Exhibit 1
CIBC ISRAEL LTD
RULE 10B5-1 SALES PLAN
Sales Plan dated SEPTEMBER 20, 2004 (this "Sales Plan") between XXXX XXXXXX
("Seller") and CIBC Israel Ltd Corp. ("CIBC Israel Ltd"), acting as agent.
A. Recitals
1. This Sales Plan is entered into between Seller and CIBC Israel Ltd. for the
purpose of establishing a trading plan that complies with the requirements of
Rule 10b5-1(c)(1) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
2. Seller is establishing this Sales Plan in order to permit the orderly
disposition of a portion of Seller's holdings of the COMMON stock, 0.1 NIS par
value, (the "Stock"), of ON TRACK INNOVATIONS LTD. (the "Issuer")
B. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
1. As of the date hereof, Seller is not aware of any material nonpublic
information concerning the Issuer or its securities. Seller is entering into
this Sales Plan in good faith and not as part of a plan or scheme to evade
compliance with the federal securities laws.
2. The securities to be sold under this Sales Plan are owned free and clear by
Seller and are not subject to any liens, security interests or other
encumbrances or limitations on disposition other than those that may be imposed
by Rules 144 or 145 under the Securities Act of 1933, as amended (the
"Securities Act").
3. While this Sales Plan is in effect, Seller agrees not to enter into or alter
any corresponding or hedging transaction or position with respect to the
securities covered by this Sales Plan and agrees not to alter or deviate from
the terms of this Sales Plan.
4. (a) Seller agrees to provide CIBC Israel Ltd. with a certificate dated as of
the date of this Sales Plan and signed by the Issuer substantially in the form
of Exhibit A to this Sales Plan prior to commencement of the Plan Sales Period
(as defined below).
(b) Seller agrees to notify CIBC Israel Ltd's branch compliance officer by
telephone at the number set forth in paragraph G.5 below as soon as practicable
if Seller becomes aware of the occurrence of any event contemplated by paragraph
3 of the certificate set forth as Exhibit A to this Sales Plan. Such notice
shall indicate the anticipated duration of the restriction, but shall not
include any other information about the nature of the restriction or its
applicability to Seller and shall not in any way communicate any material
nonpublic information about the Issuer or its securities to CIBC Israel Ltd.
Such notice shall be in addition to the notice required to be given to CIBC
Israel Ltd by the Issuer pursuant to the certificate set forth as Exhibit A to
this Sales Plan.
5. Seller agrees to complete, execute and deliver to CIBC Israel Ltd a seller
representation letter dated as of the date of this Sales Plan substantially in
the form of Exhibit B to this Sales Plan prior to the commencement of the Plan
Sales Period.
6. The execution and delivery of this Sales Plan by Seller and the transactions
contemplated by this Sales Plan will not contravene any provision of applicable
law or any agreement or other instrument binding on Seller or any of Seller's
affiliates or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over Seller or Seller's affiliates.
7. Seller agrees that until this Sales Plan has been terminated Seller shall not
(i) enter into a binding contract with respect to the purchase or sale of the
Stock with another broker, dealer or financial institution (each, a "Financial
Institution"), (ii) instruct another Financial Institution to purchase or sell
the Stock or (iii) adopt a plan for trading with respect to the Stock other than
this Sales Plan.
8. Seller agrees that it shall not, directly or indirectly, communicate any
information relating to the Stock or the Issuer to any employee of CIBC Israel
Ltd or its affiliates who is involved, directly or indirectly, in executing this
Sales Plan at any time while this Sales Plan is in effect.
9. (a) Seller agrees to make all filings, if any, required under Sections 13(d),
13(g) and 16 of the Exchange Act in a timely manner, to the extent any such
filings are applicable to Seller.
(b) Seller agrees that Seller shall at all times during the Plan Sales Period
(as defined below), in connection with the performance of this Sales Plan,
comply with all applicable laws, including, without limitation, Section 16 of
the Exchange Act and the rules and regulations promulgated thereunder.
10. If the Stock is to be sold under Rule 144, 145 or 701:
(a) Seller represents and warrants that the Stock to be sold under this Sales
Plan is currently eligible for sale under Rule 144, 145 or 701.
(b) Seller agrees not to take, and agrees to cause any person or entity with
which Seller would be required to aggregate sales of Stock pursuant to paragraph
(a)(2) or (e) of Rule 144 not to take, any action that would cause the sales
under this Sales Plan not to meet all applicable requirements of Rule 144.
