FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
The Securities Exchange Act of 1934
For the month of June 2005
-------------------------------------
G. WILLI-FOOD INTERNATIONAL LTD.
(Translation of registrant's name into English)
3 Nahal Snir St., Yavne, Israel 81224
(Address of principal executive offices)
-------------------------------------
Indicate by check mark whether registrant files or will file annual reports
under cover Form 20-F or Form 40-F:
FORM 20-F [X] FORM 40-F [_]
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1):..........
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of
a Form 6-K if submitted solely to provide an attached annual report to security
holders.
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7):............
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of
a Form 6-K if submitted to furnish a report or other document that the
registrant foreign private issuer must furnish and make public under the laws of
the jurisdiction in which the registrant is incorporated, domiciled or legally
organized (the registrant's "home country"), or under the rules of the home
country exchange on which the registrant's securities are traded, as long as the
report or other document is not a press release, is not required to be and has
not been distributed to the registrant's security holders, and, if discussing a
material event, has already been the subject of a Form 6-K submission or other
Commission filing on EDGAR.
Indicate by check mark whether registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
YES [_] NO [X]
If "YES" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-________.
EXPLANATORY NOTE:
THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE
PROSPECTUS, DATED APRIL 19, 2000, OF G. WILLI-FOOD INTERNATIONAL LTD.
("REGISTRANT") INCLUDED IN REGISTRANT'S REGISTRATION STATEMENT ON FORM F-3 (FILE
NO. 333-11848), AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IF
FILED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION.
On June 20, 2005, the Registrant distributed to its shareholders its proxy
statement for the annual general meeting of shareholders to be held on July 20,
2005.
EXHIBITS
The following document is furnished herewith as an exhibit to this Form
6-K: A copy of the Registrant's proxy statement and proxy card for the annual
general meeting of shareholders to be held on July 20, 2005.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
G. WILLI-FOOD INTERNATIONAL LTD.
Dated: June 26, 2005
By: Joseph Williger
-------------------
Joseph Williger
Chief Executive Officer
G. WILLI-FOOD INTERNATIONAL LTD.
3 NAHAL SNIR STREET, NORTHERN INDUSTRIAL ZONE, YAVNE 81224 ISRAEL
TEL: 08-9322233; FAX: 08-9322299
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 20, 2005
NOTICE IS HEREBY GIVEN that on Wednesday July 20, 2005, at 4:00 p.m. Israeli
time, the Annual General Meeting of Shareholders (the "Meeting") of G.
Willi-Food International Ltd. (the "Company") will be held at the offices of the
Company, 3 Nahal Snir Street, Northern Industrial Zone, Yavne 81224 Israel.
THE MATTERS ON THE AGENDA OF THE MEETING AND THE SUMMARY OF THE PROPOSED
RESOLUTIONS ARE AS FOLLOWS:
1. To elect Messrs. Joseph Williger, Zvi Williger and Rachel Bar-Ilan, as
Directors of the Company, each to hold office subject to the Company's
Articles of Association and the Israeli Companies Law;
2. To re-appoint Deloitte Touche - Brightman, Almagor & Co. CPA (ISR) as the
Company's Independent Auditors for the year 2005 to serve until the next
annual general meeting of the Company's shareholders, and to authorize the
Audit Committee of the Board of Directors to determine their remuneration;
3. To receive and consider the Financial Statements of the Company for the
fiscal year ended December 31, 2004 together with the report of the
auditors thereon and the report of the Board of Directors for such year;
4. To approve the complete restatement of the Company's Articles of
Association in order to comply with the provisions of the Israeli Companies
Law, 5759-1999;
5. To approve the elimination of the potential liability to the Company of the
Company's Officers, including the Controlling Shareholders (as such terms
are defined in the Israeli Companies Law), which could arise from a breach
of the duty of care (except in connection with Distribution as such term is
defined in the Israeli Companies Law) owed to the Company by such persons
in their capacity as Officers, and to approve an irrevocable
indemnification of the Officers by the Company with respect to any
liability or expense paid for by the officer or that the Officer may be
obligated to pay for, with regard to the matters set forth in the
certificate attached as Exhibit A hereto;
6. To approve an agreement between the Company and Titanic Food Ltd., an
affiliate of the Company, regarding the purchase by the Company from
Titanic Food Ltd. of a parcel of real estate on which the Company intends
to build a new logistic center, at a price equal to the cost incurred and
carrying costs of Titanic Food Ltd.;
7. To approve certain amendments to the Company's Management Service
Agreements, which the Company previously entered into with companies which
are controlled by Messrs. Zvi Williger and Joseph Williger, respectively,
and which are affiliates of the Company; and
8. To transact such other business as may properly come before the Meeting or
any adjournment thereof.
A shareholder who wishes to vote at the Meeting but who is unable to attend
in person may appoint a representative to attend the Meeting and vote on such
shareholder's behalf. In order to do so, such shareholder must execute an
instrument of appointment and deposit it at the offices of the Company (or its
designated representative) no later than 48 hours before the time appointed for
the Meeting.
In addition, whether or not a shareholder plans to attend, a shareholder
can insure his vote is represented at the Meeting by promptly completing,
signing, dating and returning his proxy (in the form attached) in the enclosed
envelope to the offices of the Company or the offices of the Company's transfer
agent no later than 48 hours prior to the Meeting.
The presence of two or more shareholders in person or by proxy representing
not less then 40% of the outstanding Ordinary Shares entitled to vote at the
Meeting will constitute a quorum for the transaction of business at the Meeting.
Under the Company's Articles of Association, if a quorum is not present within
one-half hour of the commencement time of the Meeting, the Meeting will be
adjourned automatically until one week thereafter at the same time and place, or
at any other time and place as the directors may designate and state in a notice
to the shareholders. If, within one-half hour after the adjourned Meeting is
reconvened, a quorum of two or more shareholders representing at least 40% of
the outstanding Ordinary Shares entitled to vote is not present, then the
presence of only two shareholders (irrespective of the number of Ordinary Shares
they own) will be sufficient to constitute a quorum for all matters to be
considered at the Meeting.
The Board of Directors has fixed the close of business on June 15, 2005 as
the record date for determination of shareholders entitled to notice of, to
attend and to vote at, the Meeting. Only shareholders of record at the close of
business on June 15, 2005 (the "Record Date") are entitled to notice of, to
attend and to vote at the Meeting. At the close of business on the Record Date,
8,615,000 Ordinary Shares were outstanding and eligible for voting at the
Meeting. Each shareholder of record is entitled to one vote for each Ordinary
Share held on all matters to come before the Meeting.
The adoption of resolutions 1, 2 and 3 as described hereinabove is
contingent upon, in each case, the favorable vote of a simple majority of the
Company's shareholders attending and voting at the Meeting.
The adoption of resolution 4 as described hereinabove is contingent upon
the favorable vote of at least 75% of all votes properly cast at the Meeting,
whether in person or by proxy, without taking into account abstentions.
The adoption of resolution 5 regarding the directors (except Mr. Zvi
Williger and Mr. Joseph Williger) is contingent upon the favorable vote of a
simple majority of the Company's shareholders attending and voting at the
General Meeting of the Company's shareholders.
The adoption of resolution 5 regarding Mr. Zvi Williger and Mr. Joseph
Williger and the adoption of resolution 6 and resolution 7 is contingent upon
the favorable vote of a simple majority of the Company's shareholders attending
and voting at the General Meeting of the Company's shareholders, which majority
must include at least one-third of the votes of shareholders who are not
considered to be Controlling Shareholders and who vote thereon or,
alternatively, the votes against such resolution shall not be more than 1% of
the total voting rights of the Company. A "Controlling Shareholder" is defined
in the Israeli Companies Law as a shareholder with the ability to control the
actions of a company, other than by virtue of his authority as a director and/or
officer of the company. A shareholder holding 50% or more of the shares of a
company is presumed to be a "Controlling Shareholder" of such company.
The accompanying Proxy Statement contains additional information with
respect to the matters on the agenda and certain related matters.
You are cordially invited to attend the Meeting. Whether or not you intend
to attend the Meeting, you are urged to promptly complete, date and execute 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 Meeting and to vote your Ordinary Shares in
person.
Copies of the Company's audited financial statements for the fiscal year
ended December 31, 2004 together with the report of the auditors thereon and the
complete copy of the proposed resolutions shall be available for public
inspection each day from July 6, 2005 until July 13, 2005, between the hours of
9:00 a.m. - 5:00 p.m. at the Company's offices in 3 Nahal Snir Street, Northern
Industrial Zone, Yavne 81224 Israel.
