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:
( ) Preliminary Proxy Statement
(x) 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.
<PAGE>
( ) 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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4) Date Filed:
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PEC ISRAEL ECONOMIC CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 7, 1994
------------------------
To the Shareholders of PEC ISRAEL ECONOMIC CORPORATION:
The Annual Meeting of Shareholders of PEC Israel Economic Corporation will
be held at 511 Fifth Avenue, 17th Floor, New York, New York on June 7, 1994 at
2:00 P.M., for the following purposes:
1. To elect 11 directors for the ensuing year;
2. To transact such other business as may properly come before the
meeting.
The close of business on April 25, 1994 has been fixed as the record date
for the meeting. 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
April 29, 1994
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING. PLEASE
SIGN, DATE AND MAIL YOUR PROXY PROMPTLY WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING.
<PAGE>
PEC ISRAEL ECONOMIC CORPORATION
511 FIFTH AVENUE, NEW YORK, N.Y. 10017
PROXY STATEMENT
------------------------
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
the annual meeting to be held June 7, 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. Under Maine law and the Company's
Articles of Incorporation and By-Laws, if a quorum is present, directors are
elected by a plurality of the votes cast by the holders of the shares present in
person or represented by proxy at the meeting and entitled to vote on the
election of directors. A majority of the outstanding shares entitled to vote,
present in person or represented by proxy, constitutes a quorum. Shares
represented by proxies or ballots withholding votes from one or more directors
will not be counted in the election of that director but will be counted for
purposes of determining a quorum.
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 April 25, 1994 are entitled
to vote at the meeting. As of April 25, 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 April 29, 1994.
As of April 25, 1994, IDB Development Corporation Ltd. ("IDB Development")
owned 13,193,592 shares of PEC common stock, representing approximately 70.3% of
the outstanding shares. Approximately 71% of the voting securities of IDB
Development are owned by IDB Holding Corporation Ltd. ("IDB Holding"). For
information concerning these shareholdings and persons who, by reason of their
relationships to IDB Holding, may also be deemed to be beneficial owners of
these shares, see "Information as to Share Ownership."
ELECTION OF DIRECTORS
At the meeting, management will present a proposal to elect the 11
directors named below for the term of one year, and until their respective
successors have been elected and qualified. All of the nominees are currently
serving as Directors of PEC for terms expiring in June 1994. It is intended
(unless such authority is withheld) that votes will be cast pursuant to proxies
hereby solicited for the nominees named below. If for any presently unknown
reason any of the nominees are unable to serve as a director, another person or
persons who may be nominated will be voted for at the direction of the proxy
holders.
The following chart sets forth certain information with respect to each of
the nominees, including beneficial ownership of PEC common stock as of March 31,
1994.
1
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NOMINEES FOR ELECTION
<TABLE> <CAPTION>
NUMBER AND PERCENTAGE OF
NAME, PRINCIPAL OCCUPATIONS YEAR FIRST SHARES OF PEC COMMON STOCK
DURING LAST 5 YEARS; BECAME A BENEFICIALLY OWNED AS OF
OTHER DIRECTORSHIPS* AGE DIRECTOR MARCH 31, 1994**
- - ----------------------------------------------------------------- ----------- ----------- ------------------------------
<S> <C> <C> <C> <C>
RAPHAEL RECANATI, Chairman, PEC Israel Economic Corporation; 70 1962 13,193,592 --70.3%(1)
President, Finmar Equities Co., Shipping and Finance; Chairman
and Managing Director, IDB Holding and IDB Development;
Chairman, Discount Investment Corporation Ltd.; Director,
Overseas Shipholding Group, Inc.
JOSEPH CIECHANOVER, President, PEC Israel Economic Corporation; 60 1980 2,000
Director, IDB Holding, IDB Development, Discount Investment
Corporation Ltd., Elron Electronic Industries Ltd., Fibronics
International Inc. and Scitex Corporation Ltd.
ROBERT H. ARNOW, President, Swig, Weiler and Arnow Mgt. Co., 69 1988 1,900
Inc., Real Estate
JAMES S. CROWN, General Partner, Henry Crown and Company (Not 40 1985 3,000
Incorporated), Investments; Director, General Dynamics
Corporation and First Chicago Corporation
ROGER CUKIERMAN, Chief Executive Officer, La Compagnie Financiere 57 1986 -0-
Edmond de Rothschild Banque; Managing Director, Isrop
Participations Ltd.; Deputy Chairman, Israel General Bank Ltd.
