Pursuant to 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.
INDUSTRIAL DEVELOPMENT BANK
OF ISRAEL LIMITED
Date: July 16, 2007 By: /s/ Michael Warzager
By: /s/ Natan Atlas
INDUSTRIAL DEVELOPMENT BANK OF ISRAEL LTD.
NOTICE OF A SPECIAL GENERAL MEETING
Pursuant to the Companies Law - 1999, the Companies Regulations (Publication of
Notice of a General Meeting and a Class Meeting of a Public Company) - 2000 and
the Securities Regulations (A Transaction between the Company and its
Controlling Shareholder) - 2001, notice is hereby given that a Special General
Meeting of the Industrial Development Bank of Israel Ltd. (hereinafter - THE
BANK") will take place at the Bank's office at 82 Menahem Begin Road, Tel Aviv,
on August 20, 2007 at 11:00 A.M.
THE AGENDA, A SUMMARY DESCRIPTION OF THE PRINCIPALS OF THE TRANSACTIONS AND
THEIR TERMS, AND A SUMMARY OF THE PROPOSED RESOLUTIONS:
1. Approval of the settlement agreement between the Bank and Mr. A. Fin
within the framework of the class action suit and the motion to
approve the class action suit filed by him in Civil File (Tel-Aviv)
2266/02 and Motion File 19002/02 against the Bank, the State of Israel
and Officers of the Bank, in the name of all persons who purchased
shares of the bank beginning from December 1, 2001 until August 22,
2002 ("THE CLAIMANT GROUP"); and this pursuant to the following
a. The amount to be paid to the Claimant Group is NIS 4.7 MILLION
("THE SETTLEMENT AMOUNT").
The Claimant Group shall not include members of the group whom
the court shall approve their request to exclude them from the
applicability of the settlement agreement ("THOSE OPTING-OUT").
b. For the purpose of distributing the Settlement Amount, the amount
of the claim of each member of the group shall be the nominal
amount at which he purchased his shares reduced by the value of
the shares on the stock exchange on the date of the filing of the
class action suit, October 27, 2002 ("THE RECOGNIZED CLAIM
c. The Settlement Amount shall be distributed only among members of
the group who shall file debt claims that are approved ("THE
PARTICIPATING GROUP MEMBERS").
d. 1) At the first stage, the Settlement Amount shall be
distributed among the Participating Group Members, to cover
their Recognized Claim Amounts, pro-rata.
2) If the Participating Group Members shall receive their full
Recognized Claim Amounts in the first stage, then in the
next stage the balance of the Settlement Amount shall serve
to cover linkage differentials and interest pursuant to law,
for the Recognized Claim Amounts of the Participating Group
Members. This distribution shall also be made pro-rata.
3) If afterwards there shall remain a balance of the Settlement
Amount, then the sum of NIS 100,000 from the balance shall
be transferred to a public cause or causes, and any
remainder shall be returned to the Bank.
e. If the total sum of the Recognized Claim Amounts which those
Opting-Out could have filed ("THE TOTAL OPTED-OUT AMOUNT") shall
be NIS 200,000 or greater, a proportionate amount of the
Settlement Amount shall not be distributed among the
Participating Group Members, rather it shall be returned to or
held by the Bank ("THE UNDISTRIBUTED AMOUNT").
f. If some or all of those Opting-Out shall not file a claim against
the Bank, then at the end of the statute of limitations period
the Undistributed Amount shall return and be available for
distribution among the above Participating Group Members as set
forth above. If there is any surplus, it shall be returned to the
g. If the Total Opted-Out Amount shall be NIS 2 million or greater,
or if it can not be reasonably valued, the Bank shall be entitled
to rescind the Settlement Agreement.
h. In addition to the Settlement Amount, the Bank shall bear the
1) Remuneration to the class action plaintiff in the sum of NIS
400,000 plus V.A.T., if applicable.
2) Attorneys' fees of the class action plaintiff in the sum of
NIS 800,000 plus V.A.T.
3) The fee of the examiner who shall be appointed by the court
in order to render his opinion of the settlement.
4) The cost of the notices regarding the settlement in two
5) The sum of $10,000 plus V.A.T., for the fee of the trustee
who shall review the debt claims of the members of the
2. Payment of additional severance payments at the conclusion of service
to the Chairman of the Board of the Bank, Dr. R. Cohen, as follows:
a. Dr. R. Cohen, shall be entitled at the conclusion of his service
at the Bank to additional severance payments at the rate of 100%,
according to a month's salary ("the Monthly Salary" as defined in
his employment contract) for each year of service and the
proportionate part of a month for each part of a year.
b. The additional severance payments shall be paid immediately upon
the conclusion of the service.
c. In regard to the aforementioned:
1. "the Conclusion of Service" is for any reason and at any
time, except resignation prior to the date set pursuant to
the employment contract as the date of the conclusion of the
2. Transfer of control of the Bank shall be deemed "Conclusion
d. The additional severance payments shall be in addition to the
sums that were allocated by the Bank for the Chairman of the
Board to employee's benefit insurance during his term of service.
e. The payment of the additional severance payments shall be subject
to the approval of the Commisioner of Wages and Labor Agreements
in the Ministry of Finance.
THE NAME OF THE CONTROLLING SHAREHOLDER WHO TO THE BEST OF THE KNOWLEDGE OF THE
BANK HAS A PERSONAL INTEREST IN THE TRANSACTION AND THE NATURE OF THIS MATTER
The State of Israel holds 45.78% of the voting rights of the Bank and it
therefore conforms to the definition of "Controlling Shareholder" in Section 268
of the Companies Law - 1999. The State has a personal interest in the approval
of the transaction included in Item no. 1 on the Agenda (the settlement
agreement in the class action suit) stemming from its being a defendant in the
action and in that the settlement agreement also dismisses the actio against it.
