<SEC-DOCUMENT>0001178913-17-001275.txt : 20170504
<SEC-HEADER>0001178913-17-001275.hdr.sgml : 20170504
<ACCEPTANCE-DATETIME>20170504073231
ACCESSION NUMBER:		0001178913-17-001275
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20170504
FILED AS OF DATE:		20170504
DATE AS OF CHANGE:		20170504

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GILAT SATELLITE NETWORKS LTD
		CENTRAL INDEX KEY:			0000897322
		STANDARD INDUSTRIAL CLASSIFICATION:	RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-21218
		FILM NUMBER:		17811869

	BUSINESS ADDRESS:	
		STREET 1:		C/O GILAT SATELLITE NETWORKS INC
		STREET 2:		1651 OLD MEADOW RD
		CITY:			MCLEAN
		STATE:			VA
		ZIP:			22102
		BUSINESS PHONE:		7037349401

	MAIL ADDRESS:	
		STREET 1:		GILAT HOUSE YEGIA KAPAYIM STREET
		STREET 2:		DANIV PARK
		CITY:			KIRYAT ARYE PETAH TI
		STATE:			L3
		ZIP:			00000
</SEC-HEADER>
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<div style="TEXT-ALIGN: center; LINE-HEIGHT: 1.25">FORM 6 &#8211; K</div>
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<div style="TEXT-ALIGN: center; FONT: bold 14pt/1.25 'Times New Roman', Times, serif">SECURITIES AND EXCHANGE COMMISSION</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Washington, D.C. 20549</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Report on Foreign Issuer</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Pursuant to Rule 13a &#8211; 16 or 15d &#8211; 16</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">of the Securities Exchange Act of 1934</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">For the Month of May, 2017</div>

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<div style="TEXT-ALIGN: center; FONT: bold 16pt/1.25 'Times New Roman', Times, serif"><u>Gilat Satellite Networks Ltd.</u></div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">(Translation of Registrant's Name into English)</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Gilat House, Yegia Kapayim Street</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Daniv Park, Kiryat Arye, Petah Tikva, Israel</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">(Address of Principal Corporate Offices)</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; LINE-HEIGHT: 1.25">Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Form 20-F &#9746;<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 1px; DISPLAY: inline-block; WIDTH: 9pt">&#160;</font>Form 40-F &#9744;</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; LINE-HEIGHT: 1.25">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.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Yes &#9744;<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 1px; DISPLAY: inline-block; WIDTH: 9pt">&#160;</font>No &#9746;</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; LINE-HEIGHT: 1.25">If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):&#160;&#160; <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><u>N/A</u></font></div>

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<div style="LINE-HEIGHT: 1.25">Attached hereto and incorporated by reference herein is Registrant's proxy statement to shareholders dated May 4, 2017.</div>

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<div style="TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Signature</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; LINE-HEIGHT: 1.25">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.</div>