HERMANN MERKIN, Member, New York Stock Exchange, Inc. and 86 1966 5,000
American Stock Exchange, Inc.; Director, IDB Holding and
Discount Investment Corporation Ltd.
HARVEY M. MEYERHOFF, Chairman, Magna Holdings, Inc., Investments 67 1985 21,916 (2)
ALAN S. ROSENBERG, Partner, Proskauer Rose 64 1992 3,000 (3)
Goetz & Mendelsohn, Attorneys, counsel to PEC
HERBERT M. SINGER, Vice Chairman, PEC Israel Economic 87 1948 2,000
Corporation; Partner, Singer Netter Dowd & Berman, Attorneys
DOV TADMOR, Managing Director, Discount Investment Corporation 65 1980 -0-
Ltd.; Chairman, Scitex Corporation Ltd.; Director, IDB Holding,
IDB Development, Elron Electronic Industries Ltd., Elscint
Limited, Elbit Ltd., Fibronics International Inc., Orbotech
Ltd. and American Israeli Paper Mills Limited
</TABLE>
2
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<TABLE> <CAPTION>
NUMBER AND PERCENTAGE OF
NAME, PRINCIPAL OCCUPATIONS YEAR FIRST SHARES OF PEC COMMON STOCK
DURING LAST 5 YEARS; BECAME A BENEFICIALLY OWNED AS OF
OTHER DIRECTORSHIPS* AGE DIRECTOR MARCH 31, 1994**
- - ----------------------------------------------------------------- ----------- ----------- ------------------------------
<S> <C> <C> <C> <C>
RICHARD S. ZEISLER, Private Investor 77 1949 6,000
</TABLE>
- - ---------------
(1) Represents shares of PEC common stock as to which Mr. Raphael Recanati may
be deemed to share voting and dispositive power. See "Information as to
Share Ownership."
(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.
* IDB Development and IDB Holding are parent companies of PEC. Discount
Investment Corporation Ltd., Scitex Corporation Ltd., Elron Electronic
Industries Ltd., Elbit Ltd., Fibronics International Inc., Orbotech Ltd. and
Elscint Limited are or may be deemed to be affiliates of PEC.
** Except as indicated for Mr. Raphael Recanati, none of the Directors
beneficially owns as much as 1% of the common stock of PEC. Except as indicated
for Messrs. Recanati and Rosenberg, the amounts shown represent shares of PEC
common stock as to which the person has sole voting and dispositive power. Four
nominees for election to the Board of Directors are presently members of the
Board of Directors of IDB Holding. Except for Mr. Raphael Recanati, none of
these four nominees are considered by PEC to share voting and dispositive power
with respect to the shares of PEC beneficially owned by IDB Holding.
As of March 31, 1994, there were 37,666,364 Ordinary Shares of NIS 5.00
each of IDB Holding issued and outstanding. One NIS (New Israel Shekel) was
equivalent to approximately $.33 on March 31, 1994. As of March 31, 1994, Mr.
Ciechanover beneficially owned 500 Ordinary Shares of IDB Holding, Mr. Merkin
beneficially owned 20,865 Ordinary Shares of IDB Holding, and Mr. Recanati may
be deemed to have shared the power to vote or direct the disposition of (and
therefore to have beneficially owned) 19,046,095 Ordinary Shares of IDB Holding
(50.6% of the outstanding Ordinary Shares).
In February 1994, following a lengthy trial in Israel, the four largest
banks in that country, including Israel Discount Bank Limited, and its former
parent IDB Holding, and members of their senior management were found guilty, in
connection with acts that occurred prior to October 1983, of engaging in
fraudulent securities transactions and making false statements within the
meaning of certain provisions of that country's banking, securities and other
laws. The violations involve activities, which terminated in October 1983,
relating to shares of these Israeli institutions. Mr. Raphael Recanati was chief
executive officer of Israel Discount Bank Limited and is among the defendants
found guilty. Mr. Recanati and IDB Holding have categorically denied any
wrongdoing and are appealing. None of the activities in question relate to or
involve PEC or its business in any way.