(c) Seller agrees to complete, execute and deliver to CIBC Israel Ltd Forms 144
for the sales to be effected under this Sales Plan at such times and in such
number of copies as CIBC Israel Ltd shall request, and following such delivery,
CIBC Israel Ltd agrees to file such Forms 144 on behalf of Seller as required by
applicable law.
(d) Seller hereby grants CIBC Israel Ltd a power of attorney to complete and/or
file on behalf of Seller any required Forms 144. Notwithstanding such power of
attorney, Seller acknowledges that CIBC Israel Ltd shall have no obligation to
complete or file Forms 144 on behalf of Seller except as set forth in
subparagraph (c).
(e) CIBC Israel Ltd agrees to conduct all sales under to this Sales Plan in
accordance with the manner of sale requirement of Rule 144 of the Securities Act
and in no event shall CIBC Israel Ltd effect any sale if such sale would exceed
the then-applicable amount limitation under Rule 144, assuming CIBC World
Market's sales under to this Sales Plan are the only sales subject to that
limitation.
11. Seller acknowledges and agrees that Seller does not have, and shall not
attempt to exercise, any influence over how, when or whether to effect sales of
Stock under this Sales Plan.
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C. IMPLEMENTATION OF THE PLAN
1. Seller hereby appoints CIBC Israel Ltd to sell shares of Stock pursuant to
the terms and conditions set forth below. Subject to such terms and conditions,
CIBC Israel Ltd hereby accepts such appointment.
2. CIBC Israel Ltd is authorized to begin selling Stock under this Sales Plan on
___________ and shall cease selling Stock on the earliest to occur of: (i) the
date on which CIBC Israel Ltd receives notice of the death of Seller; (ii) the
date that the Issuer or any other person publicly announces a tender or exchange
offer with respect to the Stock; (iii) the date of public announcement of a
merger, acquisition, reorganization, recapitalization or comparable transaction
affecting the securities of the Issuer as a result of which the Stock will be
exchanged or converted into shares of another company; (iv) the date on which
CIBC Israel Ltd receives notice of the commencement of any proceedings in
respect of or triggered by Seller's bankruptcy or insolvency; and (v) (specify,
by checking one or more of the boxes below, the date upon which CIBC Israel Ltd
will cease selling stock):
|X| March 31, 2005
|X| the date the aggregate number of shares of Stock sold under this Sales Plan
is 142,000 shares; and;
[_] the date that the aggregate Gross proceeds of sales pursuant to this Sales
Plan (before deducting commission and other expenses of sale) reaches
$_________________.
(the period during which CIBC Israel Ltd is authorized to sell stock under this
paragraph C.2 is referred to in this Sales Plan as the "Plan Sales Period").
3. (a) CIBC Israel Ltd shall sell the Daily Sale Amount (as defined below) for
the account of Seller on each Sale Day (as defined below), subject to the
following restrictions, if desired (check each applicable box):
|X| CIBC Israel Ltd shall not sell any shares of Stock under to this Sales Plan
at a price of less than $ 8 per share (before deducting commissions and
other expenses of sale) (the "Minimum Sale Price").
|_| (insert any other restrictions)____________________________________________
___________________________________________________________________________
(b) A "Sale Day" is (select one):
|X| each Trading Day
|_| (insert other conditions)__________________________________________________
___________________________________________________________________________
(c) The "Daily Sale Amount" for any Sale Day shall be (please check the
applicable box to indicate the amount of Stock that CIBC Israel Ltd is to sell
on each Sale Day):
|_| _________ shares of Stock.
|_|
|_| (insert other conditions):_________________________________________________
___________________________________________________________________________
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(d) Subject to the restrictions set forth in paragraph C.3(a) above, CIBC Israel
Ltd shall sell the Daily Sale Amount on each Sale Day under ordinary principles
of best execution at the then-prevailing market price.
(e) If, consistent with ordinary principles of best execution or for any other
reason, CIBC Israel Ltd cannot sell the Daily Sale Amount on any Sale Day, then
(select one):
|_| the amount of such shortfall may be sold as soon as practicable on the
immediately succeeding Trading Day under ordinary principles of best
execution;. Until sale plan termination
|_| CIBC Israel Ltd' obligation to sell Stock on such Sale Day under this Sales
Plan shall be deemed to have been satisfied.
Nevertheless, if any such shortfall exists after the close of trading on the
last Trading Day of the Plan Sales Period, CIBC Israel Ltd' authority to sell
such shares for the account of Seller under this Sales Plan shall terminate.