By order of the Board of Directors
/S/ Joseph Williger
-------------------
Joseph Williger
CHIEF EXECUTIVE OFFICER Dated: Yavne, Israel, June 20, 2005
- 2 -
G. WILLI-FOOD INTERNATIONAL LTD.
3 NAHAL SNIR STREET, NORTHERN INDUSTRIAL ZONE,
YAVNE 81224 ISRAEL
PROXY STATEMENT
------------------
This proxy statement is furnished to shareholders in connection with the
solicitation by the Board of Directors of G. Willi-Food International Ltd. (the
"Company") of proxies to be voted at the Annual General Meeting of Shareholders
(the "Meeting") of the Company to be held on July 20, 2005 at 4:00 p.m. (local
time) at the offices of the Company, 3 Nahal Snir Street, Northern Industrial
Zone, Yavne 81224, Israel, and at any adjournment thereof. This proxy statement
and the proxies solicited hereby are first being sent or delivered to
shareholders on or about June 20, 2005.
GENERAL INFORMATION
All Ordinary Shares of the Company, nominal value NIS 0.1 per share (the
"Ordinary Shares"), represented at the Meeting by properly executed proxies
received by the Company at its offices or the offices of the Company's transfer
agent by 4:00 p.m. (New York City time) at least 48 hours prior to the Meeting
and which are not revoked will be voted at the Meeting in accordance with the
instructions contained therein. If the person executing or revoking a proxy does
so under a power of attorney or other authorization, including authorization by
a corporation's board of directors or shareholders, the Company must receive the
original or a duly certified copy of the power of attorney or other
authorization. A proxy may be revoked by a shareholder at any time prior to its
use by voting in person at the Meeting or by executing a later proxy, provided
that such later proxy is received within the above-referenced time period, or by
submitting a written notice of revocation to the Secretary of the Company at the
Company's offices at least one hour prior to the Meeting. If the proxy is signed
properly by the shareholder and is not revoked, it will be voted at the Meeting.
If a shareholder specifies how the proxy is to be voted, the proxy will be voted
in accordance with such specification. Otherwise, the proxy will be voted in
favor of each of the matters described herein.
The presence of two or more shareholders in person or by proxy representing
not less then 40% of the outstanding Ordinary Shares entitled to vote at the
Meeting will constitute a quorum for the transaction of business at the Meeting.
Under the Company's Articles of Association, if a quorum is not present within
one-half hour of the commencement time of the Meeting, the Meeting will be
adjourned automatically until one week thereafter at the same time and place, or
at any other time and place as the directors may designate and state in a notice
to the shareholders. If, within one-half hour after the adjourned Meeting is
reconvened, a quorum of two or more shareholders representing at least 40% of
the outstanding Ordinary Shares entitled to vote is not present, then the
presence of only two shareholders (irrespective of the number of Ordinary Shares
they own) will be sufficient to constitute a quorum for all matters to be
considered at the Meeting.
The adoption of resolutions 1, 2 and 3 as described herein is contingent
upon, in each case, the favorable vote of a simple majority of the Company's
shareholders attending and voting at the Meeting.
The adoption of resolution 4 as described herein is contingent upon the
favorable vote of a special majority of at least 75% of all votes properly cast
at the Meeting, whether in person or by proxy, without taking into account
abstentions.
The adoption of resolution 5 regarding the directors (except Mr. Zvi
Williger and Mr. Joseph Williger) is contingent upon, in each case, the
favorable vote of a simple majority of the Company's shareholders attending and
voting at the General Meeting of the Company's shareholders.
The adoption of resolution 5 regarding Mr. Zvi Williger and Mr. Joseph
Williger and the adoption of resolution 6 and resolution 7 is contingent upon
the favorable vote of a simple majority of the Company's shareholders attending
and voting at the General Meeting of the Company's shareholders, which majority
is to include at least one-third of the votes of shareholders who are not
considered to be Controlling Shareholders and who vote thereon or,
alternatively, the votes against such resolution shall not be more than 1% of
the total voting rights of the Company. A "Controlling Shareholder" is defined
in the Israeli Companies Law as a shareholder with the ability to control the
actions of a company, other than by virtue of his authority as a director and/or
officer of the company. A shareholder holding 50% or more of the shares of a
company is presumed to be a "Controlling Shareholder" of such company.
Only shareholders of record at the close of business on June 15, 2005 (the
"Record Date") are entitled to notice of, to attend and to vote at the Meeting.
At the close of business on the Record Date, 8,615,000 Ordinary Shares were
outstanding and eligible for voting at the Meeting. Each shareholder of record
is entitled to one vote for each Ordinary Share held on all matters to come
before the Meeting.
Copies of the Company's audited financial statements for the fiscal year
ended December 31, 2004 together with the report of the auditors thereon and the
complete copy of the proposed resolutions will be available at the Meeting as
well as each day between July 6, 2005 until July 16, 2005, between the hours of
9:00 a.m. - 5:00 p.m. at the Company's offices in 3 Nahal Snir Street, Northern
Industrial Zone, Yavne 81224 Israel.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of June 1, 2005, the number of Ordinary
Shares beneficially owned by (i) each shareholder known to the Company to own
more than 10% of the Ordinary Shares and (ii) all directors and officers as a
group:
NUMBER OF
ORDINARY SHARES PERCENTAGE OF
NAME AND ADDRESS BENEFICIALLY OWNED ORDINARY SHARES
Willi-Food Investments Ltd. (1) 6,241,715 (3) 72.45%
Joseph Williger (1) 6,241,715 (2)(3) 72.45%
Zvi Williger (1) 6,241,715 (2)(3) 72.45%
All directors and officers as a group (2 persons) 6,241,715 (2)(3) 72.45%
(1) Willi-Food Investments Ltd.'s securities are traded on the Tel Aviv Stock
Exchange. The principal executive offices of Willi-Food Investments Ltd.
are located at 3 Nahal Snir St., Northern Industrial Zone, Yavne, 81224
Israel. The business address of each of Messrs. Joseph Williger and Zvi
Williger is c/o the Company, 3 Nahal Snir St., Northern Industrial Zone,
Yavne, 81224 Israel.
(2) Includes 6,241,715 Ordinary Shares owned by Willi-Food Investments Ltd.
Messrs. Zvi Williger and Joseph Williger serve as directors and executive
officers of Willi-Food Investments Ltd. and of the Company. Under Israeli
law, Mr. Zvi Williger is deemed to be the controlling shareholder of
Willi-Food Investments Ltd. and has the ability to control the Company's
management and policies, including matters requiring shareholder approval
such as the election of directors. Under Israeli law, Mr. Joseph Williger,
who owns approximately 18% of the Ordinary Shares of Willi-Food Investments
Ltd., is not deemed to be a group with Mr. Zvi Williger or a controlling
shareholder of the Company.
(3) In connection with Willi-Food Investments Ltd.'s second public offering on
the Tel Aviv Stock Exchange in October 1997, 1,700,000 of the Ordinary
Shares of the Company held by Willi-Food Investments Ltd. have been pledged
in favor of The Trust Company of the Invested Bank (Israel) as collateral
to secure Willi-Food Investments Ltd.'s obligations and indebtedness to
holders of its debentures, which are publicly traded on the Tel Aviv Stock
Exchange. These debentures had an aggregate principal amount of NIS 2.8
million (approximately USD 0.6 million) at June 1, 2005.
The Company believes that 2,373,285 Ordinary Shares (approximately 27.55%
of its outstanding Ordinary Shares) are held by persons who are not officers,
directors or the owners of 10% of the Company's outstanding Ordinary Shares.
- 2 -
PROPOSAL NO. 1 TO ELECT DIRECTORS
The Board of Directors has proposed that the following persons, all of whom
are incumbent directors, are to be elected as directors to serve in such office
until the next Annual General Meeting of shareholders, and until their
respective successors have been duly elected: (i) Joseph Williger, (ii) Zvi
Williger and (iii) Rachel Bar-Ilan. Such nominees are to serve together with Mr.
Shai Bazak and Mr. David Weiss, who serve as External Directors (see below) of
the Company. Unless authority to do so is withheld, it is intended that proxies
solicited by the Board of Directors will be voted for the election of the
persons nominated. If any nominee is unable or unwilling to serve, which the
Board of Directors does not anticipate, the persons named in the proxy will vote
for another person in accordance with their best judgment.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE FOR PROPOSAL NO. 1.
The following information is supplied by the Board of Directors of the
Company with respect to each person nominated and recommended to be elected as
director, based upon the records of the Company and information furnished to it
by the nominee.
JOSEPH WILLIGER, age 48, has served as the Chief Executive Officer (or
general manager) and a Director of the Company since its inception in January
1994.. He has also served as a director of the Company's subsidiaries, W.F.D.
Ltd. ("W.F.D.") and Gold - Frost Ltd. ("Gold - Frost"), since November 1996 and
April 2001, respectively. Mr. Williger has also served as a director and as
chairman of the Board of Willi-Food Investments, the controlling shareholder of
the Company, since December 1992 and June 1994, respectively. Mr. Williger
served as Director of Titanic Foods Ltd. ("Titanic"), a company he owns together
with Mr. Zvi Williger, since April 1990. Mr. Williger received his academic
education in economics from Bar Ilan University in Israel in 1983. Mr. Williger
is the brother of Zvi Williger, Chief Operating Officer and Chairman of the
Board of Directors of the Company.
