SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (x)
Filed by a Party other than the Registrant ( )
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Check the appropriate box:
(x) Preliminary Proxy Statement
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec.
240.14a-12
PEC Israel Economic Corporation
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(Name of Registrant as Specified in Its Charter)
PEC Israel Economic Corporation
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
(x) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or
14a-6(i)(2).
( ) $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
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2) Aggregate number of securities to which transaction
applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
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4) Proposed maximum aggregate value of transaction:
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* Set forth the amount on which the filing fee is
calculated and state how it was determined.
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( ) Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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JIE-836
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PEC ISRAEL ECONOMIC CORPORATION
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
MARCH 22, 1994
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To the Shareholders of PEC ISRAEL ECONOMIC CORPORATION:
A Special Meeting of Shareholders of PEC Israel Economic Corporation will
be held at 511 Fifth Avenue, 17th Floor, New York, New York on March 22, 1994 at
9:30 A.M., for the following purposes:
To adopt an amendment to the Articles of Incorporation, as amended, that
would increase the authorized common stock from 30,000,000 shares to 40,000,000
shares; and
To consider and act upon such other matters relating to the conduct of such
meeting as may properly come before the meeting or any adjournment thereof.
The close of business on January 28, 1994 has been fixed as the record date
for the meeting and any adjournment thereof. All holders of common stock at such
date will be entitled to vote at the meeting.
By Order of the Board of Directors,
JAMES I. EDELSON,
Executive Vice President and
Secretary
New York, New York
February 8, 1994
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE SPECIAL MEETING. PLEASE
SIGN, DATE AND MAIL YOUR PROXY PROMPTLY WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING.
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PEC ISRAEL ECONOMIC CORPORATION
511 FIFTH AVENUE, NEW YORK, N.Y. 10017
PROXY STATEMENT
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The accompanying form of proxy is solicited on behalf of the Board of
Directors of PEC Israel Economic Corporation ("PEC" or the "Company") for use at
a special meeting of shareholders to be held on March 22, 1994. Proxies in the
accompanying form which are properly executed and duly returned to PEC and not
revoked will be voted as directed. Proxies may be revoked at any time before
they are voted by delivery of a written notice of revocation or a subsequent
proxy, or by announcing such revocation at the meeting.
The only securities which are entitled to vote at the meeting are the
shares of common stock of PEC, each share of which has one vote. Only
shareholders of record at the close of business on January 28, 1994 are entitled
to vote at the meeting. As of January 28, 1994, there were outstanding and
entitled to vote 18,758,588 shares of PEC common stock. This proxy statement is
being distributed to the shareholders commencing on or about February 8, 1994.
No matter may be brought before the special meeting other than the proposal
set forth in the notice thereof and matters relating to the conduct of the
meeting. The cost of preparing this proxy statement and all other costs in
connection with this solicitation of proxies are being borne by IDB Development
Corporation Ltd. ("IDB Development"), the indirect owner of approximately 70.3%
of the outstanding shares of PEC common stock. In addition to the solicitation
of proxies by mail, proxies may be solicited by certain officers and directors
of the Company, for which they will receive no additional remuneration.
As of January 28, 1994, PEC Holdings Limited ("PECH") owned 13,193,592
shares of PEC common stock, representing approximately 70.3% of the outstanding
shares. PECH is a wholly owned subsidiary of IDB Development, approximately 71%
of the voting securities of which are owned by IDB Holding Corporation Ltd.
("IDB Holding").
AMENDMENT TO THE ARTICLES OF INCORPORATION
The Board of Directors recommends that shareholders of the Company adopt an
amendment to the Company's Articles of Incorporation, as amended, to increase
the Company's authorized common stock from 30,000,000 shares to 40,000,000
shares.
IDB Development and PEC desire, among other things, to streamline the
ownership structure of PEC by eliminating PECH and to provide PEC flexibility in
having additional shares of its common stock available for appropriate corporate
purposes. In order to accomplish these objectives, PEC, PECH and IDB Development
have entered into an agreement which provides for PECH to transfer its
13,193,592 shares of PEC common stock to PEC (which will hold them as treasury
shares) in exchange for an identical number of shares of PEC common stock to be
issued by PEC. Immediately after the exchange, which is scheduled to occur in
March 1994 after the special meeting of shareholders, PECH
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<PAGE>
will dissolve and distribute to IDB Development the newly issued shares of PEC
common stock received in the exchange.