(f) The Daily Sale Amount and the Minimum Sale Price, if applicable, shall be
adjusted automatically on a proportionate basis to take into account any stock
split, reverse stock split or stock dividend with respect to the Stock or any
change in capitalization with respect to the Issuer that occurs during the Plan
Sales Period.
4. CIBC Israel Ltd shall not sell Stock under this Sales Plan at any time when:
(i) CIBC Israel Ltd, in its sole discretion, has determined that a market
disruption, banking moratorium, outbreak or escalation of hostilities or other
crisis or calamity has occurred, or
(ii) CIBC Israel Ltd, in its sole discretion, has determined that it is
prohibited from doing so by a legal, contractual or regulatory restriction
applicable to it or its affiliates or to Seller or Seller's affiliates (other
than any such restriction relating to Seller's possession or alleged possession
of material nonpublic information about the Issuer or the Stock), or
(iii) CIBC Israel Ltd has received notice from the Issuer of Seller of the
occurrence of any event contemplated by paragraph 3 of the certificate set forth
as Exhibit A to this Sales Plan or
(iv) CIBC Israel Ltd has received notice from Seller to terminate this Sales
Plan in accordance with paragraph D.1 below.
5. (a) Seller agrees to deliver the Stock to be sold under this Sales Plan (with
the amount to be estimated by Seller in good faith, if the Daily Sale Amount is
designated as an aggregate dollar amount) (the "Plan Shares") into an account at
CIBC World Markets in the name of and for the benefit of Seller (the "Plan
Account") or into a Trust account for customers, prior to the commencement of
sales under this Sales Plan.
(b) CIBC Israel Ltd shall withdraw Stock from the Plan Account in order to
effect sales of Stock under this Sales Plan. CIBC Israel Ltd agrees to notify
Seller promptly if at any time during the Plan Sales Period the number of shares
of Stock in the Plan Account is less than the number of Plan Shares remaining to
be sold under this Sales Plan. Upon such notification, Seller agrees to deliver
promptly to the Plan Account the number of shares of Stock necessary to
eliminate this shortfall.
(c) To the extent that any Stock remains in the Plan Account after the end of
the Plan Sales Period or upon termination of this Sales Plan, CIBC Israel Ltd
agrees to return such Stock promptly to the Issuer's transfer agent for
relegending to the extent that such Stock would then be subject to transfer
restrictions in the hands of the Seller.
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6. CIBC Israel Ltd shall in no event effect any sale under this Sales Plan if
the Stock to be sold is not in the Plan Account.
7. CIBC Israel Ltd may sell Stock on any national securities exchange, in the
over-the-counter market, on an automated trading system or otherwise.
D. TERMINATION
1. This Sales Plan may not be terminated prior to the end of the Plan Sales
Period, except that:
(i) it may be terminated at any time by written notice from Seller received by
CIBC Israel Ltd compliance office at the address or fax number set forth in
paragraph G.5 below if legal or regulatory restrictions applicable to Seller or
Seller's affiliates (other than any such restrictions relating to Seller's
possession or alleged possession of material nonpublic information about the
Issuer or the Stock) would prevent CIBC Israel Ltd from selling Stock for
Seller's account during the Plan Sales Period, and
(ii) it may be suspended or, at CIBC Israel Ltd' option, terminated if CIBC
Israel Ltd has received notice from the Issuer of the occurrence of any event
contemplated by paragraph 3 of the certificate set forth as Exhibit A to this
Sales Plan.
E. INDEMNIFICATION; LIMITATION OF LIABILITY
1. (a) Seller agrees to indemnify and hold harmless CIBC Israel Ltd and or CIBC
World Markets its directors, officers, employees and affiliates from and against
all claims, losses, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) arising out of or attributable to CIBC
Israel Ltd and or CIBC World Markets' actions taken or not taken in compliance
with this Sales Plan or arising out of or attributable to any breach by Seller
of this Sales Plan (including Seller's representations and warranties in this
Sales Plan) or any violation by Seller of applicable laws or regulations. This
indemnification shall survive termination of this Sales Plan.
(b) Notwithstanding any other provision of this Sales Plan, CIBC Israel Ltd and
or CIBC World Markets shall not be liable to Seller for:
(i) special, indirect, punitive, exemplary or consequential damages, or
incidental losses or damages of any kind, even if advised of the possibility of
such losses or damages or if such losses or damages could have been reasonably
foreseen, or
(ii) any failure to perform or to cease performance or any delay in performance
that results from a cause or circumstance that is beyond its reasonable control,
including but not limited to failure of electronic or mechanical equipment,
strikes, failure of common carrier or utility systems, severe weather, market
disruptions or other causes commonly known as "acts of God."
