6-K
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign
Private Issuer
Pursuant to Rule 13a-16
or 15d-16
of the Securities
Exchange Act of 1934
January 14, 2008
AMERICAN ISRAELI PAPER
MILLS LTD.
(Translation of
Registrant’s Name into English)
P.O. Box 142, Hadera,
Israel
(Address of Principal Corporate
Offices)
Indicate by check mark whether the
registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
x Form 20-F
o Form 40-F
Indicate by check mark if the
registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(1): o
Note: Regulation S-T Rule
101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to
provide an attached annual report to security holders.
Indicate by check mark if the
registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(7): o
Note: Regulation S-T Rule
101(b)(7) only permits the submission in paper of a Form 6-K submitted to furnish a report
or other document that the registrant foreign private issuer must furnish and make public
under the laws of the jurisdiction in which the registrant is incorporated, domiciled or
legally organized (the registrant’s “home country”), or under the rules of
the home country exchange on which the registrant’s securities are traded, as long as
the report or other document is not a press release, is not required to be and has not
been distributed to the registrant’s security holders, and, if discussing a material
event, has already been the subject of a Form 6-K submission or other Commission filing on
EDGAR.
Indicate by check mark whether the
registrant by furnishing the information contained in this form is also thereby furnishing
the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange
Act of 1934:
o Yes
x No
If “Yes” is marked,
indicate below the file number assigned to the registrant in connection with Rule
12g3-2(b): 82-______________
The
Board of Directors (the “Board”) of American Israeli Paper Mills Ltd.
(the “Company”) resolved on January 14, 2008, per the recommendation of
the audit committee (the “Committee”) from January 14, 2008, to adopt a
compensation plan (the “Plan”) for officers and senior employees of the
Company and/or its subsidiaries and/or affiliated companies (collectively, the
“Group”). The Plan will include the issuance of an aggregate of 285,750
options (the “Options”). Each Option will represent, subject to
adjustments, a right to purchase one ordinary share, NIS 0.01 par value each, of the
Company (“Ordinary Shares”). Out of the aggregate number of 285,750
Options to be issued, 40,250 Options will be granted to the Chief Executive Officer of the
Company, Mr. Avi Brener (the “CEO Options”). In addition to the
Company’s Chief Executive Officer, the offerees will include 22 officers and senior
employees of the Company and it subsidiaries and 18 employees of the Company’s
affiliates (collectively, the “Offerees”).
A
summary of the material terms of the Plan and further information with respect to the
adoption of the Plan is provided herein below. A copy of the press release issued by the
Company on January 14, 2008, is attached hereto as Exhibit 99.1.
| 1. |
Type
of Securities to be Offered |
| |
1.1. |
The
Offerees will be issued 285,750 Options in the aggregate, 40,250 of which will
be issued to the Chief Executive Officer of the Company. Each Option will
represent, subject to adjustments, a right to purchase one Ordinary Share,
exercisable pursuant to the procedure set forth in Section 4 below. |
| |
1.2. |
The
maximum aggregate number of Ordinary Shares underlying the Options constitutes
approximately 5.65% of the outstanding share capital and voting rights in the
Company (5.34% on a fully diluted basis). |
| |
1.3. |
The
maximum aggregate number of Ordinary Shares underlying the CEO Options
constitutes approximately 0.8% of the outstanding share capital and the voting
rights in the Company (0.75% on a fully-diluted basis). |
| |
1.4. |
The
number of Options and the respective percentage of the outstanding share
capital and voting rights in the Company are based on the assumption that one
Ordinary Share will be issued per Option. However, under the terms of the Plan
as set forth herein, the Options are exercisable on a cashless basis. See
Section 4 below for further details. |
| |
1.5. |
The
Options will not be listed for trading on the Tel-Aviv Stock Exchange (“TASE”)
or the American Stock Exchange (“AMEX”). The Company will file
applications with TASE and AMEX to list for trading the Ordinary Shares
issuable upon the exercise of the Options. |
| 2. |
Issuance
of Options and Exercise |
| |
2.1. |
The
Company will issue the Options following the receipt of all of the necessary
approvals as provided in Section 9 below, including those of TASE, and provided
that the required 30-day period since the filing of the Plan with the Israeli
Tax Authority (“ITA”) has elapsed, as per the requirements of
the ITA. The Options will be issued only to those serving as officers and
senior employees of the Group at the time of issuance. Under the Plan, the