3
<PAGE>
Messrs. Merkin, Recanati and Singer are members of the Nominating Committee
which recommends persons to the Board of Directors for nomination as members of
the Board of Directors and election as officers of PEC. The Nominating Committee
had one meeting during 1993. The Nominating Committee will consider nominees
recommended by shareholders. Recommendations should be submitted in writing to
the Secretary of PEC prior to December 31 in each year. PEC has a Compensation
Committee of the Board whose principal functions are to determine the salaries,
bonuses and other compensation, if any, to be paid to the officers of PEC. The
present members of the Compensation Committee, which held one meeting in 1993,
are Messrs. Recanati and Crown. PEC also has an Audit Committee of the Board.
The principal functions of the Audit Committee are to recommend the independent
auditors for the Company, review the planned scope and results of audits and
other services performed by the auditors, review the auditors' recommendations
with regard to internal controls of the Company and review and make
recommendations to the Board of Directors with respect to financial and
accounting matters generally. The present members of the Audit Committee are
Messrs. Crown, Merkin and Rosenberg (who became a member in March 1994). The
Audit Committee held one meeting in 1993. PEC also has a Pension Committee of
the Board. The principal functions of the Pension Committee are to administer
the Employees' Retirement Plan of PEC and the investment of its assets. The
present members of the Pension Committee are Messrs. Ciechanover, Rosenberg and
Singer. During 1993, the Pension Committee did not meet. Two meetings of the
Board of Directors and eight meetings of the Executive Committee of the Board of
Directors were held in 1993. The present members of the Executive Committee are
Messrs. Recanati, Singer and Ciechanover. All members of the Board of Directors,
except Messrs. Cukierman, Meyerhoff, Tadmor and George Shapiro, attended during
1993 at least 75% of the meetings of the Board of Directors and the Committees
on which they serve.
Directors of the Company serve in that capacity without compensation.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to, or earned by, the
executive officers of the Company during each of the Company's last three fiscal
years:
SUMMARY COMPENSATION TABLE
<TABLE> <CAPTION>
ANNUAL COMPENSATION
----------------------
SALARY ALL OTHER
NAME AND PRINCIPAL POSITION YEAR ($) BONUS ($) COMPENSATION ($)
- - ---------------------------------------------------------------- --------- --------- ----------- ----------------
<S> <C> <C> <C> <C>
Joseph Ciechanover.............................................. 1993 475,000 75,000 424,401(1)
President 1992 430,000 25,000 472,308(1)
1991 340,000 0 --
James I. Edelson(2)............................................. 1993 170,000 10,000 1,457(3)
Executive Vice President, Secretary and General Counsel 1992 142,083 10,000 1,437(3)
William Gold(4)................................................. 1993 150,000 10,000 1,407(3)
Treasurer 1992 145,000 10,000 1,387(3)
1991 137,500 15,000 --
</TABLE>
- - ------------------
(1) In December 1991, the Company deposited $1 million in trust to be paid,
together with any earnings on such trust amount, to Mr. Ciechanover if his
employment is terminated by reason of his death or disability, his discharge
by the Company for any reason other than cause, or after his 60th birthday,
his voluntary resignation or retirement. Of the $1 million deposited in
trust, the Company expensed $416,402 in 1993 and $463,945 in 1992. The
Company paid insurance premiums of $7,999 in 1993 and $8,363 in 1992 for
term life insurance for Mr. Ciechanover.
(2) Mr. Edelson became employed by the Company in February 1992.
(3) Represents the amount of insurance premiums paid by the Company for term
life insurance for the named executive.
(4) Mr. Gold became the Treasurer of the Company in February 1992. Mr. Gold was
the Secretary and Assistant Treasurer of the Company from August 1970 to
February 1992.
Messrs. Ciechanover, Edelson and Gold are participants in the Employees'
Retirement Plan of PEC. Under the Employees' Retirement Plan, an employee is
entitled to annual benefits equal to approximately 1 1/2% of (a) his average
salary for the five highest consecutive years preceding retirement or (b)
$235,840 for 1993, whichever is lower, multiplied by the number of years of
credited service and without reduction for Social Security benefits received.