2. Seller has consulted with Seller's own advisors as to the legal, tax,
business, financial and related aspects of, and has not relied upon CIBC Israel
Ltd and or CIBC World Markets or any person affiliated with CIBC Israel Ltd and
or CIBC World Markets in connection with Seller's adoption and implementation of
this Sales Plan.
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(i) Seller acknowledges and agrees that in performing Seller's obligations under
this Sales Plan, neither CIBC Israel Ltd and or CIBC World Markets nor any of
its affiliates nor any of their respective officers, employees or other
representatives is exercising any discretionary authority or discretionary
control respecting management of Seller's assets, or exercising any authority or
control respecting management or disposition of Seller's assets, or otherwise
acting as a fiduciary (within the meaning of Section 3(21) of the Employee
Retirement Income Security Act of 1974, as amended, or Section 2510.3-21 of the
Regulations promulgated by the United States Department of Labor) with respect
to Seller or Seller's assets. Without limiting the foregoing, Seller further
acknowledges and agrees that neither CIBC Israel Ltd and or CIBC World Markets
nor any of its affiliates nor any of their respective officers, employees or
other representatives has provided any "investment advice" within the meaning of
such provisions, and that no views expressed by any such person will serve as a
primary basis for investment decisions with respect to Seller's assets.
F. GENERAL
1. Seller shall pay CIBC Israel Ltd $_____ per share of the Stock sold.
2. Seller and CIBC Israel Ltd acknowledge and agree that this Sales Plan is a
"securities contract," as such term is defined in Section 741(7) of Title 11 of
the United States Code (the "Bankruptcy Code"), entitled to all of the
protections given such contracts under the Bankruptcy Code.
3. This Sales Plan constitutes the entire agreement between the parties with
respect to this Sales Plan and supercedes any prior agreements or understandings
with regard to the Sales Plan.
4. This Sales Plan may be amended by Seller only upon the written consent of
CIBC Israel Ltd and receipt by CIBC Israel Ltd of the following documents, each
dated as of the date of such amendment:
(i) a representation signed by the Issuer substantially in the form of Exhibit A
to this Sales Plan,
(ii) a certificate signed by Seller certifying that the representations and
warranties of Seller contained in this Sales Plan are true at and as of the date
of such certificate as if made at and as of such date and
(iii) a seller representation letter completed and executed by Seller
substantially in the form of Exhibit B to this Sales Plan.
5. All notices to CIBC Israel Ltd under this Sales Plan shall be given to CIBC
Israel Ltd' compliance office in the manner specified by this Sales Plan by
telephone at 00-0000000, by facsimile at 00-0000000 or by certified mail to the
address below:
CIBC ISRAEL LTD.
ATTN: XXXXX XXXXX
6. Seller's rights and obligations under this Sales Plan may not be assigned or
delegated without the written permission of CIBC Israel Ltd.
7. This Sales Plan may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures on all
counterparts were upon the same instrument.
8. If any provision of this Sales Plan is or becomes inconsistent with any
applicable present or future law, rule or regulation, that provision will be
deemed modified or, if necessary, rescinded in order to comply with the relevant
law, rule or regulation. All other provisions of this Sales Plan will continue
and remain in full force and effect.
9. This Sales Plan shall be governed by and construed in accordance with the
internal laws of the State of New York and may be modified or amended only by a
writing signed by the parties to this Sales Plan.
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IN WITNESS WHEREOF, the undersigned have signed this Sales Plan as of the date
first written above.
Signature: /s/ Xxxx Xxxxxx
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Print Name: Xxxx Xxxxxx
Title: CEO of On Track Innovations Ltd.
CIBC ISRAEL LTD CORP.
By: /s/ illegible
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Print Name:
-------------------------------
Title: -------------------------------
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EXHIBIT A
ISSUER REPRESENTATION
1. ON TRACK INNOVATIONS LTD. (the "Issuer") represents that it has reviewed the
Sales Plan dated (the "Sales Plan") between XXXX XXXXXX ("Seller") and CIBC
Israel Ltd ("CIBC Israel Ltd") relating to the common stock, 0.1 NIS, par value
of the Issuer (the "Stock").
2. The sales to be made by CIBC Israel Ltd for the account of Seller under the
Sales Plan will not violate the Issuer's xxxxxxx xxxxxxx policies, and to the
best of the Issuer's knowledge there are no legal, contractual or regulatory
restrictions applicable to Seller or Seller's affiliates as of the date of this
representation that would prohibit the Seller from entering into the Sales Plan
or prohibit any sale under the Sales Plan.