The agreement contains customary representations and warranties by PEC as
well as representations and warranties by PECH and IDB Development. The
agreement provides for IDB Development to pay all the expenses of PEC relating
to the exchange, including all of PEC's costs relating to negotiation and
delivery of the agreement, preparing this proxy statement, issuing the new
shares of PEC common stock to PECH, listing the new shares on the New York Stock
Exchange and maintaining the shares of PEC common stock received by PEC in the
exchange as treasury shares. IDB Development agrees to indemnify and hold
harmless PEC and its directors and officers against any loss or liability
arising from PEC entering into the agreement and effecting the transactions
thereunder. The closing of the exchange is subject to certain conditions,
including, among others, the approval of the agreement by the shareholders of
IDB Development and the listing on the New York Stock Exchange of the shares of
PEC common stock to be issued to PECH, subject only to official notice of
issuance. IDB Development has scheduled a meeting of its shareholders on March
8, 1994 to vote on the agreement. PEC has, at IDB Development's expense,
obtained a letter ruling from the Internal Revenue Service which states that PEC
will not incur any federal income taxes as a result of the exchange.
There is currently an insufficient number of authorized but unissued shares
of PEC common stock available to effect the exchange. The Board of Directors has
adopted the proposed amendment to the Company's Articles of Incorporation, as
amended, in order that the Company be able to effect the exchange. Shareholders
must approve the amendment in order for the amendment to be adopted and the
Company to effect the exchange but shareholders will not be requested to vote on
the exchange. If the amendment is adopted by shareholders and the exchange is
effected, the Company will have 18,758,588 shares of outstanding common stock
(the same number of outstanding shares as on the date of this proxy statement),
13,193,592 shares of common stock held in the Company's treasury and 8,047,820
authorized but unissued shares of common stock. The treasury shares and the
authorized but unissued shares, totalling 21,241,412 shares, will be available
in the future for corporate purposes generally without further shareholder
action. The proposed increase in the Company's authorized common stock would
provide shares for future financings and acquisitions and stock dividends, in
each case, if the Board of Directors determines at such time that such action
would be desirable and in the best interests of the Company. The Company has no
plans for future financings or acquisitions using shares of common stock or
for effecting any stock dividends.
Under Maine law, the adoption of the amendment requires the affirmative
vote of the holders of at least a majority of all outstanding shares of common
stock. Although shares of common stock represented by proxies or ballots voting
on the proposed amendment or abstaining from the vote and broker non-votes will
be counted for purposes of determining a quorum, only shares of common stock
represented by proxies or ballots voting for the adoption of the proposed
amendment will be counted for purposes of determining whether a majority of all
outstanding shares of common stock have voted for the proposed amendment. PECH
has agreed to vote, and IDB Development has agreed to cause PECH to vote, PECH's
13,193,592 shares of common stock in favor of the amendment. If shareholders
adopt the amendment, the Company intends to file promptly Articles of Amendment
to its Articles of Incorporation, as amended, to increase its authorized number
of shares of common stock to 40,000,000, regardless of whether the exchange of
common stock between PEC and PECH is effected.
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INFORMATION AS TO SHARE OWNERSHIP
The following chart sets forth the number and percentage of shares of
common stock of PEC beneficially owned by each director and executive officer,
and by all directors and executive officers as a group, as of January 28, 1994.
<TABLE> <CAPTION>
NUMBER AND PERCENTAGE
OF SHARES
NAME OF BENEFICIAL OWNER* BENEFICIALLY OWNED**
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<S> <C>
Raphael Recanati.......................................................... 13,193,592--70.3%(1)
Joseph Ciechanover........................................................ 2,000
Robert H. Arnow........................................................... 1,900
James S. Crown............................................................ 3,000
Roger Cukierman........................................................... -0-
Hermann Merkin............................................................ 5,000
Harvey M. Meyerhoff....................................................... 21,916(2)
Alan S. Rosenberg......................................................... 3,000(3)
George M. Shapiro......................................................... 2,000
Herbert M. Singer......................................................... 2,000
Dov Tadmor................................................................ -0-
Richard S. Zeisler........................................................ 6,000
James I. Edelson.......................................................... 1,000
William Gold.............................................................. 1,000(4)
Directors and Executive Officers as a Group............................... 13,242,408--70.6%(5)
<FN>
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(1) Represents shares of PEC common stock as to which Mr. Raphael Recanati may be deemed to share voting and
dispositive power.
(2) Includes 11,516 shares of PEC common stock owned by a charitable income trust of which Mr. Meyerhoff is the
sole trustee. This charitable income trust also owns 4,057 Ordinary "A" Shares of NIS 1.00 each of IDB
Development.
(3) Includes 1,000 shares of PEC common stock owned by Mr. Rosenberg's wife. Mr. Rosenberg disclaims beneficial
ownership of these shares.
(4) Includes 500 shares of PEC common stock owned by Mr. Gold's wife. Mr. Gold disclaims beneficial ownership of
these shares.