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<table id="z4b1f85663b5c44c7a617889c461ff5f9" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; LINE-HEIGHT: 1.25">Gilat Satellite Networks Ltd.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; LINE-HEIGHT: 1.25">(Registrant)</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; LINE-HEIGHT: 1.25">Dated May 4, 2017</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; LINE-HEIGHT: 1.25">By: <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">/s/ Yael Shofar</font></div>
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<div>Yael Shofar</div>
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<div>General Counsel</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">GILAT SATELLITE NETWORKS LTD.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Gilat House</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">21 Yegia Kapayim St.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Kiryat Arye</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Petah Tikva 4913020, Israel</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">____________________</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">NOTICE OF ANNUAL <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">GENERAL MEETING OF SHAREHOLDERS</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">To be held on June 8, 2017</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">To our Shareholders:</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 35.45pt">We cordially invite you to t<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">he Annual</font>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">General Meeting of Shareholders of Gilat Satellite Networks Ltd. (the "</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Company</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">") to be held </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">at the offices of the Company at </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">21 Yegia Kapayim Street, Kiryat Arye, Petah Tikva 4913020, Israel, on June 8, 2017 at 2 p.m. Israel time for the following purposes (the "</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Meeting</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">"):</font></div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; WIDTH: 18pt; align: right">1.</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">To re-elect seven members of the Board of Directors until our next annual general meeting of shareholders and until their successors have been duly elected and qualified;</div>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; WIDTH: 18pt; align: right">2.</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">To elect Mr. Elyezer Shkedy to serve as an external director effective as of the date of the Meeting for a three-year term;</div>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; WIDTH: 18pt; align: right">3.</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Subject to his election under Item 2, to approve a grant of options to Mr. Shkedy;</div>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; WIDTH: 18pt; align: right">4.</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">To amend our compensation policy for the Company's directors and officers; and</div>
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<table id="z80ddd54df3e34dffb8a790e6b9fc3666" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; WIDTH: 18pt; align: right">5.</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">To ratify and approve the reappointment and compensation of Kost Forer Gabbay &amp; Kasierer, a member of Ernst &amp; Young Global, as our independent registered public accountants for the fiscal year ending December 31, 2017, and for such additional period until the next annual general meeting of shareholders;</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">In addition, our consolidated financial statements for the year ended December 31, 2016 will be received and considered at the Meeting.</div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25"><font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 1px; DISPLAY: inline-block; WIDTH: 35.45pt">&#160;</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Our Board of Directors recommends that you vote "<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">FOR</font>" all proposals under Items 1 through 5, which are described in the attached Proxy Statement.</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 35.45pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Shareholders of record at the close of business on May 9, 2017 (the "</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Record Date</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">"), are entitled to notice of and to vote at the Meeting and any adjournments thereof. You can vote either by mailing in your proxy or in person by attending the Meeting. Only proxies that are received at the offices of the Company at 21 Yegia Kapayim Street, Kiryat Arye, Petah Tikva 4913020, Israel, no later than 2 p.m. Israel time, on June 8, 2017, will be deemed received in a timely fashion and the votes therein recorded. If you attend the Meeting, you can revoke your proxy and vote your shares in person. Detailed proxy voting instructions are provided both in the proxy statement and on the enclosed proxy card. </font>Shareholders who hold shares through members of the Tel Aviv Stock Exchange may also vote electronically via the electronic voting system of the Israel Securities Authority up to six hours before the time fixed for the Meeting. You should receive instructions about electronic voting from the Tel Aviv Stock Exchange member through which you hold your shares. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Shareholders may send the Company position papers no later than May 29, 2017, </font>and the last date for submitting a request to include a proposal in accordance with Section 66(b) of the Israel Companies Law, 5759-1999 (the "<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">ICL</font>")) is May 11, 2017.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 35.45pt">According to Israel's Companies Law Regulations (Confirmation of Ownership of Shares for Voting at the General Meeting), 2000, if a shareholder holds shares through a member of the Tel-Aviv Stock Exchange Ltd. (TASE Member) and the ordinary shares are registered in the name of such TASE Member on the books of our registration company, the shareholder may provide the Company, prior to the meeting, with a certification confirming his ownership of the ordinary shares on the record date. Such certification may be obtained at the TASE Member's offices or may be sent to the shareholder by mail (subject to payment of the cost of mailing), at the election of the shareholder; provided that the shareholder's request is submitted with respect to a specific securities account.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">Pursuant to the Company's Articles of Association, the quorum required for the General Meeting consists of at least two shareholders present, in person or by proxy, who hold or represent between them at least 25% of the Company's issued and outstanding share capital.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">The approval of each of the proposals in Items Nos. 1, 2, 3, 4 and 5 require the affirmative vote of a majority of the ordinary shares present, in person or by proxy, and voting on such proposal (not taking into consideration abstentions).&#160; In addition, in order to approve each of Items 2, 3 and 4, the shareholders' approval must either (i) include at least a majority of the ordinary shares voted by shareholders who are not controlling shareholders (within the meaning of the ICL) and who are not shareholders who have a personal interest (within the meaning of the ICL) in the approval of such proposal (excluding a personal interest that is not related to a relationship with the controlling shareholders), not taking into consideration abstentions, or (ii) be obtained such that the total ordinary shares of non-controlling shareholders and non-interested shareholders voted against such proposal do not represent more than two percent of the outstanding ordinary shares.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 35.45pt">Shareholders may also review the proxy statement at our principal executive offices stated above, upon prior notice and during regular working hours (telephone number: +972-925-2166) until the date of the Meeting. Copies of this notice, the proxy statement and the proxy card for the meeting will also be available at the following websites: <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><u>www.edgar.gov</u></font>, <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><u>http://www.tase.co.il/tase/</u></font>, <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><u>http://www.magna.isa.gov.il</u></font> (the distribution sites), and <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><u>http://www.gilat.com</u></font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">.</font></div>