3. If, at any time during the Plan Sales Period (as defined in the Sales Plan),
a legal, contractual or regulatory restriction that is applicable to Seller or
Seller's affiliates would prohibit any sale under the Sales Plan (other than any
such restriction relating to Seller's possession or alleged possession of
material nonpublic information about the Issuer or its securities), the Issuer
agrees to give CIBC Israel Ltd' branch compliance officer notice of such
restriction by telephone as soon as practicable. Such notice shall be made to
__________ at ___________ and shall indicate the anticipated duration of the
restriction, but shall not include any other information about the nature of the
restriction or its applicability to Seller. In any event, the Issuer shall not
communicate any material nonpublic information about the Issuer or its
securities to CIBC Israel Ltd.
4. If the Stock includes shares that may be sold under Rule 144, 145 or 701
under the Securities Act of 1933, as amended (the "Securities Act"), the Issuer
agrees as follows: To avoid delays in connection with transfers of stock
certificates and settlement of transactions under the Sales Plan, and in
acknowledgment of CIBC Israel Ltd' agreement in paragraph B.10 of the Sales Plan
that sales of Stock under the Sales Plan will be effected in compliance with
applicable provisions of Rule 144 of the Securities Act of 1933, as amended, and
CIBC Israel Ltd' agreement in paragraph C.5 of the Sales Plan to return any
unsold shares to the Issuer's transfer agent for relegending to the extent such
shares would then be subject to transfer restrictions in the hands of the
Seller, the Issuer agrees that it will, immediately upon Seller's directing
delivery of Stock into an account at CIBC Israel Ltd in the name of and for the
benefit of Seller, instruct its transfer agent to process the transfer of shares
and issue a new certificate to Seller that does not bear any legend or statement
restricting its transferability to a buyer.
Dated: September 19, 2004
ON TRACK INNOVATIONS LTD.
By: Xxxxxx Xxxxxxxxx, Company Secretary
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NAME AND TITLE OF AUTHORIZED OFFICER
EXHIBIT B
RULE 144
SELLER'S REPRESENTATION LETTER
CIBC World Markets
000 Xxxxx Xxxxxx
0xx. Xxxxx
Xxx Xxxx, XX 00000
To whom it may concern:
In connection with my order to sell _________________ shares of
____________________(# OF SHARES) for my account in the manner permitted by Rule
144 promulgated under the Securities Act of 1933, I advise you as follows:
1. I obtained the aforesaid securities in the following manner:
_________________________________________________________________
_________________________________________________________________
(DATE ACQUIRED, NUMBER OF SHARES, AND FROM OR THROUGH WHOM)
2. I have not made, either directly or indirectly, any sales, gifts, pledges
or donations within the preceding three months other than as follows:
__________________________
(DATE) (# OF SHARES)
3. There are no persons whose sales must be aggregated with mine in
determining the amount that may be sold other than as follows: (if none,
indicate none)
4. I am not and will not be acting in concert with any other person for the
purpose of selling securities of this company.
5. The number of securities to be sold does not exceed the greater of:
(a) 1% of such ____________________. security currently outstanding;
(ISSUER)
OR
(b) the average weekly reported volume of trading in such security on all
securities exchanges during the four calendar weeks preceding my order
to sell.
6. I have not made any payments to any other person in connection with your
execution of my above-mentioned order, and I will not do so; nor have I
solicited or arranged for the solicitation of any orders to buy in
anticipation of or in connection with the proposed sale of shares.
7. I have no buy or sell orders open in any security of this company with any
other broker or bank and will not place any buy or sell orders pending
completion of this order.
8. I have been the owner of the securities which I have ordered sold this day
and fully paid for same, since _________________ .
(DATE)
9. I have filed Form 144 with the Securities and Exchange Commission and
attach a copy hereto.
10. The issuer is current in its filings pursuant to Rule 144(c). The source of
such information is___________________________.
(ISSUER OR COMPANY COUNSEL)
11. I (am) (am not) an officer, director or holder of 10% or more of the
outstanding equity securities of the company and (do) (do not), alone or
together with any other person, exercise control over the company.
12. I shall indemnify and hold you harmless (including any legal fees and
expenses reasonably incurred by you) against any liability, loss or expense
incurred or suffered by you arising out of the sale and transfer of these
securities.
Very truly yours,
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(SIGNATURE OF SELLER)
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(DATE)