grant date will be stated in an offer letter. If no such determination is made,
the date of issuance will be the date determined by the Company’s Board
(the “Grant Date”). |
| |
2.2. |
The
Options will be issued pursuant to certain ITA Regulations that, among others,
restrict the ability of certain Offerees to sell the underlying Ordinary Shares
during a 24-month period and require that during that period, the Options and
underlying Ordinary Shares following the issuance, if issued, will be held by a
trustee. |
| |
2.3. |
No
Option will be transferable by an Offeree otherwise than by will or by the laws
of descent and distribution. |
| |
2.4. |
Each
Offeree will receive an offer letter detailing the Exercise Price (as set forth
below) and the number of Options to which he or she is entitled to. The Offeree
will undertake to follow the provisions of the Plan and to follow the relevant
ITA Regulations. |
| |
2.5. |
The
Options will vest and will be exercisable in four equal annual installments
beginning on the first anniversary of the Grant Date, subject to the prior
expiration or sooner termination of the Options. Each vested option will be
exercisable for a period of two years, with the exception of the first
installment which will be exercisable for a period of three years, i.e., the
first installment of Options will vest on the first anniversary and will be
exercisable until the forth anniversary of the Grant Date and the second
installment of Options will vest on the second anniversary and will be
exercisable until the forth anniversary of the Grant Date. |
2
| 3. |
Consideration
and Determination of the Exercise Price |
| |
3.1. |
The
Options will be issued to the Offerees without consideration. |
| |
3.2. |
The
Exercise Price of each Option will be NIS 223.965 per Ordinary Share ($60.12,
based on the representative rate of the NIS against the U.S. dollar on January
14, 2008). The Exercise Price is equal to the 30-day average closing price of
the Ordinary Shares on TASE prior to the date of approval of the Plan by the
Board, less 10% (“Exercise Price”). |
| |
3.3. |
Each
Offeree, exercising his or her Options, will be required to pay the par-value
per each Ordinary Share to be issued upon the exercise, but will not be
required to pay the Exercise Price, which will only be used in order to
calculate the actual number of Ordinary Shares to be issued under the Plan, as
set forth in Section 4 below. |
| 4. |
Procedure
for Exercise of Options |
| |
4.1. |
Offerees
asking to exercise their Options, as set forth under the Plan, will have to
deliver an exercise notice (the “Exercise Notice”). The day on
which the Exercise Notice is received is referred to herein as the “Exercise
Day”. |
| |
4.2. |
The
number of Ordinary Shares to be issued upon exercise will be equal to: (A) the
difference between (i) the closing price per Ordinary Share on TASE on the
trading day prior to the Exercise Day, multiplied by the number of Options
exercised pursuant to the Exercise Notice; and (ii) the aggregate Exercise
Price of the Options exercised pursuant to the Exercise Notice, divided by (B)
the closing price per Ordinary Share on TASE on the trading day prior to the
Exercise Day. Fractions of a share shall be rounded up to nearest whole number,
unless otherwise decided by the Company. |
| |
4.3. |
Unexercised
Options will expire and will not grant rights of any kind to the Offeree. |
| 5. |
Rights
upon Termination of the Plan |
| |
5.1. |
In
the event that an Offeree ceases to be an officer or employee of the Group, for
any reason other than termination as a result of such Offeree’s death or
disability or retirement, the vested and exercisable Options will remain
exercisable for a period of 90 days from the date of termination. Any and all
unvested Options, at the time of termination, will expire. |
| |
5.2. |
In
the event that an Offeree ceases to be an officer or employee of the Group, for
cause, all Options will terminate immediately upon the date of such
termination, such that the unvested portion of the Options will not vest, and
the vested portion of the Options will no longer be exercisable. |
| |
5.3. |
In
the event that an Offeree ceases to be an officer or employee of the Group, as
a result of such Offeree’s retirement, all Options will continue to be
exercisable pursuant to the terms of the Plan, such that the unvested portion
of the Options will vest and become exercisable in accordance with the terms of
the Plan, and the vested portion of the Options will continue to be exercisable
pursuant to the terms of the Plan. |
| |
5.4. |
In
the event that an Offeree ceases to be an officer or employee of the Group, as
a result of such Offeree’s disability or death, the vested portion of the
Options will continue to be exercisable pursuant to the terms of the Plan by
the Offeree (or his/her successor) and the unvested portion of the Options to
become exercisable on the next anniversary date immediately following the date
of termination, will vest and become exercisable in accordance with the Plan.