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<div>By Order of the Board of Directors,</div>

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<div>Dov Baharav</div>

<div>Chairman of the Board of Directors</div>
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<div style="LINE-HEIGHT: 1.25">May 4, 2017</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">GILAT SATELLITE NETWORKS LTD.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Gilat House</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">21 Yegia Kapayim St.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Kiryat Arye</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Petah Tikva 4913020, Israel</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">PROXY STATEMENT</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">ANNUAL GENERAL MEETING OF SHAREHOLDERS</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">To be held on June 8, 2017</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">This Proxy Statement is furnished to the holders of ordinary shares of Gilat Satellite Networks Ltd. ("</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Gilat</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">", "</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">we</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">", "</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">our</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">" or the "</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Company</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">") in connection with the solicitation of proxies by the Board of Directors of the Company for use at the Annual General Meeting of Shareholders of the Company to be held at the offices of the Company at 21 Yegia Kapayim Street, Kiryat Arye, Petah Tikva, Israel, on June </font>8,<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> 2017, at 2 p.m. Israel time, and at any adjournment thereof, pursuant to the accompanying Notice of our 2017 Annual General Meeting of Shareholders (the "</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Meeting</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">").</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">The Notice of Meeting, this Proxy Statement and the enclosed proxy card are being mailed to our shareholders on or about May 10, 2017.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; LINE-HEIGHT: 1.25">Purpose of the Annual General Meeting</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">At the Meeting, our shareholders will be asked to vote upon the following matters:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; WIDTH: 18pt; align: right">1.</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">To re-elect seven members of the Board of Directors until our next annual general meeting of shareholders and until their successors have been duly elected and qualified;</div>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; WIDTH: 18pt; align: right">2.</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">To elect Mr. Elyezer Shkedy to serve as an external director effective as of the date of this Meeting for a three-year term;</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Subject to his election under Item 2, to approve a grant of options to Mr. Shkedy;</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">To amend our compensation policy for the Company's directors and officers; and</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">To ratify and approve the reappointment and compensation of Kost Forer Gabbay &amp; Kasierer, a member of Ernst &amp; Young Global, as our independent registered public accountants for the fiscal year ending December 31, 2017, and for such additional period until the next annual general meeting of shareholders; when this proposal is raised, you will also be invited to discuss our 2016 consolidated financial statements.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">Voting at the Meeting</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Only holders of record of our ordinary shares, </font>nominal<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> value NIS 0.20 per share, as of the close of business on May 9, 2017, are entitled to notice of, and to vote at the Meeting.&#160; Shareholders can vote their ordinary shares at the Meeting in person or by proxy:</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Voting in Person.</font>&#160; If your shares are registered directly in your name with our transfer agent (i.e. you are a "registered shareholder"), you may attend and vote in person at the Meeting.&#160; If you are a beneficial owner of shares registered in the name of your broker, bank, trustee or nominee (i.e. your shares are held in "street name"), you are also invited to attend the Meeting; however, to vote in person at the Meeting as a beneficial owner, you must first obtain a "legal proxy" from your broker, bank, trustee or nominee, as the case may be, authorizing you to do so.