SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
(x) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PEC Israel Economic Corporation
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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) or from Item 22(a)(2) of Schedule 14A.
( ) $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 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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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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PEC ISRAEL ECONOMIC CORPORATION
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 23, 1995
-------------------
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 May 23, 1995 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 18, 1995 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 27, 1995
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 May 23, 1995. 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 18, 1995 are entitled to vote at the
meeting. As of April 18, 1995, 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 27, 1995.
As of April 18, 1995, 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 as directors the
11 nominees named below for the term of one year, and until their respective
successors have been elected and qualified. All of the nominees other than
Messrs. Eliahu Cohen and Alan S. Jaffe are currently serving as Directors of PEC
for terms expiring in May 1995. 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 discretion 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 April 14,
1995.
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NOMINEES FOR ELECTION
<TABLE>
<CAPTION>
NUMBER AND PERCENTAGE OF
SHARES OF PEC COMMON
NAME, PRINCIPAL OCCUPATIONS YEAR FIRST STOCK
DURING LAST 5 YEARS; BECAME A BENEFICIALLY OWNED AS OF
OTHER DIRECTORSHIPS* AGE DIRECTOR APRIL 14, 1995**
- ---------------------------------------------------- --- ---------- ------------------------
<S> <C> <C> <C> <C>
RAPHAEL RECANATI, Chairman, PEC Israel Economic 71 1962 13,193,592 --70.3%(1)
Corporation; 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.
FRANK J. KLEIN, President, PEC Israel Economic 52 1994 1,000
Corporation since January 1, 1995; Director, Elron
Electronic Industries Ltd. and Scitex Corporation
Ltd.; For more than 20 years prior to 1995, an
officer of Israel Discount Bank of New York (Executive
Vice President from December 1985 to December 1994)
ROBERT H. ARNOW, President, Swig, Weiler and Arnow 70 1988 1,900
Mgt. Co., Inc., Real Estate
JOSEPH CIECHANOVER, Chairman, El Al Israel 61 1980 2,000
Airlines Ltd.; Director, IDB Holding and IDB
Development; From 1980 through 1994, President,
PEC Israel Economic Corporation
ELIAHU COHEN, Joint Managing Director of IDB 62 -- -0- (2)
Holding and IDB Development; Director of Discount
Investment Corporation Ltd.
ROGER CUKIERMAN, Chief Executive Officer, La 58 1986 -0-
Compagnie Financiere Edmond de Rothschild Banque;
Managing Director, Isrop Participations Ltd.;
Deputy Chairman, Israel General Bank Ltd.
ALAN S. JAFFE, Partner, Proskauer Rose Goetz & 55 -- -0-
Mendelsohn LLP, Attorneys, counsel to PEC
HERMANN MERKIN, Member, New York Stock Exchange, 87 1966 5,000
Inc. and American Stock Exchange, Inc.; Director,
IDB Holding and Discount Investment Corporation
Ltd.
HARVEY M. MEYERHOFF, Chairman, Magna Holdings, Inc., 68 1985 10,400 (3)
Investments
ALAN S. ROSENBERG, Private Investor; From 1967 65 1992 3,000 (4)
through 1994, Partner, Proskauer Rose Goetz &
Mendelsohn LLP, Attorneys, counsel to PEC
RICHARD S. ZEISLER, Private Investor 78 1949 6,000
</TABLE>
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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. See "Information as to
Share Ownership."
(2) Mr. Cohen owns options to acquire 80,700 Ordinary "A" Shares of NIS 1.00
each of IDB Development, of which one-half are exercisable until May 11,
1997 and one-half are exercisable until May 11, 1998.
(3) Mr. Meyerhoff is the sole trustee of a charitable income trust which owns
25,570 Ordinary "A" Shares of NIS 1.00 each of IDB Development.
(4) 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. and Elron Electronic
Industries Ltd. are or may be deemed to be affiliates of PEC.
** Except as indicated for Mr. Raphael Recanati, none of the nominees
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 April 14, 1995, 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 $.34 on April 14, 1995. As of April 14, 1995, Mr.
Ciechanover beneficially owned 500 Ordinary Shares of IDB Holding, Mr. Cohen
beneficially owned 1,700 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) 19,754,005.4 Ordinary Shares of IDB Holding (52.4% 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 ("IDBL"), 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, who was
chief executive officer of IDBL, and Mr. Eliahu Cohen, who was a member of
senior management of IDBL, are among the defendants found guilty. Mr. Recanati,
Mr. Cohen 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.
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Messrs. Merkin and Recanati 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 1994. 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 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. Merkin and Rosenberg. The Audit Committee held one meeting
in 1994. 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. Klein, Rosenberg and Herbert M. Singer. During 1994, the Pension
Committee held one meeting. Two meetings of the Board of Directors and five
meetings of the Executive Committee of the Board of Directors were held in 1994.
The present members of the Executive Committee are Messrs. Recanati, Klein and
Herbert M. Singer. All members of the Board of Directors, except Messrs. Arnow,
Cukierman and Dov Tadmor, attended during 1994 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.