THE NAMES OF THE DIRECTORS WHO TO THE BEST OF THE BEST OF THE KNOWLEDGE OF THE
BANK HAVE A PERSONAL INTEREST IN THE ABOVE TRANSACTION AND THE NATURE OF THIS
For the directors R. Armon and A. Olshansky there exists a possible personal
interest in the settlement agreement in the class action suit stemming from
their being defendants in the class action suit and in that the settlement
agreement also dismisses the action against them. The existenec of a personal
interest is not certain and this because the Bank issued in the past an
indemnification letter for the benefit of its officers which is also applicable
to the amounts which the above directors are liable to be charged in the class
THE DETERMINING DATE:
Pursuant to Section 182 of the Companies Law - 1999, the date for determining
the right to vote at the Meeting is July 22, 2007 (hereinafter- "THE DETERMINING
Pursuant to the law, a shareholder in whose name shares are registered with a
member of the Stock Exchange and such shares are included in the shares listed
in the shareholder registry of the Bank in the name of a registrar company ("A
NON-REGISTERED SHAREHOLDER"), shall deliver to the Bank, prior to the convening
of the meeting, a confirmation from the member of the Stock Exchange regarding
his ownership of the share as of the Determining Date (" THE CONFIRMATION OF
OWNERSHIP"). If the shareholder is voting by way of ballot as set forth below,
he must attach the Confirmation of Ownership to the ballot.
THE LEGAL QUOROM:
The legal quorom required to convene the meeting is at least two members
present, in person or by Proxy, holding at least 5,367 Ordinary "A" Shares.
If within thirty minutes from the time fixed for the meeting, there shall not be
a legal quorom, the meeting shall be adjourned for one week, to the same day of
the week, at the same time and at the same place and the meeting shall then take
place with those present.
a. The majority required to adopt the resolution regarding Item No. 1 on
the Agenda (approval of the settlement agreement in the class action
suit) is a simple majority, provided that one of the following
1. the majority of votes at the General Meeting includes at least
one third of all the votes of the shareholders who do not have a
personal interest in the approval of the transaction, who
participate in the vote (abstentions shall not be included in the
total of the votes of the aforesaid shareholders);.
2. the total of opposing votes from among the shareholders said in
paragraph 1) does not exceed 1% of all the voting rights in the
b. The majority required to adopt the resolution regarding Item No. 2 on
the above Agenda is a simple majority.
VOTING BY BALLOT:
a. A shareholder may vote on a resolution on the above Agenda ALSO by way
of a written ballot, as explained as follows.
b. The websites where the written ballots and the position papers, as
defined in Section 88 of the Companies Law - 1999 are as follows: the
website of the Israel Securities Authority: www.magna.isa.gov.il
(hereinafter-"THE WEBSITE") and the website of the Tel Aviv Stock
Exchange Ltd.: www.tase.co.il.
c. Voting by written ballot shall be done on the second part of the
written ballot, as published on the website.
d. A shareholder may request the text of the written ballot and position
papers directly from the bank.
e. A member of the stock exchange shall send, at no charge, by e-mail a
link to the text of the written ballot of the Bank and the position
papers, on the website, to every Non-Registered Shareholder whose
shares are listed with that member of the stock exchange, unless the
shareholder gave notice that he is not so interested, or that he is
interested in receiving ballots by mail for a fee. A notice regarding
receiving ballots shall also apply to receiving position papers.
f. A Non-Registered Shareholder is entitled to receive Confirmation of
Ownership from the member of the stock exchange with whom he holds his
shares, at the branch of the member of the stock exchange or by mail
to his address for the cost of the mailing only, if he so requested.
Such a request shall be given in advance for a specific securities
g. The written ballot must be delivered to the Bank or be sent to it by
registered mail, together with the Confirmation of Ownership (if the
ballot belongs to an Non-Registered Shareholder), or together with a
copy of an identity card, passport or incorporation certificate (if
the ballot belongs to a shareholder registered in the Bank's
shareholder registrar), so that the written ballot together with the
attached documents shall arrive at the Bank's offices (at the above
address) no later than 72 hours prior to the convening of the meeting.
h. The final date to present position papers to the Bank is up to 10 days
after the Determining Date, meaning August 1, 2007.
i. The Bank does not carry out voting by way of the internet.
VOTING BY PROXY
A shareholder may appoint a proxy agent to be present and to vote in his name. A
proxy statement or power of attorney by which such appointment is made, or
copies thereof certified by a notary, must be deposited at the offices of the
Bank at least 48 hours prior to the meeting.
REVIEW OF THE TRANSACTION REPORT, THE TEXT OF THE RESOLUTIONS AND THE BALLOT
The transaction report that was issued by the Bank regarding the General
Meeting, which also contains the full text of the proposed resolutions, and the
ballot can be reviewed at the Magna website of the Securities Authority,
www.magna.isa.gov.il. They, as well as the full text of the proposed resolutions
can also be reviewed at the Bank's offices, at 82 Menachem Begin Road, on
business days, beginning on July 15, 2007, except Fridays, between the hours
09:00-15:00 at the Bank's offices (by prior phone-appointment with the Secretary
of the Bank tel:03-6272796).
BY ORDER OF THE BOARD OF DIRECTORS
N. ATLAS, ADV.