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Bet Shemesh Engines Holdings (1997) Ltd.

Public Company No. 520043480

April 9, 2026

Israel Securities Authority

The Tel Aviv Stock Exchange Ltd.

www.isa.gov.il

www.tase.co.il

Via MAGNA

Immediate report regarding the convening of a General and Special Meeting of the Company's Shareholders

Bet Shemesh Engines Holdings (1997) Ltd. (hereinafter: the "Company") is honored to hereby submit an immediate report regarding the convening of a General and Special Meeting of the Company's shareholders (hereinafter: the "Summoning Report" and the "Meeting", respectively), the agenda of which will include the subject detailed in this Summoning Report, in accordance with the Companies Law, 5759-1999 (hereinafter: the "Companies Law"), the Securities Law, 5728-1968 (hereinafter: the "Securities Law"), the Securities Regulations (Periodic and Immediate Reports), 5730-1970 (hereinafter: the "Reporting Regulations"), the Companies Regulations (Notice and Advertisement of a General Meeting and a Class Meeting in a Public Company and Adding a Subject to the Agenda), 5760-2000, and the Companies Regulations (Written Voting and Position Statement), 5765-2005 (hereinafter: the "Written Voting Regulations"), regarding the publication of an immediate report and the convening of a special general meeting of the Company's shareholders.

1. Place and Date of the Meeting

1.1. The Meeting will be held on Sunday, May 17, 2026, at 17:00, at the offices of the Company's legal counsel, Naschitz, Brandes, Amir & Co., Advocates, 5 Tuval Street, Tel Aviv (1st Floor).

1.2. The Company reserves the right to provide updates regarding the replacement of the physical convening of the Meeting as detailed in Section 1.1 above with a meeting via communication without physical presence. Insofar as the Company chooses the alternative of convening via communication methods, it will publish an immediate report accordingly.

2. On the Meeting's Agenda

2.1. Item No. 1: Approval of a salary increase for the Company's CEO, Mr. Ram Drori, in deviation from the Remuneration Policy.

3. Item No. 1: Approval of a salary increase for the Company's CEO, Mr. Ram Drori, in deviation from the Remuneration Policy.

3.1. Details regarding Mr. Ram Drori and his current terms of office

3.1.1. Mr. Ram Drori (hereinafter: "Mr. Drori") has served as the Company's CEO since April 10, 2017. In accordance with his employment terms, starting from January 2025, he is entitled to a monthly salary in the amount of 101,000 NIS. In March 2025, the Remuneration Committee and the Board of Directors decided to approve the update of

his salary as a non-material change according to the Remuneration Policy. Mr. Drori is entitled to ancillary benefits by law and as customary in the Company, including payments to an advanced study fund, social provisions for managers' insurance/pension fund, annual leave, and expense reimbursement. Mr. Drori is entitled to 26 vacation days per year and convalescence pay at the scope of 13 days per year. The Company provides Mr. Drori with a grossed-up company car.

3.1.2. The engagement between the Company and Mr. Drori is for an indefinite period and can be terminated at any time by 6 months' written notice.

3.1.3. Mr. Drori is entitled to an annual bonus according to the "Executive Compensation" plan as is customary in the Company, the annual bonus amount will stand at between 5 and 7 gross monthly salaries, a one-time bonus subject to the provisions of the remuneration policy and up to 3 monthly salaries as a discretionary bonus within the framework of an annual bonus and/or a special bonus. As of the date of this report, Mr. Drori holds 82,500 warrants (non-tradable) exercisable for up to 82,500 ordinary shares of the Company. For further details regarding the annual bonus or the warrants see immediate reports from January 18, 2017, February 4, 2024 and February 13, 2024 (references: 2017-01-007815, 2024-01-010780 and 2024-01-013336-1, respectively), the information of which is provided in this report by way of reference.

3.1.4. For details regarding the remuneration for the year 2025 in accordance with the Sixth Schedule to the Reporting Regulations see Regulation 21 in Chapter D of the Company's Periodic report for the year 2025 (immediate report dated March 25, 2026, reference: 2026-01-026704) (hereinafter: the "2025 Periodic report").

3.1.5. For further details regarding Mr. Drori see Regulation 26 in Chapter D of the 2025 Periodic report.

3.2. The Change Proposed for Approval

It is proposed to approve the update of the terms of office and employment of the Company's CEO, Mr. Ram Drori (subject to approval from the Company's remuneration policy) as detailed below.

3.2.1. Updating Mr. Drori's fixed monthly salary, so that starting from January 1, 2026, for his role Mr. Drori will be entitled to a salary increase of NIS 9 thousand per month so that his monthly salary (gross) will stand at a total of NIS 110,000.