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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
----------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)
- --------------------------------------------------- ---- ---------- --------- ----------------
<S> <C> <C> <C> <C>
Joseph Ciechanover................................. 1994 525,000 -- 95,097(1)
President 1993 475,000 75,000 424,401(1)
1992 430,000 25,000 472,308(1)
James I. Edelson(2)................................ 1994 185,000 10,000 1,476(3)
Executive Vice President, Secretary and General 1993 170,000 10,000 1,457(3)
Counsel 1992 142,083 10,000 1,437(3)
William Gold(4).................................... 1994 155,000 10,000 1,476(3)
Treasurer 1993 150,000 10,000 1,407(3)
1992 145,000 10,000 1,387(3)
</TABLE>
- --------------
(1) Mr. Ciechanover retired as President of the Company on December 31, 1994. In
connection with Mr. Ciechanover's retirement as President, the Company paid
Mr. Ciechanover in December 1994 an amount equal to two months of salary,
$87,500, for two months of vacation time that he had not taken by the time
of his retirement and the Company is paying him $20,000 per month from
January 1995 through July 1995. The Company paid insurance premiums of
$7,597 in 1994, $7,999 in 1993 and $8,363 in 1992 for term life insurance
for Mr. Ciechanover. 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.
(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. Klein, 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 2% of (a) his average salary for the five
highest consecutive years of credited service preceding retirement or (b)
$150,000 for 1994, whichever is lower, multiplied by the number of years of
credited service and without reduction for Social Security benefits received.
Mr. Klein has 27 years of credited service, all of which is service with a
former affiliated employer (for which he received benefits under that employer's
plan which offset and reduce the payments due under the PEC Plan). Messrs.
Edelson and Gold currently have 3 years and 27 years, respectively, of credited
service.
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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:
AVERAGE ESTIMATED ANNUAL PENSION
PAST BASED ON YEARS OF CREDITED SERVICE AT AGE 65
ANNUAL --------------------------------------------------------
SALARY 10 YEARS 20 YEARS 30 YEARS 40 YEARS
- -------- -------- -------- -------- --------
$125,000 $ 25,000 $ 50,000 $ 75,000 $100,000
150,000 30,000 60,000 90,000 120,000
175,000 35,000 70,000 105,000 140,000
200,000 40,000 80,000 120,000 160,000
225,000 45,000 90,000 135,000 180,000
250,000 50,000 100,000 150,000 200,000
300,000 60,000 120,000 180,000 240,000
350,000 70,000 140,000 210,000 280,000
400,000 80,000 160,000 240,000 320,000
450,000 90,000 180,000 270,000 360,000
500,000 100,000 200,000 300,000 400,000
550,000 110,000 220,000 330,000 440,000
600,000 120,000 240,000 360,000 480,000
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 $120,000). However, under a supplemental arrangement made with Mr.
Klein, he will be entitled to receive a lump sum equivalent of additional annual
benefits equal to 1 1/2% of his average salary and bonus for the five highest
consecutive years of credited service preceding retirement (without any
limitation as to amount) multiplied by the number of years of credited service
reduced by his annual pension under the Employees' Retirement Plan (and further
reduced by retirement benefits from his former employer). For purposes of these
calculations, Mr. Klein's prior service with his former employer is included in
credited service.
BOARD AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
General
The compensation levels for the executive officers of the Company for 1994,
other than bonus amounts, were established by a compensation committee of the
Board of Directors (the "Committee"). The Committee was dissolved in late 1994.
Its members were Raphael Recanati, Chairman, and James S. Crown who are not
current or former employees of the Company. The entire Board of Directors of the
Company established the bonus amounts for the executive officers of the Company
for 1994. The Board of Directors (or a compensation committee of the Board of
Directors if such committee is reconstituted) is responsible for establishing
the levels of compensation in the future for the executive officers of the
Company. The Board of Directors (or the compensation committee, if any) annually
evaluates PEC's compensation paid to its executive officers.
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<PAGE>
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 salaries and bonuses, the Committee and the Board of Directors
considered the recommendations of Mr. Ciechanover, who made compensation
recommendations as to all executive officers except himself, the Committee's and
the Board of Directors' own subjective evaluations of the performance of those
officers, the Company's performance, including enhancement of shareholder value,
and the respective officers' length of service to the Company. In evaluating
performance, the Committee and the Board of Directors emphasized 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 even though such investments may not offer current cash
returns. The Committee and the Board of Directors did not give particular weight
to or quantify any one or more performance factors, but in establishing salaries
and bonuses for 1994 the Committee and the Board of Directors considered the
Company's financial performance 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 successful initial public offerings
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 and the Board of Directors reviewed 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 and
the Board of Directors 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 1994 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 in 1994 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 five years preceding the
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<PAGE>
determination of his compensation, Mr. Ciechanover's 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. Mr. Ciechanover retired as President of PEC at the
end of 1994.
