EGM 2007 - Amiad

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The draft letter of appointment has been approved by the audit committee and the board ofdirectors of the Company.Resolution 4 (exemption and indemnification agreements for Mr Treger and MrBenguigui)Shareholders will be invited at the meeting to approve draft exemption and indemnificationagreements for each of Mr Treger and Mr Benguigui. Although not the case for listedcompanies incorporated in England, exemption and indemnification agreements are commonlyentered into by Israeli publicly-traded companies with their directors/other office holders. Thedraft exemption and indemnification agreements are on the same terms and conditions as theexemption and indemnification agreements which the Company previously entered into withother non-executive directors.The draft exemption and indemnification agreements have previously been approved by theaudit committee and the board of directors of the Company.Resolution 5 (extension of D&O insurance policy)This resolution authorises the Company to extend its existing directors’ and officers’ liabilityinsurance policy to cover Mr Treger and Mr Benguigui.Resolution 6 (Option Agreement with Rami Treger)Following the approval of the audit committee and the board of directors of the Company, thisresolution approves the entering into the Option Agreement pursuant to which Mr Treger isgranted options to purchase 54,722 ordinary shares of the Company, subject to the terms andconditions set out in the Option Agreement.Resolution 7 (approval of the terms of a phantom bonus to be paid to Rami Treger)Resolution 7 provides for the approval of the payment of a phantom bonus (the “Bonus”) to MrTreger in an amount produced by the following formula:X = (Y - Z) * A * BWhere:X = the amount of the Bonus in New Israeli Shekels (“NIS”);Y = the average price of the Company's ordinary share on AIM during the month of July 2009;Z = the average price of the Company's ordinary share on AIM during the month of July 2007;A = 97,282;B = the exchange rate of NIS against the Great British Pound as published by the Bank ofIsrael on 1 August 2009 (the “Record Date”).The Bonus will be paid to Mr Treger on August 2009, provided that he is employed by theCompany at the Record Date.Resolution 8 (approval of the terms of the Bonus Scheme)The Company is proposing to introduce the Bonus Scheme which will be available to membersof Senior Management (as defined in the Bonus Scheme), including three members of theboard (Mr Treger, Mr Eder and Mr Heifetz). Following the approval of the terms of the Bonus5753838.13
Scheme by the remuneration and audit committees and the board of directors, the terms ofthe scheme will also need to be approved at this meeting.Resolution 8 therefore provides for the approval of the terms of the Bonus Scheme in the formset out in appendix 1 to this circular.Resolution 9 (approval of the amendment to the human resources servicesagreement with Kibbutz Amiad)Resolution 9 provides for the approval of the amendment to the services agreement datedJune 1998 (as amended) between the Company and Kibbutz Amiad.The amendment has been approved by the audit committee and the board of directors of theCompany and is conditional on, and subject to, the approval of the general meeting of theCompany. Pursuant to the terms of the amendment, a proportion of the bonus pool payable toemployees under the approved Company’s staff bonus will be paid to Kibbutz Amiad inaccordance with the terms of such scheme. All other terms of the services agreement shallremain unchanged. The Company’s staff bonus scheme is enclosed as appendix 2 to thiscircular.Voting requirementsUnder the Companies Law, resolutions 1 to 8 (inclusive) require both the approval of theCompany’s audit committee and board of directors and a vote in favour by shareholdersholding a majority of the shares represented at the meeting, either in person or by proxy, andvoting on the resolution.Resolution 9 requires a special majority in favour in order for the resolution to be validlypassed. Under the Companies Law, a resolution concerning an exceptional transaction of apublic company with its “controlling shareholder” or with another person in whom thecontrolling shareholder has a personal interest requires the approval of the company’s auditcommittee, its board of directors and its shareholders in general meeting provided that, in thecase of the latter approval, either of the following conditions is satisfied:(a)(b)the majority of votes in favour includes at least one-third of the shares of shareholderswho have no “personal interest” in the approval of the resolution and who vote on theresolutions; orthe total number of shares of shareholders who have no “personal interest” and whovote against the resolutions does not exceed 1 per cent. of the issued share capital ofthe Company.Documents available for inspectionThe draft letter of appointment with Mr Benguigui, the draft exemption and indemnificationagreements to be entered into between the Company and each of Mr Treger Mr Benguigui, theOption Agreement and the amendment to the human resources services agreement withKibbutz Amiad will be available for inspection at the offices of Berwin Leighton Paisner LLP,Adelaide House, London Bridge, London EC4R 9HA, England from the date of this documentuntil the date of the EGM and at the EGM from 11am until the conclusion of the meeting.Form of proxy/Form of directionAs mentioned above, you will also find enclosed with this document a form of proxy (unlessyou are a holder of depository interests in the Company, in which case you will receive a formof direction) for use at the EGM.5753838.14
Page 1 and 2: THIS DOCUMENT IS IMPORTANT AND REQU
Page 6 and 7: If you are a member of the Company,
Page 9 and 10: Appendix 1AMIAD FILTRATION SYSTEMS
Page 12: X = 900,000 * Y/(Y+P)where:X = maxi

EGM 2007 - Amiad

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