ZVI WILLIGER, age 50, has served as the Chief Operating Officer and
Chairman of the Company since January 1997, and from inception of the Company to
January 1997 as a Director and Manager of Marketing Development of the Company.
Mr. Williger has also served as a director of the Company's subsidiaries, W.F.D.
and Gold Frost, since November 1996 and April 2001, respectively. Mr. Williger
has also served as a director of Willi-Food Investments since December 1992. Mr.
Williger served as Director of Titanic since April 1990. Mr. Williger attended
Fresno University in California. Zvi Williger is the brother of Joseph Williger,
Chief Executive Officer and a director of the Company.
RACHEL BAR-ILAN, age 47, has served as Director of the Company since May
2001. Since 1999, Ms. Bar-Ilan managed the marketing and application of medical
laboratory instrumentation in medical laboratories of Medtechnica, a company
publicly traded on the Tel Aviv Stock Exchange. From 1994 to 1999, Ms. Bar-Ilan
worked for Egentec Ltd., where she was in charge of the marketing and
application of medical instrumentation in the chemical field. Ms. Bar Ilan
received her degree in Medical Science (MSc) from the Technion - Israel
Institute of Technology in Haifa, Israel.
EXECUTIVE OFFICER
GIL HOCHBOIM, age 35, has served as Chief Financial Officer of the Company
since August 2000. Mr. Hochboim also provides the Company's principle
shareholder, Willi-Food Investments Ltd., with certain financial services.
Between April 1995 and February 1998, Mr. Hochboim served as Deputy Comptroller
of Dan Hotels Corp. Ltd. and between March 1998 and August 2000 he served as
deputy manager of Ha'menia Goods Transport Corp. Ltd. Mr. Hochboim is a
certified public accountant (Israel). He received his BA in Accounting and
Business Management from the College of Management, Tel-Aviv, Israel.
- 3 -
CORPORATE GOVERNANCE
TERMS OF OFFICE
Directors are elected by the shareholders at the annual general meeting of
the shareholders, except in certain cases where directors (who are not External
Directors) are appointed by the Board of Directors, and their appointment is
later ratified at the first meeting of the shareholders thereafter. Except for
External Directors (as discussed below), directors serve until the next annual
general meeting.
ALTERNATE DIRECTORS
The Articles of Association of the Company provide that any director may,
by written notice to the Company, appoint another person to serve as an
alternate director. Under the Israeli Companies Law, the directors of the
Company can not appoint an incumbent director or an incumbent alternate director
as an alternate director. The term of appointment of an alternate director may
be for a specified period, or until notice is given of the termination of the
specified period or of the appointment. To the Company's knowledge, no director
currently intends to appoint any other person as an alternate director, except
if the director is unable to attend a meeting of the Board. A Director on a
Board Committee may appoint anyone to be his Alternate subject to the potential
alternate not being a member of such committee, and if the appointing Director
is an External Director then the alternate must be an External Director having
suitable financial and accountancy expertise or professional qualifications, as
those of the appointing director. Except for the foregoing regarding the board
committee an External Director cannot appoint an alternate director.
AUDIT COMMITTEE
NASDAQ REQUIREMENTS
The Company's Ordinary Shares are listed for quotation on the Nasdaq Small
Cap Market and we are subject to the rules of the Nasdaq Small Cap Market
applicable to listed companies. Under the current Nasdaq rules, applicable to
the Company in July 2005, a listed company is required to have an audit
committee consisting of at least three independent directors, all of whom are
financially literate and one of whom has accounting or related financial
management expertise. Rachel Bar-Ilan, Shai Bazak and David Weiss qualify as
independent directors under the current Nasdaq requirements, and are members of
the Audit Committee. The Company is a "Controlled Company" within the meaning of
the Nasdaq rules since more than 50% of its voting power is held by Willi-Food
Investments Ltd. As a Controlled Company, the Company is exempt from certain
Nasdaq independence requirements such as the requirement that a majority of the
Board of Directors be independent and the rules relating to independence of
directors approving nominations and executive compensation.
The Audit Committee of the Board of Directors assists the board in
fulfilling its responsibility for oversight of the quality and integrity of our
accounting, auditing and financial reporting practices and financial statements
and the independence qualifications and performance of our independent auditors.
The Audit Committee also has the authority and responsibility to oversee our
independent auditors, to recommend for shareholder approval the appointment and,
where appropriate, replacement of our independent auditors and to pre-approve
audit engagement fees and all permitted non-audit services and fees.
EXTERNAL DIRECTORS UNDER ISRAELI LAWS
Under the Israeli Companies Law, Israeli companies whose securities are
publicly traded are required to appoint at least two External Directors (the
"External Directors") elected at a general meeting of a company's shareholders
by a prescribed majority intended to allow non-affiliates to influence such
election. The election of an External Director requires either a simple majority
of a company's shareholders attending and voting at the General Meeting, which
majority includes at least one-third of the Non-Controlling Shareholders present
and voting or that the votes against any External Director are less than 1% of
the total voting rights in the Company. A "Controlling Shareholder" is defined
in the Israeli Companies Law as a shareholder with the ability to control the
actions of the company, whether by majority ownership or otherwise, and for the
purpose of transactions with related parties, it may include a shareholder who
holds at least 25% of the voting rights in the Company, provided that there is
no other person who holds shares that have 50% or more of the voting rights in
the Company.
- 4 -
The Israeli Companies Law details certain standards for the independence of
External Directors. They must be unaffiliated with the company on whose board
they serve and such company's principals. According to a recently adopted
amendment to the Israeli Companies Law, at least one of the External Directors
must have suitable financial and accountancy expertise and the rest of the
External Directors must have professional qualifications. The professional
qualifications and standards are to be determined in regulations, which were not
yet been adopted. According to the Israeli Companies Law, the External Directors
must be residents of Israel; however according to the Companies Regulations
(Relief for Public Companies whose Shares are Registered for Trade Outside of
Israel) 5760 - 2000 (the "Relief Regulations"), such requirement does not apply
to a Foreign Traded company. If all members of the board of directors of a
company are of the same sex, such company must appoint at least one External
Director of the opposite sex. The External Directors are entitled to obtain all
information relating to such company's management and assets and to receive
assistance, in special cases, from outside experts at the expense of the
company. The law imposes an obligation on these directors to act to convene a
meeting of a company's board of directors upon becoming aware of matters that
suggest infringements of law, neglect of good business practice or conduct by an
Officer, which may result in a breach of duty of such Officer. An "Officer" is
defined in the Israeli Companies Law as a director, managing director, chief
business manager, executive vice president, vice president, other manager
directly subordinate to the managing director and any other person assuming the
responsibilities of any of the foregoing positions without regard to such
person's title.
An External Director shall be appointed for a period of three consecutive
years and may be re-appointed for one additional three-year period only. Under
the Israeli Companies Law, any committee of the board of directors to which the
board of directors has delegated its powers in whole or in part, must include at
least one External Director, and the audit committee must include all the
External Directors.
Mr. Shai Bazak was elected as an External Director in August 2003. Mr.
David Weiss was elected as an External Director in August 2004.
The following information is supplied by the Board of Directors of the
Company with respect to the persons that were elected as External Directors,
based upon the records of the Company and information furnished to it by the
External Directors.
SHAI BAZAK, age 37, has served as an external director of the Company since
August 2003 and holds an MA in Public Administration. He is a director manager
of C.P.M. Israel Investment Company Ltd., an investment company. From 1998
through 2000 he served as the Consul General of Israel to Florida and Puerto
Rico. From 1996 through 1998 he was spokesperson and media affairs advisor to
the Prime Minister of Israel, Mr. Benjamin Netanyahu. From 1994 through 1996 he
was the spokesperson and media advisor to the Likud party chairman.
DAVID WEISS, age 60, has served as an external director of the Company
since August 2004. He is a Certified Internal Auditor from the Institute of
Internal Auditors (New York) and has served as the General Manager of Retail
Initiation Forum Ltd. since 2002, and also as an external director and chairman
of the Audit Committee of Kish Air Conditioning Ltd, an Israeli company traded
on the Tel Aviv Stock Exchange. From 1989 through 2002, he served as vice
president of administration for Club Market Marketing Chains Ltd., a large
Israeli supermarket chain. Between 1981 and 1989 he served as deputy internal
auditor at Solel Bone Ltd., an Israeli construction company, and between 1970
and 1981 he served in the Israeli port authorities as an internal auditor. Mr.