3.2.2. The proposed remuneration exceeds the current remuneration policy since the fixed remuneration cap in the remuneration policy in terms of cost is NIS 1,650 thousand and subject to the approval of the proposed change the fixed component in terms of cost will stand at approximately NIS 1,834 thousand. The Remuneration Committee and the Company's Board of Directors intend to act with the aim of updating the remuneration policy so that it will be adapted to the remuneration terms of the Company's CEO. It should be noted that except for the change in section 3.2.1 above, the rest of Mr. Drori's terms of office and employment will remain unchanged.

3.3. Below is the detail of the pro-forma remuneration under the assumption of receiving a maximum bonus and approval of the remuneration proposed for approval within the framework of this meeting (in terms of cost to the Company in NIS thousands):

Remuneration Recipient Details				Remuneration for Services							Other Remuneration			Total
Name	Role	Scope of Position	Percentage of Holding in the Corporation's Capital	Salary	Bonus*	Payment in securities**	Management Fees	Consulting Fees	Commission	Other	Interest	Rent	Other
Ram Drori	CEO	Full-time position	0	1,835	1,229	1,267	-	-	-	-	-	-	-	4,331

The maximum bonus granted according to employment terms.
** Annual value of an allocation approved at the shareholders' meeting dated February 13, 2024.

3.4. After examining the considerations required under the Companies Law, including the reference to the matters specified in Part A of the First Addendum A to the Companies Law, 5759-1999 (hereinafter: the "Companies Law"), determination of the matters specified in Part B of the First Addendum A to the Companies Law as well as additional data, below are the reasons of the Compensation Committee and the Company's Board of Directors for approving the compensation terms of the Company's CEO:

(a) The Compensation Committee and the Company's Board of Directors gave importance to the business and management experience of Mr. Drori, his abilities and skills during his term of office in which he led the Company to impressive achievements. Among other things, reference can be made to the significant growth of framework agreements, constant growth in revenue of over 20% each year in the last three years, the acquisition of Turbine Standard Ltd. - a subsidiary in the USA, and the JC Defense partnership - a critical strategic move for the military market in the field of small engines.

(b) The Compensation Committee and the Company's Board of Directors determined that updating Mr. Drori's compensation terms is for the benefit of the Company and its business, that the compensation proposed for approval for his employment as CEO is appropriate, fair, reasonable and at market terms, all this considering, among other things, the above and considering: (a) the role and areas of responsibility assigned to Mr. Drori as the Company's CEO; (b) Mr. Drori's education, his skills, his expertise in many fields relevant to the Company's activities, his significant contribution to the success of the Company and to the desired success of the Company; (c) the Company's size, its strength, its profitability and its nature; (d) the Company's long-term policy and its goals, among other things, in terms of the ability to retain talented and high-quality officers.

(c) The proposed compensation was examined and approved as a deviation from the Company's compensation policy because the Company believes that the ceiling of the fixed component in the compensation policy should be updated and the proposed compensation deviates from the said ceiling.

(d) Therefore, the Compensation Committee and the Board of Directors unanimously approved the update in Mr. Drori's employment terms; there will be no material effect on the Company, its profits, its assets and its liabilities in relation to its recent financial reports.

Proposed resolution version:

"To approve the update of the terms of office and employment of the Company's CEO, Mr. Ram Drori, as a deviation from the Company's compensation policy."

4. The majority required for the approval of the resolutions on the agenda

4.1. The majority required for the approval of resolution number 1 on the agenda is a special majority in accordance with Section 267A of the Companies Law, provided that one of the following is met:

4.1.1. The count of the majority votes at the meeting shall include a majority of the total votes of shareholders who are not controlling shareholders in the Company or who have a personal interest in the approval participating in the vote; in the count of the total votes of the said shareholders, the abstaining votes shall not be taken into

account; Section 276 of the Companies Law shall apply to anyone who has a personal interest, with the necessary changes.

4.1.2. The total number of opposing votes from among the shareholders mentioned in subparagraph 4.2.1 shall not exceed two percent of the total voting rights in the company.

In accordance with the provisions of sections 267A(c) and 272(c1)(1) of the Companies Law, the company's board of directors shall be entitled to approve the allocation of warrants to the CEO according to this convening report, even if the general meeting objects to the approval of the allocation, subject to the provisions of the Companies Law.

5. Notice of Personal Interest

According to section 276 of the Companies Law, before voting on item number 1 above, or on the voting paper, a shareholder wishing to participate in the vote will be required to notify the company if they have a personal interest in approving the said resolutions or not. If a shareholder did not so notify, they shall not vote and their vote shall not be counted.