The compensation committee of the Board or other committee as may be appointed
by the Board, at its sole discretion, may decide to allow the Offeree (or
his/her successor) to exercise, pursuant to the terms of the Plan, Options
which have not yet vested, beyond those vesting on the next anniversary date
immediately following the date of termination, which will otherwise expire at
the date of termination. |
3
A change in an officer’s or
senior employee’s position within the Group will not affect rights offered to such
Offeree under the Plan.
| 7. |
No
Obligation for Continued Employment |
The Company’s decision to issue
Options under the Plan does not grant an Offeree a right to continued employment with the
Group, nor does it affect the Company’s right to terminate such Offeree’s
employment.
An Offeree’s rights to purchase
Ordinary Shares under the Plan will be adjusted as hereinafter provided:
| |
8.1.1. |
In
case of a distribution of a share dividend, the number of Ordinary Shares
exercisable under the outstanding unexercised Options held by each
Offerree will increase by the number of Ordinary Shares such Offerree
would have been entitled to if he or she had exercised the Options
prior to the record date of the share dividend. The Exercise Price
will not be adjusted as a result of said increase. |
| |
The
number of shares exercisable under the Options will increase only in the event of a
distribution of share dividends (as opposed to any other issuances). |
| |
8.1.2. |
In
case of a merger or other corporate reorganization entailing a share swap, the
Company may require each of the Offerees to accept other options or shares in
lieu of the unexercised Options held by such Offeree based on the merger or
reorganization exchange rate; provided, however, that the aggregate Exercise
Price of the new options will be equal to the aggregate Exercise Price of the
unexercised Options held by such Offeree immediately prior to the conversion. |
| |
8.1.3. |
In
case of an issuance of rights by the Company to its shareholders, the Exercise
Price of each outstanding unexercised Option will be reduced, on the rights
x-day, by the difference between: (A) the price on TASE per Ordinary Share
based on which the x-day price per share was calculated in the rights offering’s
prospectus and (B) the x-day price per share pursuant to such prospectus. In no
event will the Exercise Price be lower than the par-value per share. |
| |
8.1.4. |
In
case of a distribution of a cash dividend by the Company to the shareholders,
the Exercise Price will be reduced, on the dividend x-day, by the amount of
dividend per share (pre-tax). In no event will the Exercise Price be lower than
the par-value per share. |
| |
8.1.5. |
In
the case of a share split or reverse share split, the Offerees’ rights to
purchase Ordinary Shares under the Plan will be adjusted accordingly. |
| |
8.1.6. |
If,
pursuant to this Section 8, adjustments are made in such a manner that the
Company will have to issue fractions of a share, these fractions will be
rounded up to nearest whole number. |
| |
9.1. |
The
issuance of the Options is subject to the receipt of the following approvals
and fulfillment of procedures: |
| |
9.1.1. |
the
approval of the Committee and the Board (such approvals were obtained on
January 14, 2008); |
| |
9.1.2. |
the
approval of the TASE to list for trading the Ordinary Shares underlying the
Options; |
| |
9.1.3. |
the
approval of AMEX to list for trading the Ordinary Shares underlying the
Options; and |
| |
9.1.4. |
the
required 30-day period since the filing of the Plan with the ITA has elapsed,
as per the requirements of the ITA. |
4
| |
10.1. |
The
value of each Option is NIS 96.43 ($25.89, based on the representative rate of
the NIS against the U.S. dollar on January 14, 2008), while the aggregate value
of the Options is approximately NIS 27.555 million (approximately $7.40
million, based on the representative rate of the NIS against the U.S. dollar on
January 14, 2008). The aggregate value of the CEO Options is approximately NIS
3.881 million (approximately $1.04 million, based on the representative rate of
the NIS against the U.S. dollar on January 14, 2008). |
| |
10.2. |
The
aforementioned values were calculated using the Black & Scholes Formula,
based on the closing price of the Ordinary Shares on TASE, on January 13, 2008,
one trading day prior to date of approval of the Plan by the Board, which was
NIS 237.40 per Ordinary Share, with a weekly standard deviation of 4.3 %. |
| |
10.3. |
The