Weiss has also served in the past as a director of Co-Op Tzafon, New-Farm Ltd.,
Hamashbir Mazon Ltd., Hamashbir Latcharcan Ltd. and April Ltd., Israeli
companies engaged in selling food, clothing and pharmaceuticals to consumers.
Mr. Weiss received his BA in Accounting from Haifa University, Israel.
Under the Israeli Companies Law, Israeli companies whose securities are
publicly traded are also required to appoint an internal auditor, in accordance
with the proposal of the Audit Committee. The role of the internal controller is
to examine, INTER ALIA, whether the Company's actions comply with the law,
integrity and orderly business procedures. In November 1997, the Board of
Directors of the Company, in accordance with the proposal of the Company's Audit
Committee, appointed Mr. Joshua Freund, CPA (Isr), as internal auditor of the
Company.
- 5 -
APPROVAL OF CERTAIN TRANSACTIONS UNDER THE ISRAELI COMPANIES LAW
In accordance with the Israeli Companies Law and the Company's Articles of
Association, the Company has agreed to indemnify and insure its directors and
senior officers against certain liabilities, which they may incur in connection
with the performance of their duties. Under the terms of such indemnification
provisions, the Company may, to the extent permitted by law, indemnify an
Officer for legal expenses incurred by him in connection with such
indemnification. Since the Israeli Companies Law has changed since the Company
agreed to the indemnification, it is necessary to completely restate the
Company's Articles of Association to reflect these changes (see proposal No.4
hereinbelow) and to provide for a revised elimination of the potential liability
of the Company's officers and a revised indemnification for the Company's
officers (see proposal No.5 hereinbelow).
On May 4, 2005, the Board of Directors and the Audit Committee of the Board
of Directors approved the complete restatement of the Company's Articles of
Association. The complete restatement of the Company's Articles of Association
was necessary in order to conform the Company's Articles of Association to the
revised provisions of the Israeli Companies Law. The complete restatement of the
Company's Articles of Association is available for review on the Company's
website at www.willi-food.co.il commencing on July 6, 2005.
On May 4, 2005, the Board of Directors and Audit Committee of the Company
voted to approve the elimination of the potential liability to the Company of
the Company's Officers, including the Controlling Shareholders (as such terms
are defined in the Israeli Companies Law), which could arise from a breach of
the duty of care (except in connection with Distribution as such term is defined
in the Israeli Companies Law) owed to the Company by such persons in their
capacity as Officers, and to approve an irrevocable indemnification of the
Officers by the Company with respect to any liability or expense paid for by the
Officer or that the Officer may be obligated to pay for, with regard to the
matters set forth in the certificate attached as Exhibit A hereto. In light of
the changed to the Israeli Companies law, such indemnification provisions are
common in Israel. Please refer to Exhibit A for a more complete description of
the indemnification and elimination of liability provisions.
The Israeli Companies Law requires disclosure by an Officer or by the
Controlling Shareholders of the Company to the Company in the event that an
Officer has a direct or indirect personal interest in transactions to which the
Company intends to be a party.
The Israeli Companies Law requires that certain transactions, actions and
arrangements be approved, in certain cases, by the disinterested members of the
audit committee of a company's Board of Directors, and by the disinterested
members of the Board of Directors itself. In certain circumstances, approval of
the General Meeting of the Company's Shareholders is also required. All of the
External Directors must serve on the audit committee. The vote required by the
audit committee and the Board of Directors for approval of such matters, in each
case, is a majority of the disinterested directors participating in a duly
convened meeting.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors held five meetings during the year ended
December 31, 2004. Each of the directors, besides Mr. Bazak, attended, in
person, 100% of the meetings of the Board of Directors. Mr. Bazak attended, in
person, 60% of the meeting of the Board of Directors.
In July 1996 the Board of Directors established an Audit Committee. The
Audit Committee currently consists of three members: Rachel Bar-Ilan, Shai Bazak
and David Weiss, who is the "audit committee financial expert" as defined by the
rules and regulations of the U.S. Securities and Exchange Commission. The Audit
Committee held three meetings during the year ended December 31, 2004.
Approval by the audit committee and/or the board is required for such
matters as: (i) certain transactions to which the company intends to be a party
and in which an Officer, a controlling shareholder and/or certain other parties
(including affiliates of the aforementioned) have a direct or indirect personal
interest, (ii) actions or arrangements which could otherwise be deemed to
constitute a breach by an Officer of his or her fiduciary duty to the company,
(iii) arrangements with directors as to the term of their service, (iv)
arrangements with the controlling shareholder or its relatives as to the term of
their service and/or employment (v) indemnification and/or exemption and/or
insurance of Officers and/or holding such Officers harmless, and (vi) certain
transactions defined in the Israeli Companies Law as extraordinary transactions
(a transaction which is not in the ordinary course of business or is not at
market conditions, or a transaction which is likely to have a material impact on
the profitability, property or obligations of the company).
- 6 -
Arrangements with directors regarding their service (including their
indemnification and/or insurance and/or their being exempt), extraordinary
transactions between a public company and controlling shareholders, a private
placement as a result of which a shareholder becomes a controlling shareholder,
or a private placement to a principal shareholder (a holder of 5% or more of a
company's issued share capital or voting rights) or due to which a shareholder
will become a principal shareholder of at least 20% of the voting rights in the
Company before such placement, the consideration for which is not in cash or not
in traded securities or not in fair market value and, in certain circumstances,
the matters enumerated above, may also require the Audit Committee and/or the
Board shareholder approval.
Directors with respect to whom the foregoing matters are brought for Board
of Directors or Audit Committee approval are not entitled to be present during
discussions of, nor to participate in the vote for approval of, such matters at
Board and/or Audit Committee meetings, unless a majority of Audit Committee or
Board members, as the case may be, have a personal interest in such matter or
the matter involves non-extraordinary transactions between the company and
either a Director or a third party in which a Director has a personal interest.
The Companies Law further provides that in the event that a majority of board
members have a personal interest in such a matter, it also requires shareholder
approval.
INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
ALLOCATION OF MANAGEMENT TIME AND INTERESTS
As of April 1, 1997, the Company and Willi-Food Investments Ltd. entered
into an agreement pertaining to the allocation of corporate opportunities, which
may arise from time to time. The agreement provides that Willi-Food Investments
will make available and provide a right of first refusal to the Company with
regard to any corporate opportunity offered to Willi-Food Investments Ltd. which
relates to the food business.
On March 31, 2003, the Board of Directors of the Company authorized
Willi-Food Investments Ltd. to participate in an import license lottery,
provided that Willi-Food Investments Ltd. agrees that if it wins an import
license it will: (i) coordinate with the Company the items of merchandise to be
imported using the import license; (ii) in consideration for the transfer of the
merchandise that is imported using the import license, the Company will sell the
merchandise, retaining 20% of the selling price for itself and transferring the
balance, if any, to Willi-Food Investments Ltd. In 2004, the amount retained by
the Company pursuant to this arrangement was NIS 453.2 thousand (USD 105.2
thousand). The Board of Directors of the Company determent that the said
arrangement is not an extraordinary transaction.
Mr. Joseph Williger serves as the chairman of the Board of Directors of
Willi-Food Investments Ltd. and Mr. Zvi Williger serves as a director and a
general manager of Willi-Food Investments Ltd. Messrs. Joseph Williger and Zvi
Williger own, through companies under their control, approximately 18% and 40%
of Willi-Food Investments Ltd., respectively. Willi-Food Investments Ltd. is the
controlling shareholder of the Company (see "Security Ownership of Certain
Beneficial Owners").
MANAGEMENT SERVICE AGREEMENTS
As of June 1, 1998, the Company entered into certain management services
agreements with certain companies controlled by each of Messrs. Joseph and Zvi
Williger, respectively (collectively, the "Williger Management Companies"),
pursuant to which Messrs. Joseph and Zvi Williger are to provide management
services on behalf of the Williger Management Companies to the Company (the
"Management Services Agreements").
- 7 -
The Management Services Agreements were for a period of four years
commencing on June 1, 1998 (the "Management Services Period"), were
automatically renewed on June 1, 2002 for two years and were automatically
renewed for an additional period of two years in June 2004. The Company had the
ability to terminate the Management Services Agreements only upon 6 months
notice prior to the end of the Management Services Period or any extension
thereof, as the case may be. In the event the Company would have terminated any
of the Management Services Agreements prior to the expiration of the Management
Services Period or any extension thereof, for any reason whatsoever, it would
have been obligated to pay all amounts due under the respective Management
Services Agreements through the expiration of the Management Services Period or
any extension thereof, as the case may be.
Each of the Management Services Agreements provides for monthly services
fees equal to USD 24,500 (excluding VAT) and an annual bonus at a rate of 3% of
the Company's pre-tax annual profits, if such profits are equal to or less than
NIS 3.0 million (approximately USD 0.7 million), or at a rate of 5% if such
profits exceed such level. In the year ended December 31, 2004, the Company paid
an amount of NIS 4.5 million (approximately USD 1.05 million) pursuant to the
Management Services Agreements. The Management Services Agreements further
provide that benefits in general, including the social benefits of Messrs.