Mr. Ciechanover has 13 years of credited service, including 5 years of service
with an affiliated employer (for which he receives benefits under that
affiliate's plan which offset and reduce the payments due under the PEC Plan).
Messrs. Edelson and Gold currently have 2 years and 26 years, respectively, of
credited service.
5
<PAGE>
The following table sets forth the estimated annual pension payable under
the Employees' Retirement Plan upon retirement at age 65, to employees at
various salary levels and in representative years-of-service classifications:
<TABLE> <CAPTION>
ESTIMATED ANNUAL PENSION
AVERAGE BASED ON YEARS OF CREDITED SERVICE AT AGE 65
PAST ANNUAL ------------------------------------------------
SALARY 10 YEARS 20 YEARS 30 YEARS 40 YEARS
- - ----------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
$ 125,000 $ 18,750 $ 37,500 $ 56,250 $ 75,000
150,000 22,500 45,000 67,500 90,000
175,000 26,250 52,500 78,750 105,000
200,000 30,000 60,000 90,000 120,000
225,000 33,750 67,500 101,250 135,000
250,000 37,500 75,000 112,500 150,000
300,000 45,000 90,000 135,000 180,000
350,000 52,500 105,000 157,500 210,000
400,000 60,000 120,000 180,000 240,000
450,000 67,500 135,000 202,500 270,000
500,000 75,000 150,000 225,000 300,000
550,000 82,500 165,000 247,500 330,000
600,000 90,000 180,000 270,000 360,000
</TABLE>
The annual pension payable to any employee under the Employees' Retirement Plan
may not exceed the limitations imposed for qualified plans under Federal law
(currently $118,800).
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
General
The Compensation Committee of the Board of Directors (the "Committee") is
composed of the two directors listed below this report who are not current or
former employees of the Company. The Committee is responsible for establishing
the levels of compensation for the executive officers of the Company. The
Committee annually evaluates PEC's compensation paid to its executive officers.
Compensation Philosophy
The executive compensation philosophy of the Company is to provide
competitive levels of compensation that reward corporate and individual
performance and assist the Company in attracting, retaining and motivating
highly qualified executives. There is no specific formula pursuant to which any
executive officer's compensation is established or adjusted. In setting
executive officer compensation, the Committee considered the recommendations of
Mr. Ciechanover, who made compensation recommendations as to all executive
officers except himself, the Committee's own subjective evaluations of the
performance of those officers, the Company's performance, including enhancement
of shareholder value, and the officer's length of service to the Company. In
evaluating performance, the Committee emphasizes performance over a period of
several years rather than a single year because PEC's business philosophy is to
acquire interests in companies that have attractive long-term growth potential
rather than in companies that may provide a cash return in the near future. The
Committee does not give particular weight to or quantify any one or more
performance factors, but in establishing salaries and bonuses for 1993 the
Committee considered the Company's increased net income over the past several
years, the superior performance of an investment in the Company's common stock
compared to an investment in the Peer Group Index over the past five years as
shown in the performance graph following this report, the Company's underwritten
public offering of its common stock in 1992 which raised approximately $38
million of additional equity capital, the successful initial public offerings
6
<PAGE>
during the past two years by four companies in which PEC had equity interests
and the many duties performed by the Company's executive officers because of the
Company's small staff.
Components of Compensation
Compensation paid to the named executive officers, as reflected in the
foregoing Summary Compensation Table, consists primarily of base salary and
bonus. The amount of the employee's salary and bonus is a function of the
employee's officer position as well as individual performance and length of
service to the Company. In evaluating the Company's executive compensation
levels, the Committee reviews information drawn from a variety of sources,
including the compensation policies of other companies (which are not included
on the Peer Group Index referred to in the performance graph following this
report) with respect to which members of the Committee are familiar
(particularly companies controlled by IDB Holding), published survey data,
information gleaned from the media, and the Company's own experience in
recruiting and retaining executives.
Benefit Plans
At various times in the past, the Company has adopted certain broad-based
employee benefit plans in which executive officers are permitted to participate
on the same terms as non-executive employees who meet applicable eligibility
criteria. Such plans include savings and investment (Sec.401(k)), retirement and
life and health insurance plans.