Section 162(m) of the Internal Revenue Code, which became effective January
1, 1994, makes certain non-performance-based compensation to executives of
public companies in excess of $1,000,000 non-deductible to the Company. At this
time, it is not anticipated that any executive officer of the Company will
receive any such compensation in excess of the limit in 1995. Therefore, to
date, the Board of Directors has not taken any action with respect to the new
limit. The Board of Directors 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
Board of Directors:
Raphael Recanati, Chairman Hermann Merkin
Frank J. Klein Harvey M. Meyerhoff
Robert H. Arnow Alan S. Rosenberg
Joseph Ciechanover Herbert M. Singer
James S. Crown Dov Tadmor
Roger Cukierman Richard S. Zeisler
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<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Raphael Recanati was Chairman of the Compensation Committee and 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. Mr. Ciechanover, who was President
of PEC until December 31, 1994, serves as a director of both of these companies
and participated in the deliberations of the Board of Directors of PEC in 1994
concerning the bonus amounts for PEC's executive officers. Mr. Ciechanover did
not receive a bonus in 1994.
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 administrative 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
1994, PEC paid the subsidiary of IDB Development $110,000 under this agreement.
PEC has made investments in and loans to affiliates of IDB Holding.
9
<PAGE>
PERFORMANCE GRAPH
The following graph compares for the five fiscal years beginning January 1,
1990 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 Company Ltd.
(an Israeli company that engages in the development and rental of real estate,
hotel management, insurance and publishing and other commercial media business)
(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 12/31/1989)
S&P 500 Peer
Stock Group
Date PEC Index Index
-------------------------------------------
12/31/89 $100.00 $100.00 $100.00
12/31/90 $112.50 $96.89 $123.92
12/31/91 $252.08 $126.28 $200.78
12/31/92 $464.58 $135.88 $269.80
12/31/93 $520.83 $149.52 $333.40
12/31/94 $475.00 $151.55 $204.02
- ------------
* Assumes that the value of the investment in the Company's common stock and
each index was $100 on December 31, 1989 and that all dividends were
reinvested, except that public trading in the United States of the stock of
Israel Land Development Company 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.
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<PAGE>
INFORMATION AS TO SHARE OWNERSHIP
The following table shows, as of April 14, 1995, the number of shares of PEC
common stock owned by directors who are not nominees for reelection, 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
OWNED AS OF APRIL 14,
NAME OF BENEFICIAL OWNER(1) 1995(2)
- -------------------------------------------- -----------------------
James S. Crown.............................. 3,000
Herbert M. Singer........................... 2,000
Dov Tadmor.................................. -0-
James I. Edelson............................ 1,000
William Gold................................ 1,000
Directors and Executive Officers as a Group 13,229,892--70.5%(3)
- ------------
(1) Messrs. Crown, Singer and Tadmor are directors of the Company and Messrs.
Edelson and Gold are executive officers of the Company.
(2) None of the directors or executive officers listed in the table 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.
(3) Persons who are directors or executive officers have sole power to vote and
direct the disposition of 34,800 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).
The Company's directors and officers are required to file reports with the
Securities and Exchange Commission relating to their ownership of the Company's
common stock. During 1994, Mr. Meyerhoff mistakenly filed four days after the
due date a Form 4, Statement of Changes of Beneficial Ownership of Securities,
covering sales of PEC common stock.
Direct holders of more than 5% of the shares of PEC common stock as of April
14, 1995 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
Yovel Recanati, 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
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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 Yovel Recanati are
the nephew and niece of Raphael and Jacob Recanati. Companies the Recanatis
control hold approximately 52.4% 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.
OTHER MATTERS
Representatives of Arthur Andersen LLP and Haft & Gluckman LLP, who were the
Company's auditors for 1994 and who have been selected as the Company's auditors
for 1995, 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.
1996 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 29, 1995 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 27, 1995
12
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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, Frank J. Klein 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 18, 1995 at the annual meeting of
shareholders to be held on May 23, 1995 or any adjournment thereof.
(continued and to be signed and dated on the reverse side)
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<TABLE>
<S> <C>
1. ELECTION OF DIRECTORS
R. Recanati, F. Klein, R. Arnow, J. Ciechanover, E. Cohen, R. Cukierman, A.
Jaffe, H. Merkin, H. Meyerhoff, A. Rosenberg,
R. Zeisler
FOR ALL WITHHOLD
NOMINEES AUTHORITY to (INSTRUCTION: To withhold authority to vote for any individual nominee write
LISTED (except vote for all that nominee's name on the line provided below.)
as marked to nominees listed
the contrary)
/ / / /
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2. In their discretion, the Proxies This proxy when properly executed will be voted in the manner directed herein by
are authorized to vote upon such the undersigned shareholder. If no direction is made, this proxy will be voted
other business as may properly for the election of the nominees named in Proposal 1. If more than one of said
come before the meeting. 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_____________________________________, 1995
________________________________________________
Signature
________________________________________________
Signature if held jointly
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA Please mark, sign, date and return the Proxy Card promptly
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES" using the enclosed envelope which requires no postage when
mailed in the U.S.A.
</TABLE>
