Unitronics

Related Party Transaction • Mar 25, 2014

UNITRONICS (1989) (R"G) LTD.

PRESS RELEASE Airport City, Israel March 25, 2014

***Regulated Information*** ***For Immediate Release***

An Immediate report concerning a transaction with a controlling shareholder or director that does not require General Meeting approval

Airport City, Israel – March 25, 2014– Unitronics published the attached Immediate Report pursuant to the requirements of Israeli law, concerning a transaction with a controlling shareholder or director that does not require General Meeting approval

About Unitronics

Unitronics (1989) (R"G) Ltd. is an Israeli company that engages, through its Products Department, in the design, development, production, marketing and sale of industrial automation products, mainly Programmable Logic Controllers ("PLCs"). PLCs are computer-based electronic products (hardware and software), used in the command and control of machines performing automatic tasks, such as production systems and automatic systems for industrial storage, retrieval and logistics. The Company also engages, through its Systems Department and/or its subsidiaries, in the design, construction and maintenance services in the framework of projects for automation, computerization and integration of computerized production and/or logistics systems, mainly automated warehouses, automated distribution centers and automated parking facilities. The Company's PLCs are distributed by over one hundred and forty distributors (and a wholly owned US subsidiary) in approximately fifty countries throughout Europe, Asia, America and Africa. The services of the Systems Department are provided to customers in Israel and also outside Israel.

This press release contains certain forward-looking statements and information relating to the Company that are based on the beliefs of the Management of the Company as well as assumptions made by and information currently available to the Management of the Company. Such statements reflect the current views of the Company with respect to future events, the outcome of which is subject to certain risks and other factors which may be outside of the Company's control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described herein as projected, anticipated, believed, estimated, expected or intended.

Unitronics (1989) (R"G) Ltd. (The "Company")

Re: An Immediate report on a transaction with a controlling shareholder or director that does not require

General Meeting approval

Pursuant to regulation 37a(5) to the Israeli Securities Regulation (Periodic and Immediate Reports), 5766 - 2006.

1. Unitronics hereby files a report concerning the approval of a transaction according to regulation 1b to the Companies Regulations ( Reliefs in Transactions with Interested Parties ) - 2000 .

2. Date of approval of the transaction by the Board of Directors: March 25th, 2014.

3. Description of the main aspects of the transaction and the Board of Directors and Audit Committee for approval of the transaction:

A. On March 25, 2014, the remuneration committee of the Company decided pursuant to the provisions of regulation1b(5) of the Companies Regulations (Reliefs in Transactions with Interested Parties ), 2000 ( the "Reliefs Regulations"), to ratify renewal and extension of the Company's directors and officers insurance liability policy (hereinafter: "the Policy"), effective July 1, 2013 through June 30, 2014 and approve the renewal and extension of this policy for another 12 months from July 1, 2014 through June 30, 2015 , in accordance with the policy of remuneration of the Company which was approved at the shareholders meeting of the Company on 9 December 2013 ( to the version of the approved remuneration policy see Appendix to the immediate report on the convening of a meeting of November 17, 2013 , reference number 2013-01-193608 included herein by reference ).

The principal terms of the policy are as follows : one event and in the aggregate for damages that may occur during the period of insurance in the amount of \$5,000,000 (five million U.S. dollars ) (plus \$ 1,000,000 legal defense expenses in Israel ) ; Company's deductible for claims submitted in the U.S. and Canada is \$50,000 for any one event.

Summary of the reasons for the remuneration Committee approval of the transaction:

i. The extension and renewal of the Policy as to directors who are controlling shareholders of the company as well as to directors who are not, gives proper protection to the insurees, in the light of the company's activities.

ii. The Policy is necessary for the company's activities and it allows the directors to act freely and independently in the company's best interests, in light of the enormous responsibility imposed on directors pursuant to their legal duties.

iii. The Policy is customary for the Company and for companies of its type and size and the Policy amount as well as its terms are reasonable and do not exceed customary terms under the company's specific circumstances.

iv. The terms of the Policy match the remuneration policy of the company.

v. the transaction is according to market conditions, in comparison to the terms and conditions of other companies with similar characteristics to the company and the transaction is not likely to materially affect the company's profitability, assets or obligations, therefor the terms of rule 1B(5) of the Relies Regulations are met.

vi. The terms of the Policy, as to directors and officers who are non-controlling shareholders of the company or their relatives, are equal to the terms of the Policy apply to other officers of the Company , the transaction is on market terms in comparison to the terms and conditions of other companies with similar characteristics to the company and the transaction is not likely to materially affect the company's profitability, assets or obligations, therefor the terms of rule 1B(5) of the Relies Regulations are met.

B. In addition to the above, and pursuant to approval by the Compensation Committee as described above , on March 25, 2014 the Board of Directors of the Company in accordance with regulation 1b ( 5 ) to the Reliefs Regulations , ratify renewal and extension of the Policy also on directors and officers who are controlling shareholders or their relatives, effective July 1, 2013 through June 30, 2014 and approve the renewal and extension of this policy for another 12 months from July 1, 2014 through June 30, 2015 , in accordance with the policy of remuneration of the Company.

The Company's Board's decision was given based on the reasons detailed above. .

1. Follows is the form of regulation 1c. of the Companies Regulations (Easements in Transactions with an Interested Party), 5760-2000: (a) The relieves in accordance with regulations 1 through 1b. shall not apply to a public company if one or more shareholders, holding at least one percent of the issued capital or of the voting rights in the company, notifies of his objection to the grant of relief as aforesaid, provided the objection had been submitted in writing no later than fourteen days from the day that the public company had published a report in accordance with the Securities Law concerning the adoption of the resolution, or from the day of publishing a report amending the aforesaid report. (b) In the event than an objection has been submitted as aforesaid in subregulation(a), the transaction would require approval in accordance with the provisions of Section 273 or 275, as applicable.

Respectfully, Unitronics (1989) (R"G) Ltd.