6. The Record Date

The record date regarding the eligibility to participate and vote in the meeting according to section 182(b) of the Companies Law and Regulation 3 of the Written Voting Regulations, is April 16, 2026 (hereinafter: the "Record Date"). A person who has a share registered with a TASE member, and that share is included among the shares registered in the shareholders' register in the name of a registration company, shall provide the company with a certification from the TASE member with whom their right to the share is registered, regarding their ownership of the share on the record date, in accordance with the form in the schedule to the Companies Regulations (Proof of Ownership of a Share for the Purpose of Voting at a General Meeting), 2000.

7. Quorum and Adjourned Meeting

7.1 A quorum will be formed at the meeting when at least two shareholders holding shares granting them at least 40% of the company's shares are present, in person or by proxy, within half an hour of the time set for the start of the meeting. If after half an hour from the time set for the start of the meeting a quorum is not found, the meeting shall be adjourned to the business day following the day of the meeting, at the same time and place without further notice, or to another day, time and place as determined by the board of directors in a notice to the shareholders, and at the adjourned meeting, the matters for which the first meeting was called will be discussed. If a quorum is not found at the adjourned meeting as stated, at least one shareholder, present in person or by proxy, shall constitute a quorum, unless it was convened at the request of shareholders.

7.2 Where the company notifies of the adjournment of the meeting or in the event the company decides to hold a continued meeting in accordance with section 74 of the Companies Law, the electronic voting system will not be operated again and it will not be possible to use the system to vote by means of an electronic voting paper at the adjourned meeting or the continued meeting as the case may be. The scheduling of an adjourned meeting or a continued meeting does not prevent anyone who voted by means of an electronic voting paper at that meeting (before the adjournment of the meeting date) from changing their vote, but a shareholder will be able to do so by other voting means, namely a written voting paper, physical presence at the meeting or voting by proxy. For the purpose of voting at an adjourned meeting or a continued meeting, a shareholder shall not be required to provide the company with a new ownership certification. Also, a shareholder who used the electronic voting system in order to transfer to the company an ownership certification only and requests to vote by other voting means is not required to transfer to the company a new ownership

certification for the purpose of voting at an adjourned meeting or at the continued meeting. For the avoidance of doubt, the votes cast in the electronic voting system until its closing time will be counted (as long as they were not later changed by the voter) within the framework of the results of the adjourned meeting or continued meeting both for the purpose of the required quorum at the meeting and for the purpose of calculating the results of the meeting.

8. Ownership Certification

8.1 In accordance with the Companies Regulations (Proof of Ownership of a Share for the Purpose of Voting at a General Meeting), 2000, (hereinafter: the "Proof of Ownership Regulations"), a shareholder for whose benefit a share is registered with a TASE member, and that share is included among the shares registered in the register of shareholders in the name of the Registration Company, shall provide the company with a certification from the TASE member with whom their right to the share is registered regarding their ownership of the share on the record date, in accordance with the form in the schedule to the Proof of Ownership Regulations.

8.2 A shareholder whose shares are registered with a TASE member is entitled to receive ownership confirmation from the TASE member through which they hold their shares, at a branch of the TASE member or by mail to their address for shipping fees only, if requested, provided that the request for this matter was given in advance for a specific securities account.

8.3 Additionally, an unregistered shareholder may instruct that their ownership confirmation be transferred to the Company via the electronic voting system until the closing time of the electronic voting system, six (6) hours before the start of the meeting as detailed in Section 11 below.

9. Voting via Voting Paper and Position Statements

9.1 Shareholders are entitled to vote on the items on the agenda via a voting paper. The voting paper (together with all documents to be attached to it) must be submitted to the Company's offices at 1 Virginia St., Western Industrial Zone, Beit Shemesh (hereinafter: the "Company's Offices"), so that the voting paper reaches the Company's offices no later than four (4) hours before the meeting time, i.e., on May 17, 2026, at 13:00.

9.2 Written voting will be done on the second part of the voting paper as published on the Distribution Site and in accordance with what is attached as Appendix A to this convening report.

9.3 A shareholder may contact the Company directly and receive from it, free of charge, the version of the voting paper and position statements.

9.4 A TASE member shall send, free of charge, by email, a link to the version of the voting paper and position statements on the Distribution Site to every shareholder who is not registered in the shareholder register and whose shares are registered with that TASE member, unless the shareholder notified that they are not interested in this, or notified that they wish to receive voting papers by mail in exchange for payment of shipping fees, provided that the notice was given regarding a specific securities account and at a date prior to the record date.