above assessment assumes the following considerations: |
| |
10.3.1. |
All
Options will be exercised on the last day of exercise. |
| |
10.3.2. |
All
Options will be exercised in full (although under the Plan, Options can only be
exercised on a cashless basis and accordingly the number of Ordinary Shares
issuable will be determined based on the calculation provided in Section 4
above). |
| |
10.3.3. |
The
assessment does not take into consideration that the Options will not be listed
for trading and trade restrictions provided in and under the Plan. |
| |
10.3.4. |
The
weekly standard deviation was calculated based on the average daily closing
price per Ordinary Share on TASE for a six-month period ending December 31,
2007. |
| |
10.3.5. |
The
annual discount rate for the Options is set at 4.5%. |
| 11. |
TASE
Closing Price per Ordinary Share |
| |
11.1. |
The
closing price of the Ordinary Shares on TASE, on January 13, 2008, one trading
day prior to the publication of this report, was NIS 237.40. |
| |
11.2. |
The
following table provides the high and low closing price per share of the
Ordinary Shares on TASE for the years 2006, 2007 and 2008. |
| |
|
High Closing Price
|
Low Closing Price
|
| |
Time Period
|
Price (NIS)
|
Date**
|
Price (NIS)
|
Date**
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
2006 |
|
|
| 237.00 |
|
May 7, 2006 |
|
|
| 168.50 |
|
September 10, 2006 |
|
|
| |
2007 | | |
| 259.40 |
|
May 10, 2007 | | |
| 185.00 |
|
January 11, 2007 | | |
| |
2008* | | |
| 261.30 |
|
January 2, 2008 | | |
| 237.00 |
|
January 10, 2008 | | |
| |
*
Through January 14, 2008. |
| |
**
In the event of a recurring closing price in a certain period, the table above indicates
the first trading date in the period with that closing price. |
| 12. |
Registered
and Outstanding Share Capital |
| |
12.1. |
As
of the date of this report, the registered share capital of the Company is NIS
200,000, divided into 20,000,000 Ordinary Shares. The outstanding share capital
of the Company is NIS 50,607.74, divided into 5,060,774 Ordinary Shares. |
| 13. |
The
Board’s Reasons for Approving the Plan |
| |
13.1. |
The
Board and the Committee have reviewed data with respect to compensation plans
for officers and senior employees administered by the Company in previous years
and by other publicly-traded companies of a similar size. They have also
examined the amount of consideration and the procedure for determining an
exercise price, applied in such plans. |
| |
13.2. |
The
Board and the Committee believe that the issuance of the Options will serve as
an incentive and reasonable compensation for the Offerees, in respect to the
scope of the activity of the Group, based on the financial reports and the
Offerees’ terms of employment, which may help improve the Company’s
performance. |
5
| |
13.3. |
The
Plan will serve as a major contribution to the compensation of officers and
senior employees and as an incentive towards improving the Group’s
performance and to help create a sense of conformity tying officers and senior
employees to the Group. The issuance of Options reflects the Board’s and
the Committee’s wish to encourage officers and senior employees to
contribute to the future of the Group in light of the challenges faced by the
Group. |
| |
13.4. |
The
number of Options to be issued to each of the Offerees has been determined
based on the Offeree’s seniority and position. |
| |
13.5. |
In
regard to the issuance of the Options to the Chief Executive Officer, the Board
and the Committee have also taken into account the Chief Executive Officer’s
personal contribution in the accomplishment of the Group’s goals and
objectives, including the increase in production in the paper packing division
and the scale of operations in Turkey, this in reference to the business
environment in which the Company operates and the amount of compensation
awarded to the Chief Executive Officer in previous years. |
| |
13.6. |
In
light of the reasons stated above, the Board and Committee believe the issuance
of the Options, in regard to the aggregate number of Options to be issued, is
reasonable and does not exceed acceptable standards of compensation as
exemplified in plans for officers and senior employees adopted in
publicly-traded companies of a similar size and nature. |
6
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
|
AMERICAN ISRAELI PAPER MILLS LTD.
(Registrant)
By: /s/ Lea Katz
——————————————
Lea Katz
Corporate Secretary |
Dated: January 14, 2008
7
EXHIBIT INDEX
| 99.1. |
Press
release dated January 14, 2008. |
8