Joseph or Zvi Williger, and income tax payments, national insurance payments and
other payments due by employees in respect of their employment, are to be paid
for at the sole expense of the Williger Management Companies. The Williger
Management Companies have undertaken to indemnify the Company with respect to
any claims against the Company with respect to employer/employee relations. In
addition, each of the Management Services Agreements includes confidentiality
and non-competition provisions for the duration of the Management Services
Period.
On May 4, 2005 the Audit Committee and the Board of Directors decided to
amend the Management Services Agreements, which the Company previously entered
into with the Williger Management Companies. Mr. Zvi Williger is Chairman of the
Board and COO of the Company and is considered, for purpose of article 268 of
the Israeli Companies Act 5759-1999 as the controlling shareholder of the
Company. Mr. Joseph Williger is a director and CEO of the Company, and is an
interested party in the Company and brother of Mr. Zvi Williger.
The amendments were approved unanimously by the Audit Committee and the
Board of Directors and Messrs. Zvi Williger and Joseph Williger did not
participate in the meetings of the Audit Committee and the Board of Directors.
The negotiations between the Company and Messrs. Zvi Williger and Joseph
Williger regarding the provisions to be amended in the Management Services
Agreements were conducted on behalf of the Company by Mr. David Weiss (serving
as an external director of the Company) and Ms. Rachel Bar Ilan (serving as an
External Director of the Company), and by Mr. Eli Erlich and Ms. Sigal Greenbaum
(serving as External Directors of Willi-Food Investments Ltd.) and Mr. Shlomo
Kleinman (serving as a Director for Willi-Food Investments Ltd.).
The Management Services Agreements were amended as follows:
(a) The term of the Management Services Agreements were extended
indefinitely, subject to clauses (b), (e) and (f) below.
(b) Each of the parties to the Management Services Agreements may
terminate the agreement at any time, and for any reason, by prior
written notice which will be delivered to the other party as follows:
o The Company may terminate the agreement at any time, and for any
reason, by prior written notice of at least 18 months.
o The Williger Management Company may terminate the agreement at
any time, by prior written notice of at least 180 days.
(c) The Company may waive receiving actual management services from the
Williger Management Company during the prior notice period, but this
will not eliminate its obligation to continue paying the Williger
Management Company the management fees owed to the Williger Management
Company until the termination of the prior notice period.
- 8 -
(d) If it is a Williger Management Company which terminated the Management
Services Agreement, the Williger Management Company will be entitled
to receive the management fees for a period of six (6) months, which
shall begin after the prior notice period, whether or not it provides
the Company with any management services during that 6-month period.
(e) In the event the Williger Management Company provides the management
services to the Company without the presence of Messrs. Zvi Williger
or Joseph Williger, as the case may be, and/or in the case of the
death and/or permanent disability of Messrs. Zvi Williger or Joseph
Williger, the Company will be entitled to terminate the Management
Services Agreement immediately.
(f) Both Messrs. Zvi Williger and Joseph Williger have agreed with the
Company that if a liquidation order or receivership order is issued
against a Williger Management Company which prevents the Williger
Management Company from continuing to provide the management services
according to the Management Services Agreement, they will immediately
commence working for the Company in return for pay and social benefits
costing the Company the same amount as the monthly management fees
that the Company paid the management company to that date, or
alternatively, at their sole discretion, shall begin providing the
Company with management services via another company owned and
controlled by them under the conditions of the Management Services
Agreement.
(g) In addition, the Management Services Agreements contain provisions
regarding the Company providing vehicles for the use of Messrs. Zvi
Williger and Joseph Williger, and regarding full reimbursement (of an
unlimited sum) of expenses incurred by Messrs. Zvi Williger and Joseph
Williger while providing the management services to the Company,
including reasonable lodging and travel expenses in Israel and abroad,
phone expenses in their home and mobile phone expenses, including
calls abroad related to providing the management services to the
Company, subject to providing receipts.
(h) Messrs. Zvi Williger and Joseph Williger were previously employees of
the Company and were, according to their original employment
contracts, entitled to the abovementioned benefits that are now
accorded to the Williger Management Companies. Furthermore, in 1998
the Audit Committee, the Board of Directors and the General Meeting of
the Shareholders of the Company authorized changes in the terms of
employment of Messrs. Zvi Williger and Joseph Williger such that they
ceased being employees of the Company and began providing management
services to the Company via their management companies in return for
receiving management fees equal to the cost of employing them by the
Company prior to the change. However, an error occurred in the
Management Services Agreements and the provisions detailed above in
subsection (g) were omitted from it, but these benefits were not taken
into account when calculating the cost to the Company of employing
Messrs. Zvi Williger and Joseph Williger prior to the abovementioned
change, and therefore were not included in the management fees to
which their management companies were entitled according to the
Management Services Agreement. Despite the omission from the
Management Services Agreement, the Company continued, in practice, to
provide Messrs. Zvi Williger and Joseph Williger with vehicles for
their use and reimburse them for their expenses according to
subsection (g) above.
In August 2000, the Company entered into an employment agreement with Mr.
Gil Hochboim, pursuant to which Mr. Hochboim has agreed to serve as the Chief
Financial Officer of the Company. The agreement provides for a monthly salary of
NIS 22,000 (approximately USD 5,100). In addition to this salary, Mr. Hochboim
also receives the benefits customarily provided by the Company to its senior
employees, including bonuses and the use of a vehicle.
- 9 -
SERVICES TO WILLI-FOOD INVESTMENTS LTD.
The Company has been providing certain services to Willi-Food Investments
Ltd. on an on-going basis since the Company's commencement of operations,
including office space and certain management, financial and administrative
services. On April 1, 1997, the Company entered into a service agreement with
Willi-Food Investments, which become effective as of May 19, 1997, the effective
date of the Company's initial public offering. Pursuant to this agreement,
Willi-Food Investments Ltd. is entitled to manage its operations from the
Company's executive offices in Yavne, including use of office facilities.
The Company also agreed to provide Willi-Food Investments Ltd. with
accounting and secretarial services. In consideration for the use of the
Company's facilities and such other services, Willi-Food Investments Ltd. agreed
to pay the Company a monthly fee equal to NIS 5,350 (USD 1,242), plus VAT. This
fee is payable quarterly and is linked to the Israeli Consumer Price Index. The
agreement is for an unlimited term, mutually terminable upon three months prior
notice. The Company believes that the fees for these services and the terms of
such agreement are no less favorable to it than could be obtained from an
unaffiliated third party.
GUARANTEES AND PLEDGES
The Company guarantees, without limitation as to amount and for an
unlimited period of time, the obligations of its wholly-owned subsidiary,
W.F.D., to the United Mizrahi Bank Ltd. As of December 31, 2004, W.F.D. had no
obligations to United Mizrahi Bank Ltd.
The Company also guarantees, without limitation as to amount and for an
unlimited period of time, the obligations of its wholly-owned subsidiary, Gold
Frost, both to bank Leumi Le'Israel Ltd. and to the United Mizrahi Bank Ltd. As
of December 31, 2004, Gold Frost had no obligations to such banks.
Pursuant to a debenture issued to each of Bank Leumi Le'Israel, Bank
Mizrahi Ltd. and Bank Hapoalim Ltd., the Company has pledged all of its assets
(including its outstanding share capital and good will of the Company) in favor
of such banks to secure the Company's obligations or those obligations incurred
by the Company jointly with third parties, including obligations with respect to
letters of credit with the Company's suppliers. Bank Leumi Le'Israel, Bank
Mizrahi Ltd. and Bank Hapoalim Ltd. have agreed among them that their security
interests in the Company's assets under such debentures shall rank PARI PASSU.
FACILITIES
The Company's principal executive offices are situated at a leased facility
in the northern industrial zone of Yavne, at 3 Nahal Snir St., Northern
Industrial Zone, Israel, 35 km south of Tel-Aviv. These premises serve as the
Company's logistic center for the warehousing and distribution of food products.
The Yavne facility is leased by the Company from Titanic Food Ltd., a private
Israeli company controlled by Messrs. Joseph Williger, the Company's Chief
Executive Officer and a director, and Zvi Williger, the Company's Chief
Operating Officer and Chairman of the Board (the "Current Lease"). The Current
Lease, which was for a period of two years expiring on January 14, 2001, was
extended three times, for an additional period of six years, until January 14,
2007. This facility, a four-story building plus a basement, consists of
approximately 5,387 square meters (approximately 48,500 square feet). The
monthly rental fee (excluding VAT) for this facility is USD 35,886. The rent is
payable in advance on a quarterly basis. The Company believes that the terms of
the Current Lease are no less favorable to it than could be obtained from an
unaffiliated third party
- 10 -
The Board of Directors and the Audit Committee of the Board of Directors of
the Company approved on March 29, 2004 an engagement with Titanic Food Ltd.
regarding an eight-year lease, divided into two terms of four years each, plus
two option terms of four years each on an alternative facility (the "Proposed
Lease"). According to this agreement, the Company will rent a facility from
Titanic Food Ltd., which will replace the present leased facility and the need
for the warehouse in Ashdod As discussed below, in light of the decision to
purchase the parcel of real estate from Titanic Food Ltd. instead of leasing it,
the Company decided to cancel the Proposed Lease.