9.5 A shareholder whose shares are registered with a TASE member is entitled to receive ownership confirmation from the TASE member through which they hold their shares at a branch of the TASE member or by mail to their address for shipping fees only, if requested. A request regarding this was given in advance for a specific securities account.

9.6 The Company will send a voting paper free of charge to the shareholders registered in the shareholder register on the day of publication of the meeting notice.

9.7 The version of the voting paper in which voting can be done is attached as Appendix A to this convening report and the version of the position statements as defined in Section 88 of the Companies Law, to the extent provided, are available for review on the website of the Tel Aviv Stock Exchange Ltd., at: http://maya.tase.co.il and on the distribution site of the Securities Authority at www.magna.isa.gov.il.

One or more shareholders holding shares on the record date in a rate constituting five percent or more of the total voting rights in the Company, which is an amount of approximately 457,669 shares as of this date, as well as anyone holding such a rate of the total voting rights that are not held by the controlling shareholder in the Company as defined in Section 268 of the Companies Law, which is an amount of approximately 390,768 shares as of this date, is entitled to review the voting papers as detailed in Regulation 10 of the Companies Regulations (Written Voting and Position Statements), 5766-2005.

9.9 The deadline for submitting position statements is up to 10 days before the meeting date, i.e., until May 7, 2026. The deadline for submitting the Board of Directors' response to position statements, if and to the extent that position statements are submitted by shareholders and the Board of Directors chooses to submit its response to the aforementioned position statements, is no later than five (5) days before the meeting date.

10. Voting via Electronic Voting System

10.1 Shareholders are entitled to vote regarding all items on the agenda via an electronic voting system operated by the Securities Authority at the internet address: https://votes.isa.gov.il (hereinafter: the "Electronic Voting System").

10.2

A shareholder for whom a share is registered with a TASE member, and that share is included among the shares registered in the register of shareholders in the name of the Company's nominee company, is entitled to receive an identification number and access code from the TASE member, as well as additional information regarding the meeting, and after a secure identification process, will be able to vote in the electronic voting system. As stated in Section 9.2 above, a shareholder voting via an electronic voting card is not required to provide the Company with a certificate of ownership in the manner detailed in Section 9.2 above.

10.3

After the record date, upon receipt of an identification number and access code from the TASE member, and after an identification process, an unregistered shareholder will be able to vote in the electronic system operating according to Article B of Chapter G'2 of the Securities Law. Alternatively, identification in the voting system is also possible using a smart ID card. The address of the electronic voting system, as defined in Section 44(11) of the Securities Law is: https://votes.isa.gov.il.

10.4

In accordance with and subject to the conditions set forth in the Written Voting Regulations and the instructions of the Securities Authority regarding this matter, voting via the electronic voting system will be possible from the day after the record date and until six (6) hours before the meeting's convening time or at an earlier time to be determined by the Securities Authority, provided that it does not exceed 12 hours before the meeting's convening time (hereinafter: "System Closing Time"). It is clarified that voting via the electronic voting system shall be subject to change or cancellation until the System Closing Time, and it will not be possible to change it via the system after this time.

Proxy Card

11.1

In accordance with the Company's Articles of Association, shareholders of the Company may appoint a proxy to participate and vote in their place, as detailed below.

11.2

The Proxy Card shall be signed by the shareholder or by an authorized representative in writing, and if the appointor is a corporation, it shall be signed in a manner binding the corporation. The Company may require that a written certificate be provided to its satisfaction regarding the authority of the signatories to bind the corporation. A Proxy Card will be prepared in the format attached as Appendix B to this report (hereinafter: "Proxy Card").

11.3

The Company Secretary or the Company's Board of Directors shall be entitled, at their discretion, to accept a Proxy Card in a different format, provided that the changes are not material. The Company will only accept an original Proxy Card or a copy of the Proxy Card, provided that it is certified by a notary or an attorney with an Israeli license.

11.4

A registered shareholder may grant several Proxy Cards, each referring to a different amount of Company shares held by them, provided that they do not grant Proxy Cards for a quantity of shares greater than the quantity held by them. In the event that the appointee does not hold an Israeli ID card, the passport number and the country that issued it should also be specified instead.

11.5

Voting according to the Proxy Card will be legal even if the appointor passed away beforehand, or became legally incompetent, or went bankrupt, or if it is a corporation - dissolved, or canceled the Proxy Card, or transferred the share regarding which it was given, unless a written notice was received at the Company's office before the meeting that such an event occurred.

11.6

Subject to the provisions of any law, the Company Secretary shall be entitled, at their discretion, to disqualify Proxy Cards if there is a reasonable concern that they are forged or that they were given by virtue of shares for which other Proxy Cards were given.