(5) Persons who are directors or executive officers have sole power to vote and direct the disposition of 47,316
shares of PEC common stock (less than 1% of the outstanding shares) and share with other persons the power to
vote and direct the disposition of 13,195,092 shares of PEC common stock (70.3% of the outstanding shares).
* All of individuals listed in the chart are directors except for Messrs. Edelson and Gold who are executive
officers.
** Except as indicated for Mr. Raphael Recanati, none of the directors or executive officers beneficially owns
as much as 1% of the common stock of PEC. Except as indicated for Messrs. Recanati, Rosenberg and Gold, the
amounts shown represent shares as to which the person has sole voting and dispositive power.
</TABLE>
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Direct holders of more than 5% of the shares of PEC common stock as of
January 28, 1994 were as follows:
PEC Holdings Limited.................... 13,193,592 shares (70.3%)
One Portland Square
Portland, Maine 04112
IDB Development, which owns all the outstanding shares of PECH, and IDB
Holding, which owns approximately 71% of the voting securities of IDB
Development, both of which have an address at The Tower, 3 Daniel Frisch Street,
Tel Aviv, Israel, may, by reason of such holdings, be deemed the beneficial
owner of the PEC common stock held by PECH. Accordingly, IDB Development and IDB
Holding may be deemed beneficial owners of an aggregate of 13,193,592 shares, or
70.3% of the outstanding PEC common stock. By reason of their positions with and
control of voting shares of IDB Holding, Messrs. Raphael Recanati, of New York,
New York and Jacob Recanati, of Haifa, Israel, who are brothers, and Leon
Recanati of Tel Aviv, Israel and Judith Recanati Yovel of Herzliya, Israel, who
are brother and sister, may each be deemed to share the power to direct the
voting and disposition of the outstanding shares of PEC common stock owned by
PECH and IDB Development and may each, under existing regulations of the
Securities and Exchange Commission, therefore be deemed a beneficial owner of
these shares. Leon Recanati and Judith Recanati Yovel are the nephew and niece
of Raphael and Jacob Recanati. Companies the Recanati's control hold
approximately 50.6% of the outstanding Ordinary Shares of IDB Holding.
Except for Mr. Raphael Recanati, none of the directors or executive
officers beneficially owns as much as one-tenth of 1% of the shares of IDB
Holding. No other persons are known by the Company to own beneficially more than
5% of the outstanding shares of PEC common stock.
1994 SHAREHOLDERS MEETING
The Board of Directors of PEC will consider proposals intended for
inclusion in the proxy materials relating to the next annual meeting of
shareholders that were submitted to and received at PEC's office not later than
December 29, 1993. These proposals must otherwise comply with applicable laws
and regulations.
By Order of the Board of Directors
JAMES I. EDELSON,
Executive Vice President and
Secretary
New York, New York
February 8, 1994
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PEC ISRAEL ECONOMIC CORPORATION--PROXY
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Raphael Recanati, Joseph
Ciechanover, Herbert M. Singer and James I. Edelson, and each of
them, as Proxies, each with full power of substitution, and
hereby authorizes them to represent and to vote, as designated on
the reverse side, all the shares of Common Stock of PEC Israel
Economic Corporation held of record by the undersigned on January
28, 1994 at the special meeting of the shareholders to be held on
March 22, 1994 or any adjournment thereof.
(continued and to be signed and dated on the reverse side)
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1. ADOPTION OF AMENDMENT TO THE ARTICLES OF INCORPORATION TO
INCREASE THE AUTHORIZED COMMON STOCK FROM 30,000,000 SHARES
TO 40,000,00 SHARES
FOR ADOPTION OF AMENDMENT / /
AGAINST ADOPTION OF AMENDMENT / /
ABSTAIN FROM VOTE / /
This proxy when properly executed will be voted in the manner
directed herein by the undersigned shareholder. If no direction
is made, this proxy will be voted for adoption of the proposed
amendment. If more than one of said proxies or their substitutes
shall be present and vote at said meeting, or any adjournment
thereof, a majority of them so present and voting (or if only one
be present and vote, then that one) shall have and may exercise
all the powers hereby granted.
2. In their discretion, the proxies are authorized to consider
and act upon such other matters relating to the conduct of
said meeting as may properly come before the meeting or any
adjournment thereof.
Please sign below exactly as your name appears. When
shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name by
president or other authorized officer. If a
partnership, please sign in partnership name by
authorized person.
Dated_______________________________________, 1994
__________________________________________________
Signature
__________________________________________________
Signature if held jointly
Please mark, sign, date and return the Proxy Card
promptly using the enclosed envelope which requires no
postage when mailed in the U.S.A.
["Please mark inside blue boxes so that data
processing equipment will record your votes"]