On May 25, 2005 the Board of Directors and the Audit Committee of the Board
of Directors of the Company approved an agreement with Titanic Food Ltd., an
affiliate of the Company ("Titanic"), regarding the purchase by the Company from
Titanic of a parcel of real estate; 18.5 square kilometers situated in the
northern industrial zone of Yavne, on which the Company intends to build a new
logistic center on about 8,600 square meters. Titanic is a company solely owned
by Messrs. Zvi Williger and Joseph Williger. The new logistic center will
replace the Company's current logistic center (which the Company rents from
Titanic), and will spare the Company the expense of using storage services in
warehouses far from the current logistic center. Furthermore, the new logistics
center should better suit the Company's operational needs.
It should be pointed out that while completing the construction of the new
logistics center (not yet begun), the Company is to move out of the present
logistics center and return it to Titanic. The Current Lease for the present
logistics center ends in January 2007. It is expected to take a year and a half
to build the new logistics center. If constructing the new logistics center ends
before the end of the Current Lease of the present logistics center, Titanic has
agreed to shorten the Current Lease term of the present logistics center
accordingly, without receiving any recompense for shortening the Current Lease
term, if it is indeed shortened. Alternatively, if the construction of the new
logistics center ends after the termination of the Current Lease for the present
logistics center, Titanic has agreed that the Current Lease will be extended
until the completion of the construction of the new logistics center and under
the same terms the present logistics center is being rented today ($35,886 a
month).
In connection with the purchase of the parcel of real estate, the Company
will pay Titanic the costs which Titanic has had so far regarding the parcel of
real estate, which consist of the cost of purchasing the rights for the parcel
of real estate from the Israel Land Administration, payments to Industrial
Buildings Ltd. for development and other expenses incurred in planning the new
logistic center. In addition to the abovementioned costs the Company will pay
Titanic interest on its costs at the prime rate (as defined by the Bank of
Israel - now 5% annually), which will be calculated from the date of each
expense incurred by Titanic. Accordingly, Titanic will not profit from the
transaction, and only its costs already incurred and carrying costs shall be
paid to it by the Company. It has also been agreed by Titanic and the Company
that all expected expenses for completing the planning of the contemplated
development up to the date of the Company's annual meeting of shareholders will
be incurred by the Company. If such expenses are not authorized by the
shareholders as mentioned above, Titanic shall reimburse the Company for these
expenses.
It is estimated that the Company shall pay Titanic approximately NIS
10,305,000 (about USD 2,300,000) (the "Price to Titanic") with interest at the
prime rate until date of actual payment. The Company estimates that the costs of
constructing the logistic center's building, apart from the Price to Titanic and
apart from purchasing designated equipment, should amount to about USD
5,400,000.
Messrs. Zvi Williger and Joseph Williger did not participate in the
meetings of the Audit Committee and the Board of Directors regarding this
transaction. The negotiations between the Company and Titanic were conducted for
the Company by Mr. David Weiss (serving as an External Director of the Company)
and Ms. Rachel Bar Ilan (serving as an External Director of the Company), and by
Mr. Eli Erlich (serving as External Directors of Willi-Food Investments Ltd.)
and Mr. Shlomo Kleinman (serving as a Director of Willi-Food Investments Ltd.).
The Audit Committee and Board of Directors' reasons for authorizing the
purchase of the parcel of real estate were as follows:
A. The Company's current logistic center does not suit the Company's
operational needs, as it is too small to contain the entire inventory
of the Company. The Company must, therefore, currently spend large
sums every month on storage services in warehouses situated far from
its current logistic center and incur the expense of transportation
from these warehouses to the current logistic center.
- 11 -
B. Therefore, the Company requires a new logistics center, which will
fulfill its future needs, will better fit its operational needs and
will enable it to better develop it business.
C. The expected depreciation costs for constructing the new building
(about USD 130,000 annually) will constitute significant savings in
comparison to the current annual costs for rent, storage and transport
for the Company (about USD 850,000).
D. The Company has the funds necessary for purchasing the parcel of real
estate and constructing the logistic center without the need for
external funds. Presently, the Company invests its excess cash flows
in conservative financial investments yielding a significantly lower
yield than the expected savings on rent and storage expenses.
E. The purchase of the parcel of real estate and the construction of the
new logistics center will increase the Company's fixed assets and
ensure greater stability and continuation compared with a situation in
which it rents the current logistics center by lease, more so since
the Current Lease for the current logistics center ends in January
2007.
F. The Price to Titanic reflects Titanic's costs plus interest at the
prime rate. The Price to Titanic is also lower than the appraised
value of the parcel, which is USD 2,400,000, according to an
appraiser's opinion, dated April 19, 2005, presented before the Audit
Committee and the Board of Directors. The appraiser's opinion was
written by Mr. Ilan Baram, a licensed Land Valuer in Israel.
PROPOSAL NO. 2 TO RE-APPOINT INDEPENDENT AUDITORS
At the Meeting, the shareholders will be asked to reappoint Deloitte &
Touche - Brightman, Almagor & Co. CPA (ISR), Independent Accountants,
("Almagor") as independent auditors of the Company to serve until the annual
general meeting of the Company's shareholders for the year 2005, and to
authorize the Audit Committee of the Board of Directors to determine their
remuneration. A representative of Almagor will attend the Meeting and will
respond to appropriate questions. Almagor served as the Company's independent
auditors for the year ended December 31, 2004.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE FOR PROPOSAL NO. 2.
PROPOSAL NO. 3 TO RECEIVE AND CONSIDER THE FINANCIAL STATEMENTS OF THE
COMPANY, AUDITORS' REPORT AND DIRECTORS' REPORT
The Company will distribute at the Meeting the Financial Statements, the
Auditors' Report and the Directors' Report for the fiscal year ended December
31, 2004, and present the Company shareholders with certain highlights thereof.
It is proposed that the Auditors' Report, the Financial Statements and the
Directors' Report for the fiscal year 2004 that have been presented at the
Meeting be received and considered by the Shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE FOR PROPOSAL NO. 3.
- 12 -
PROPOSAL NO. 4 TO APPROVE THE COMPLETE RESTATEMENT OF THE COMPANY'S ARTICLES
OF ASSOCIATION
At the Meeting, the shareholders will be asked to approve the complete
restatement of the Company's Articles of Association in order to comply with the
provisions of the Israeli Companies Law, 5759-1999. For a more detailed
discussion regarding this proposal, please see the Section entitled Approval of
Certain Transactions under the Israeli Companies Law above.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE FOR PROPOSAL NO. 4.
PROPOSAL NO. 5 TO APPROVE THE INDEMNIFICATION OF AND ELIMINATION OF LIABILITY
FOR OFFICERS OF THE COMPANY
At the Meeting, the Shareholders will be asked to approve the elimination of the
potential liability to the Company of the Company's officers, including the
Controlling Shareholders (as such terms are defined in the Israeli Companies
Law), which could arise from a breach of the duty of care (except in connection
with Distribution as such term is defined in the Israeli Companies Law) owed to
the Company by such persons in their capacity as Officers, and to approve an
irrevocable indemnification of the Officers by the Company with respect to any
liability or expense paid for by the Officer or that the Officer may be
obligated to pay for, with regard to the matters set forth in the certificate
attached as Exhibit A hereto For a more detailed discussion regarding this
proposal, please see the Section entitled Approval of Certain Transactions under
the Israeli Companies Law above.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE FOR PROPOSAL NO. 5.
PROPOSAL NO. 6 TO APPROVE THE PURCHASE OF A PARCEL OF REAL PROPERTY FROM
TITANIC FOOD LTD., AN AFFILIATE OF THE COMPANY
At the Meeting, the Shareholders will be asked to approve an agreement with
Titanic Food Ltd., an affiliate of the Company, regarding the purchase by the
Company from Titanic Food Ltd. of a parcel of real estate on which the Company
intends to build a new logistic center, at a price equal to the cost incurred
and carrying costs of Titanic Food Ltd. For a more detailed discussion regarding
this proposal, please see the Section entitled Interest of Management in Certain
Transactions-Facilities above.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE FOR PROPOSAL NO. 6.