Compensation of the President
Mr. Ciechanover's 1993 compensation is based on the same factors as are
described above for all executive officers pursuant to the Company's executive
compensation philosophy. Mr. Ciechanover's increased salary and bonus in 1993
reflects the Company's financial performance over the past several years, the
growth in the market value of the Company's common stock over the past five
years, Mr. Ciechanover's direct contribution to the Company's public offering of
its common stock in 1992, his personal involvement in most of the companies in
which PEC has equity holdings and the Committee's subjective evaluation of Mr.
Ciechanover's contribution to the business and management of the Company.
Omnibus Budget Reconciliation Act Implications for Executive Compensation
It is the responsibility of the Committee to address the issues raised by
the recent change in the tax laws which made certain non-performance-based
compensation to executives of public companies in excess of $1,000,000
non-deductible to the Company beginning in 1994. At this time, it is not
anticipated that any Company executive officer will receive any such
compensation in excess of the limit in 1994. Therefore, during 1993, the
Committee did not take any action with respect to the new limit. The Committee
will continue to monitor this situation and will take appropriate action if it
is warranted in the future.
The report of the Committee shall not be deemed to be "soliciting material"
or incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933, as
amended (the "1933 Act"), or under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
Compensation Committee:
Raphael Recanati, Chairman
James S. Crown
7
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Raphael Recanati, Chairman of the Compensation Committee, is Chairman of
the Company. Mr. Recanati is not an employee of the Company and does not receive
any compensation from the Company. Mr. Recanati is Chairman and Managing
Director of IDB Holding and IDB Development, and Mr. Ciechanover serves as a
director of both of these companies.
IDB Development and a subsidiary of PEC are parties to an agreement under
which IDB Development provides management and advisory services, including
accounting services and obtaining and compiling financial information and
reports, for an annual fee of $130,000. PEC has an agreement with a subsidiary
of IDB Development under which each party provides managerial services to the
other party and offers the other party equal participation in business
opportunities for a fee of 2 1/2% of the equity invested by the paying party in
business opportunities initiated or initially presented by the other party. In
1993, PEC paid the subsidiary of IDB Development $178,000 under this agreement.
In March 1994, PEC, IDB Development and PEC Holdings Limited ("PECH"), a
wholly-owned subsidiary of IDB Development that had held shares of PEC common
stock, effected a tax-free transaction in which PECH transferred 13,193,592
shares of PEC common stock to PEC in exchange for an identical number of shares
of PEC common stock issued by PEC. Following the exchange, PECH dissolved and
distributed to IDB Development the newly issued shares of PEC common stock, as a
result of which IDB Development's ownership of PEC common stock is now held
directly, rather than through PECH. All of PEC's expenses in connection with the
transaction (approximately $200,000) are being paid by IDB Development. The
transaction had no economic effect on PEC or on its outstanding stock. As a
result of the transaction, PEC holds 13,193,592 shares of its common stock as
treasury shares. PEC has made investments in and loans to affiliates of IDB
Holding.
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<PAGE>
PERFORMANCE GRAPH
The following graph compares for the five fiscal years beginning January 1,
1989 the yearly change in the year end stock price of PEC with the cumulative
total return (change in year end stock price plus reinvested dividends) of the
Standard & Poor's 500 Stock Index and an index composed of American Israeli
Paper Mills Limited (an Israeli industrial company), Ampal American Israel
Corporation (an American holding company that acquires interests in companies
located in Israel or related to Israel), Elron Electronic Industries Ltd. (an
Israeli holding company which is an affiliate of PEC that acquires interests in
high technology companies located in Israel or related to Israel), Etz Lavud
Ltd. (an Israeli industrial company) and Israel Land Development Ltd. (an
Israeli real estate development company) (the "Peer Group Index"), all of which
are publicly traded in the United States.