11.7

The Proxy Card shall be deposited at the Company's offices (1 Virginia St., Western Industrial Zone, Beit Shemesh) at least two (2) business days before the general meeting date, unless the Company waived this requirement.

11.8

A proxy does not have to be a shareholder in the Company. The above shall also apply to a shareholder, which is a corporation, appointing a person to participate and vote in its place at the general meeting.

12. Voting in more than one way

It should be noted that in accordance with Section 83(d) of the Companies Law, if a shareholder voted in more than one way as stated, his later vote will be counted, where a vote by a shareholder himself at the meeting or through a proxy shall be considered later than voting via a voting paper or via the electronic voting system.

13. Adding an item to the agenda

The deadline for submitting a request to include an item on the agenda in accordance with Section 66(b) of the Companies Law is up to seven days after the date of the meeting's convocation. In the event that new items are included on the agenda, their details will appear on the website of the Tel Aviv Stock Exchange Ltd., at the address: http://maya.tase.co.il and on the distribution website of the Israel Securities Authority at the address www.magna.isa.gov.il.

14. Review of documents and company representative

14.1. The text of the proposals set forth in full in the agenda within the framework of this convocation report.

14.2. The company's representative for the purpose of handling this report is Adv. Shahar Hananel, the company's external legal counsel from the firm of Naschitz, Brandes, Amir & Co., Advocates, Tel: 03-6235009; Fax: 03-6235081.

Sincerely,

Bet Shemesh Engines Holdings (1997) Ltd.

By: Dov Feldman, CFO

Appendix A

Proxy Card

[Separate file attached]

Appendix B

Letter of Authorization

Date: ___

Bet Shemesh Engines Holdings (1997) Ltd.

1 Virginia St., Western Ind. Zone,

Beit Shemesh

Dear Sir/Madam,

Subject: General and Special Meeting of Bet Shemesh Engines Holdings (1997) Ltd. (the "Company")

To be held on ___ 2026 (the "Meeting")

I, the undersigned, __, ID/Registration No. __, of __, being the registered owner of __ ordinary shares of NIS 1 par value each of the Company, hereby authorize __ ID __ and/or __ ID __ and/or __ ID __ to participate and vote in my name and stead at the Subject Meeting and at any adjourned meeting thereof.

In witness whereof, I have hereunto set my hand on the __ day of __ in the year ___.

Signature

4/8/2026 | 3:54:00 PM

AI assistant

Bet Shemesh Engines Holdings (1997) Ltd. Proxy Solicitation & Information Statement 2026

6685_rns_2026-04-09_836d1976-c0f4-462f-9c25-5ccdafda35a4.pdf

Bet Shemesh Engines Holdings (1997) Ltd.

Public Company No. 520043480

Immediate report regarding the convening of a General and Special Meeting of the Company's Shareholders

1. Place and Date of the Meeting

2. On the Meeting's Agenda

3. Item No. 1: Approval of a salary increase for the Company's CEO, Mr. Ram Drori, in deviation from the Remuneration Policy.

3.1. Details regarding Mr. Ram Drori and his current terms of office

Proposed resolution version:

4. The majority required for the approval of the resolutions on the agenda

5. Notice of Personal Interest

6. The Record Date

7. Quorum and Adjourned Meeting

8. Ownership Certification

9. Voting via Voting Paper and Position Statements

10. Voting via Electronic Voting System

12. Voting in more than one way

13. Adding an item to the agenda

14. Review of documents and company representative

Appendix B

Letter of Authorization

AI assistant

Bet Shemesh Engines Holdings (1997) Ltd. — Proxy Solicitation & Information Statement 2026

6685_rns_2026-04-09_836d1976-c0f4-462f-9c25-5ccdafda35a4.pdf

Bet Shemesh Engines Holdings (1997) Ltd.

Public Company No. 520043480

Immediate report regarding the convening of a General and Special Meeting of the Company's Shareholders

1. Place and Date of the Meeting

2. On the Meeting's Agenda

3. Item No. 1: Approval of a salary increase for the Company's CEO, Mr. Ram Drori, in deviation from the Remuneration Policy.

3.1. Details regarding Mr. Ram Drori and his current terms of office

Proposed resolution version:

4. The majority required for the approval of the resolutions on the agenda

5. Notice of Personal Interest

6. The Record Date

7. Quorum and Adjourned Meeting

8. Ownership Certification

9. Voting via Voting Paper and Position Statements

10. Voting via Electronic Voting System

12. Voting in more than one way

13. Adding an item to the agenda

14. Review of documents and company representative

Appendix B

Letter of Authorization

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