PROPOSAL NO. 7 TO APPROVE CERTAIN AMENDMENTS TO THE COMPANY'S MANAGEMENT
SERVICE AGREEMENTS
At the Meeting, the Shareholders will be asked to approve certain amendments to
the Company's Management Service Agreements, which the Company previously
entered into with companies which are controlled by Messrs. Zvi Williger and
Joseph Williger and which are affiliates of the Company. For a more detailed
discussion regarding this proposal, please see the Section entitled Interest of
Management in Certain Transactions-Management Service Agreements above.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE FOR PROPOSAL NO. 7.
- 13 -
INFORMATION ABOUT THE COMPANY
Copies of the Company's audited financial statements for the fiscal year
ended December 31, 2004 together with the report of the auditors thereon and the
complete copy of the proposed resolutions shall be available for public
inspection each day between July 6, 2005 until July 13, 2005, between the hours
of 9:00 a.m. - 5:00 p.m. at the Company's offices in 3 Nahal Snir Street,
Northern Industrial Zone, Yavne 81224 Israel.
A copy of the Company's Financial Statements for the year ended December
31, 2004 together with the report of the auditors thereon, will be available
upon request by writing to Mr. Gil Hochboim, G. Willi-Food International Ltd., 3
Nahal Snir Street, Northern Industrial Zone, Yavne 81224 Israel.
OTHER MATTERS
The Board of Directors knows of no other matters to come before the meeting
other than the matters referred to in the Notice of Meeting of Shareholders.
However, if any other matters which are not now known to the Board should
properly come before the Meeting, the proxy will be voted upon such matters in
accordance with the best judgment of the person voting the proxy.
Dated: June 20, 2005 By Order of the Board of Directors
JOSEPH WILLIGER, CHIEF EXECUTIVE OFFICER
- 14 -
EXHIBIT A
CERTIFICATE
1. In this certificate the following terms will bear the meanings assigned
to them as follows:
"Executive" - as defined in the Israeli Companies Law, 5759-1999 (from here on
"the Law").
"Action" - including a decision and/or an omission and/or any implied derivative
thereof or any other derivative thereof including your actions before the date
of this certificate while you served as an executive at G. Willi Food
International Ltd. (the "Company") and/or at its subsidiaries (from here on "the
Subsidiaries").
2. In accordance with the resolution of the Audit Committee from May 4,
2005 and the resolution of the Board of Directors from May 4, 2005, which were
authorized by the annual meeting of shareholders on July 20, 2005, the Company
respectfully informs you that according to article 259 of the Law and article
45.4 of its Articles of Association, the Company hereby exempts you in advance
from any responsibility towards it for damage caused and/or that will be caused
to it if caused and/or will be caused due to breach of your duty of care towards
it in the course of your actions (apart from a Distribution) in good faith
performed as an executive with the Company and/or at the Company's request as an
executive with the Subsidiaries.
3. In accordance with the resolution of the Audit Committee from May 4,
2005 and the resolution of the Board of Directors from May 4, 2005, which were
authorized by the annual meeting of shareholders on July 20, 2005, the Company
respectfully informs you that according to article 260 of the Law and article 45
of its Articles of Association, the Company hereby irrevocably pledges to
indemnify you, subject to any law, for any liability or expense, as detailed
below, which will be imposed upon you and/or which have been set upon you and/or
which you will incur due to actions you will do/have done in the course of being
an executive at the Company and/or at the Company's request, at the
Subsidiaries, and this indemnification shall relate to the events mentioned in
the addendum to this certificate or anything to do with them, directly or
indirectly. The following are the liabilities and expenses:
3.1 A monetary liability imposed upon you in favor of another person
by court judgment, including a judgment as a result of settlement or an
arbitrator's decision approved by a court, providing that the highest sum
of indemnification does not exceed the sum detailed in article 4 below.
3.2 Reasonable litigation costs, including legal fees, which you have
incurred due to an investigation or a proceeding against you by an
authority authorized to conduct an investigation or proceeding, and which
did not result in a criminal indictment against you, but in imposing a
monetary obligation instead of criminal proceedings in an offence which
does not require proof of mens rea. In this clause the phrases "proceeding
against you by an authority authorized to conduct an investigation or
proceeding, and which did not result in a criminal indictment against you"
and "monetary obligation instead of criminal proceedings" shall be
interpreted in accordance with article 260(a)(1 a) of the Law, as the same
may be amended from time to time.
3.3 Reasonable litigation costs, including legal fees, which you will
incur or be ordered to pay by a court of law, in proceedings instigated
against you by the Company or any of the Subsidiaries or on their behalf or
by another person in a criminal proceeding in which you are found not
guilty.
In this article 3, "another person" shall include a claim filed against an
executive by way of a derivative claim.
4. Despite the abovementioned in article 3, the Company's pledge to
indemnify you is dependent and limited on these:
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4.1 The total and cumulative sum for which the Company will be liable
according to article 3, together with the indemnification sums resulting
from the cause which is the object of article 3 according to the other
indemnification certificates awarded and/or will be awarded for this matter
to executives of the Company and to Company employees serving or who shall
serve at the Company's request as executives in other companies (in
addition to sums received from insurance companies, if received, as part of
insurance for executives which the Company has purchased, from here on "the
Insurance") for all the executives of the Company, for one or more of the
events detailed in the addendum to this certificate, will not exceed a sum
equal to 25% of the Company's equity according to the last financial
statements audited prior to the time of indemnification. In order to remove
doubt, it is made clear that the Maximal Indemnification Sum according to
this certificate will apply beyond any sum paid, if and to the extent paid,
by insurance and/or indemnification by anyone else apart from the Company.
4.2 If and to the extent that the total sum of the indemnification
fees that the Company is required to pay due to the cause which is the
subject of article 3 exceeds the Maximal Indemnification Sum or the
remainder of the Maximal Indemnification Sum (which exists at that time),
the Maximal Indemnification Sum, or its remainder as the case may be, will
be divided among the executives entitled to indemnification, so as the
indemnification sum each of the executives will actually receive shall be
calculated according to the ratio between the indemnification sum due to
each of the executives and the cumulative indemnification sum due to all
the executives.
4.3 In the event of an incident which may entitle you to
indemnification according to the above, the Company shall supply you from
time to time with the necessary funds required for covering the expenses
and other different payments concerning that legal matter, including for
investigation proceedings, so that you are not required to pay or fund them
yourself, subject to the conditions and stipulations of this
indemnification certificate.
5. The commitment to indemnification as in articles 3 and 4 above is
dependent on all of the following conditions:
5.1 You will notify the Company of every legal proceeding (from here
on "Proceeding") brought against you, regarding any incident which may
activate the indemnification and of every fear or threat that a Proceeding
will be brought against you, and this with due haste after it has first
become known to you, and will immediately pass on to the Company, or to
whom the Company directs you, any document handed to you regarding the
Proceeding.
5.2 Subject to not being contradictory to the insurance terms, the
Company shall be entitled to take upon itself the assignment of your
defense at the Proceeding and/or commission any attorney the Company
chooses for this purpose the said assignment, apart from an attorney not
acceptable to you for reasonable reasons, this while fulfilling all of the
following reservations:
A.The Company shall state within 45 days from receiving the notice as
said in article 5.1 above and/or a shorter period (if necessary for
submitting a plea of defense or your response to the Proceeding) that it
will indemnify the holder of the certificate of indemnification according
to that certificate;
B. The legal Proceeding against the bearer of the certificate of
indemnification shall include only a claim for monetary damages. The
Company and/or the said attorney will be entitled to act on this assignment
on their sole discretion and bring the said Proceeding to an end; the said
appointed attorney will act and owe allegiance to the Company and to you.
If a conflict of interests between you and the Company arises, the lawyer
shall declare so, and you shall be entitled to hire an attorney on your
behalf, and the articles of this certificate of indemnification shall
pertain to expenses you shall have for the said assignment. If the Company
chooses to compromise on a monetary obligation or have the matter decided
on by way of arbitration on a monetary obligation, it shall be entitled to
do so, providing the suit against you or the threat of a suite against you
is fully removed as said in article 5.1 above. At the Company's request,
you shall sign any document authorizing it and/or any said attorney to
handle your defense on your behalf in that Proceeding and represent you in
all related respects, according to the abovementioned.
- 16 -
5.3 You shall cooperate with the Company and/or with any said attorney
in any reasonable way required from you by any of them in connection with
their assignment of the Proceeding, providing the Company covers all of
your related expenses so that you are not required to pay or fund them
yourself, all subject to the content of article 4 above.
5.4 Whether the Company acts in accordance with the content of article
5.2 above or not, it will see to covering all the expenses and other
different payments mentioned in article 3, so that you are not required to
pay or fund them yourself, and this not detracting from the indemnification
provided to you according to the content of this certificate, all subject
to the content of article 4.