FIVE YEAR CUMULATIVE RETURN*
PEC, S&P 500 STOCK INDEX AND PEER GROUP INDEX
($100 INVESTED ON 12/31/1988)
[PERFORMANCE GRAPH]
12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93
-------- -------- -------- -------- -------- --------
PEC $100 $132 $148 $332 $611 $685
S&P 500 Stock Index $100 $132 $127 $166 $179 $197
Peer Group Index $100 $158 $200 $320 $449 $529
- - ---------------
* Assumes that the value of the investment in the Company's common stock and
each index was $100 on December 31, 1988 and that all dividends were
reinvested, except that public trading in the United States of the stock of
Israel Land Development Ltd., a component of the Peer Group Index, began on
December 4, 1990. The Peer Group Index has been weighted based on market
capitalization. In accordance with rules of the Securities and Exchange
Commission ("SEC"), the Company's performance graph does not constitute
"soliciting material" and is not incorporated by reference in any filings with
the SEC made pursuant to the 1933 Act or the 1934 Act.
9
<PAGE>
INFORMATION AS TO SHARE OWNERSHIP
The following table shows, as of March 31, 1994, the number of shares of
PEC common stock owned by the executive officers named in the Summary
Compensation Table (other than Joseph Ciechanover whose holdings of PEC common
stock are listed under "Election of Directors") and by all directors and
executive officers as a group.
NUMBER AND PERCENTAGE
OF SHARES OF PEC COMMON STOCK
BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED AS OF MARCH 31, 1994
- - --------------------------------------------------- --------------------------
James I. Edelson................................... 1,000(1)
William Gold....................................... 1,000(1)
Directors and Executive Officers as a Group 13,242,408 --70.6% (2)
- - ---------------
(1) None of the executive officers beneficially owns as much as 1% of the
outstanding common stock of PEC. The amount shown for Mr. Gold includes 500
shares of PEC common stock owned by Mr. Gold's wife. Mr. Gold disclaims
beneficial ownership of these shares. Except as indicated for Mr. Gold, the
amounts shown represent shares of PEC common stock as to which the person
has sole voting and dispositive power.
(2) Persons who are directors or executive officers have sole power to vote and
direct the disposition of 47,316 shares (less than 1% of the outstanding
shares of the Company) and share with other persons the power to vote and
direct the disposition of 13,195,092 shares (70.3% of the outstanding
shares).
Direct holders of more than 5% of the shares of PEC common stock as of
April 25, 1994 were as follows:
IDB Development Corporation Ltd............... 13,193,592 shares (70.3%)
"The Tower"
3 Daniel Frisch Street
Tel Aviv, Israel
IDB Holding, which owns approximately 71% of the voting securities of IDB
Development and has the same address as IDB Development, may, by reason of such
holdings, be deemed the beneficial owner of the PEC common stock held by IDB
Development. Accordingly, IDB Holding may be deemed a beneficial owner 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 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
Recanatis control hold approximately 50.6% of the outstanding Ordinary 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.
10
<PAGE>
OTHER MATTERS
Representatives of Arthur Andersen & Co. and Haft & Gluckman, who were the
Company's auditors for 1993 and who have been selected as the Company's auditors
for 1994, are expected to be present at the meeting with the opportunity to make
a statement if they so desire and to respond to appropriate questions.
The Board of Directors of PEC does not know of any other matters to be
brought before the meeting except those set forth in the notice thereof. If
other business is properly presented for consideration at the meeting, it is
intended that the proxies will be voted by the persons named therein in
accordance with their judgment. The cost of preparing this Proxy Statement and
all other costs in connection with this solicitation of proxies for the Annual
Meeting of Shareholders are being borne by PEC.
1995 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. These proposals must be submitted to and received at PEC's office
no later than December 30, 1994 and 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
April 29, 1994
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PROXY PROXY
PEC Israel Economic Corporation
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 April 25, 1994 at the annual
meeting of shareholders to be held on June 7, 1994 or any
adjournment thereof.
(continued and to be signed and dated on the reverse side)
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1. ELECTION OF DIRECTORS
FOR ALL NOMINEES LISTED(except as marked to the contrary)
/ /
WITHHOLD AUTHORITY to vote for all nominees listed
/ /
R. Recanati, J. Ciechanover, R. Arnow, J. Crown, R. Cukierman,
H. Merkin, H. Meyerhoff, A. Rosenberg, H. Singer,
D. Tadmor, R. Zeisler
(INSTRUCTION: To withhold authority to vote for any
individual nominee write that nominee's name on the line
provided below.)
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2. In their discretion, the Proxies are authorized to
vote upon such other business as may properly
come before the meeting.
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 the election
of the nominees named in Proposal 1. 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.
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
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Signature
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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"
