this insurance
policy was approximately $196,000, representing its share of the total premium
of $589,000 paid for the overall policy for Europe-Israel and the companies
controlled by it. The coverage of such policy also includes acts and/or
omissions performed by previous directors and officers of the Company for a
one-year period beginning on October 31, 2004 and ending on October 31, 2005
without any retroactive limitation and subject to the terms of the policy.
It is proposed that the following resolution be adopted at the Meeting:
--------------------------------------------------------------------------
"RESOLVED, that the Company's purchase of an insurance policy covering
insurance of directors' and officers' liability, including as directors or
officers of the Company's subsidiaries, and the terms of such policy, as
presented to the shareholders, be, and same hereby is, approved."
--------------------------------------------------------------------------
The Board of Directors recommends a vote FOR approval of this proposed
resolution.
In addition to the foregoing proposals, the shareholders will be requested
to consider at the Meeting the report of the Board of Directors and the
financial statements of the Company for the fiscal year ended December 31, 2003.
OTHER BUSINESS
The Board of Directors knows of no other matter to come before the
Meeting. However, if any matters requiring a vote of the shareholders arise, it
is the intention of the persons named in the enclosed form of proxy to vote such
proxy in accordance with their best judgment, including any matters or motions
dealing with the conduct of the Meeting.
8
The prompt return of your proxy will be appreciated and helpful in obtaining the
necessary vote. Therefore, whether or not your 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 48 hours before
the Meeting.
By Order of the Board of Directors,
ABRAHAM (RAMI) GOREN
Executive chairman of the Board of Directors
RACHEL LAVINE
President
February 24, 2005
9