5.5 Your indemnification regarding any legal proceeding against you,
as specified in this certificate, will not take effect regarding any sum
due from you as a result of a compromise or arbitration, unless the Company
agrees in writing to that compromise or to performing the arbitration, as
the case may be. The Company shall not refuse that compromise or performing
the arbitration, as the case may be, for unreasonable reasons.
5.6 The Company shall not be required to pay according to this
certificate funds actually paid to you or for you or instead of you in any
way through insurance (which the Company purchased) or any pledge for
indemnification on anyone's behalf apart from the Company. In order to
remove doubt it is made clear that the indemnification fee according to
this certificate will apply beyond (and in addition to) any sum paid (if
and to the extent paid) by said insurance and/or indemnification.
5.7 Upon your request for payment in connection with any incident
according to this certificate, the Company shall perform all necessary
actions required by law for the payment, and will work towards arranging
any permit required for it, if required, including a court authorization,
if and to the extent required.
6. The Company's commitments according to this certificate shall remain in
your favor after the termination of your office with the Company as well,
providing that the activities for which the indemnification pledge is given were
done and/or will be done during your term of office as an executive with the
Company or with any of the Subsidiaries.
7. In the event that the Company pays you or instead of you any sums
according to this certificate regarding a Proceeding, and it later on turns out
that you are not entitled to indemnification from the Company for those sums,
these sums shall be viewed as a loan given to you by the Company, which shall be
linked to the consumers' price index, and you shall be obligated to return these
sums to the Company upon written demand from it to do so, and according to an
installment arrangement the Company sets.
8. The Company's obligations according to this certificate of
indemnification shall be interpreted widely and in a way aimed at fulfilling
them, as permissible legally, for the purpose they were meant. In the event of a
contradiction between any provision of this certificate of indemnification and a
legal stipulation which cannot be waived, amended or added to, the legal
stipulation shall prevail, however this shall not harm or detract from the
validity of the other provisions of this certificate of indemnification.
9. The addendum to this certificate of indemnification constitutes an
inseparable part of it.
Respectfully,
G. Willi-Food International Ltd.
I hereby confirm receipt of this certificate and certify my consent to its
terms.
Full name: _________________________________
Signature: _________________________________
- 17 -
Addendum: Types of Events Referenced in Article 3 above
These addenda are an inseparable part of the attached Certificate.
1. Offer, issuing and self purchase of stock by the Company or by a
subsidiary or by a related company (from here on "the Company") or by a
shareholder in the Company including, but without detracting from the generality
of the above, offering stock to the public by prospectus or another way, a
private offer, or offering stock in any other way.
2. An event occurring due to the Company being a public company or from its
shares being offered to the public or from its shares being sold on the stock
exchange or that its shares sold on Nasdaq.
3. Events connected with the Company's investing in certain corporations,
before, during and after performing the investment, during the contact, the
signature, development and follow up, including activities done on behalf of the
Company as director, executive, employee or observer at the Board of Directors
at the corporation in which the investment is performed and including in
connection with selling the said investment.
4. A transaction as defined in article 1 of the Act including transferring,
selling or purchase of assets or liabilities, including stock or right or
receipt of rights in each, including a purchase offer of any kind or merger of
the Company with another entity, and also other transactions in stock issued by
the Company, all whether the Company is party or not party to it.
5. An action connected to issuing licenses and permits, including, but not
detracting from the generality of the above, permits and/or exemptions regarding
antitrust and/or import licenses.
6. Actions related directly or indirectly to employer-employee relations in
the Company, including concerning terms of employment, promotion of employees,
dealing with pension arrangements, insurance and savings funds, awarding stock
and other benefits.
7. Actions related directly or indirectly to the Company's trade relations,
including external contractors, agents, clients, suppliers and service
providers, including but without detracting from the generality of the above,
concerning awarding or receiving credit.
8. Actions relating to reports or notifications presented by law by the
Company and/or by companies controlled by the Company, including but not
detracting from the generality of the above, the Companies Act or the Stock Law
including bylaws enacted in accordance with them, or according to rules or
regulations customary at the stock exchange and or in another organized exchange
in Israel or abroad according to the tax laws applicable to the Company.
9. Any claim or demand submitted by a third party suffering from physical
injury or damage to a business or a personal asset including the loss of use of
it during any action or omission attributed to the Company, or to its employees,
agents or other people working or claiming to work on behalf of the Company.
10. Transferring information required or permitted by law to be transferred
to companies with interest in the Company.
11. Actions in connection with voting rights in held companies.
12. Any action resulting in not arranging proper insurance policies.
13. Actions connected with submitting tender offers and/or franchises
and/or licenses of any kind and sort.
ATTACH IND. CERT. AS EXHIBIT A TO PROXY STATEMENT
- 18 -
G. WILLI-FOOD INTERNATIONAL LTD.
THIS PROXY IS SOLICITED FROM HOLDERS OF THE ORDINARY SHARES
ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of G. WILLI-FOOD INTERNATIONAL LTD. (the "Company")
does hereby appoint Messrs. Joseph Williger and Zvi Williger and each of them
severally, each with full power of substitution and revocation, to vote all of
the Ordinary Shares of the Company which the undersigned is entitled to vote at
the Annual Meeting of Shareholders of the Company to be held on July 20, 2005,
and at any adjournment thereof, upon:
1. Election of Messrs. Joseph Williger, Zvi Williger and Rachel Bar-Ilan, as
Directors of the Company, each to hold office subject to the Company's
Articles of Association and the Israeli Companies Law.
FOR ALL NOMINEES LISTED BELOW [_] WITHHOLD AUTHORITY [_]
(except as marked to be contrary below) to vote for all nominees listed
below:
Joseph Williger, Zvi Williger and Rachel Bar-Ilan.
INSTRUCTIONS: TO WITHHOLD AUTHORITY FOR ANY INDIVIDUAL NOMINEE, STRIKE OUT
THAT NOMINEE'S NAME FROM THE NAMES PROVIDED ABOVE.
2. Re-appointment of Deloitte Touche-Brightman, Almagor & Co. CPA (ISR) as the
Company's Independent Auditors for the year 2005, to serve until the next
annual general meeting of the Company's shareholders and to authorize the
Audit committee of the Board of Directors to determine their remuneration.
FOR [_] AGAINST [_] ABSTAIN [_]
3. Reception and consideration of the Financial Statements of the Company for
the fiscal year ended December 31, 2004 together with the report of the
auditors thereon and the report of the Board of Directors for such year.
FOR [_] AGAINST [_] ABSTAIN [_]
4. Approval of the complete restatement of the Company's Articles of
Association in order to comply with the provisions of the Israeli Companies
Law, 5759-1999;.
FOR [_] AGAINST [_] ABSTAIN [_]
5. Approval of the elimination of the potential liability to the Company of
the Company's officers, including the Controlling Shareholders (as such
terms are defined in the Israeli Companies Law), which could arise from a
breach of the duty of care (except in connection with Distribution as such
term is defined in the Israeli Companies Law) owed to the Company by such
persons in their capacity as officers, and to approve an irrevocable
indemnification of the officers by the Company with respect to any
liability or expense paid for by the officer or that the officer may be
obligated to pay for, with regard to the matters set forth in the
certificate attached as Exhibit A to the Proxy Statement;
FOR [_] AGAINST [_] ABSTAIN [_]
6. Approval of an agreement with Titanic Food Ltd., an affiliate of the
Company, regarding the purchase by the Company from Titanic Food Ltd. of a
parcel of real estate on which the Company intends to build a new logistic
center, at a price equal to the cost incurred and carrying costs of Titanic
Food Ltd.
FOR [_] AGAINST [_] ABSTAIN [_]
7. Approval of certain amendments to the Company's Management Service
Agreements, which the Company previously entered into with companies which
are controlled by Messrs. Zvi Williger and Joseph Williger and which are
affiliates of the Company.
FOR [_] AGAINST [_] ABSTAIN [_]
And in their discretion with respect to any other matter that may properly be
presented at the Annual General Meeting or any adjournment thereof.
THIS PROXY, WHEN EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDERS. IF NO OTHER DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2, 3, 4, 5, 6 AND 7.
The undersigned hereby acknowledges receipt of a copy of the accompanying Notice
of Annual Meeting of Shareholders and Proxy Statement, and hereby revokes any
proxy or proxies heretofore given:
Date: ______________________________________
Signature: __________________________________
Signature: __________________________________
(PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ABOVE. IF SHARES ARE OWNED IN JOINT
NAMES, EACH JOINT OWNER MUST SIGN. IF SIGNING AS EXECUTOR, ADMINISTRATOR,
TRUSTEE, ATTORNEY OR GUARDIAN, OR AS AN OFFICER OF A CORPORATION OR GENERAL
PARTNER OF A PARTNERSHIP, PLEASE ALSO GIVE YOUR FULL TITLE)
PLEASE SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE
IS NECESSARY IF MAILED IN THE UNITED STATES.