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Voting by Proxy.</font>&#160; You may submit your proxy by mail by completing, signing and mailing the enclosed proxy card in the enclosed, postage-paid envelope, or, for shares held in street name, by following the voting instructions provided by your broker, bank, trustee or nominee.&#160; The proxy must be received by our transfer agent or at our registered office in Israel by no later than 2 p.m. Israel time, on June 8, 2017, to be validly included in the tally of ordinary shares voted at the Meeting.&#160; Upon the receipt of a properly signed and dated proxy in the form enclosed, the persons named as proxies therein will vote the ordinary shares represented thereby in accordance with the instructions of the shareholder indicated thereon, or, if no direction is indicated, in accordance with the recommendations of our Board of Directors.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Shares Traded on TASE.</font> Shareholders who hold shares through members of the TASE may vote in person or vote through the enclosed form of proxy by completing, signing, dating and mailing the proxy with a copy of their identity card, passport or certificate of incorporation, as the case may be, to the Company's offices.&#160; Shareholders who hold shares through members of the TASE and intend to vote their shares either in person or by proxy must deliver to the Company an ownership certificate confirming their ownership of the Company's shares on the Record Date, which must be certified by a recognized financial institution, as required by the Israeli Companies Regulations (Proof of Ownership of Shares for Voting at General Meeting) of 2000, as amended.&#160; Alternatively, shareholders who hold shares through members of the Tel Aviv Stock Exchange may vote electronically via the electronic voting system of the Israel Securities Authority up to six hours before the time fixed for the General Meeting. You should receive instructions about electronic voting from the Tel Aviv Stock Exchange member through which you hold your shares.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">We will bear all expenses of this solicitation. In addition to the solicitation of proxies by mail, our directors, officers and employees, without receiving additional compensation therefor, may solicit proxies by telephone, facsimile, in person or by other means. We may also engage a professional proxy solicitation firm, the costs of which will be borne by us.&#160; Brokerage firms, nominees, fiduciaries and other custodians have been requested to forward proxy solicitation materials to the beneficial owners of our ordinary shares held of record by such persons, and we will reimburse such brokerage firms, nominees, fiduciaries and other custodians for reasonable out&#8209;of&#8209;pocket expenses incurred by them in connection therewith.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">Revocation of Proxy</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">If you are a registered shareholder, you may change your vote at any time prior to the exercise of authority granted in the proxy by delivering a timely written notice of revocation to our Corporate Secretary, by granting a new proxy bearing a later date, or by attending the Meeting and voting in person. Attendance at the Meeting will not cause your previously granted proxy to be revoked unless you specifically so request. If your shares are held in street name, you may change your vote by submitting new voting instructions to your broker, bank, trustee or nominee or, if you have obtained a legal proxy from your broker, bank, trustee or nominee giving you the right to vote your shares, by attending the Meeting and voting in person.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">Any written instrument revoking a proxy should be received, no later than 2 p.m., Israel time, on June 8, 2017, by Gilat Satellite Networks Ltd., c/o American Stock Transfer &amp; Trust Company, 6201 15<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">th</sup> Ave., Brooklyn, NY 11219 or at our registered office in Israel, 21 Yegia Kapayim St., Kiryat Arye, Petah Tikva 4913020, Israel.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">Required Votes</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">Each of our ordinary shares is entitled to one vote on each matter to be voted on at the Meeting.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 35.45pt">The approval of each of the proposals in <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Items Nos. 1, 2, 3, 4 and 5 require the affirmative vote of a majority of the ordinary shares present, in person or by proxy, and voting on such proposal (not taking into consideration abstentions).&#160; In addition, in order to approve each of Items 2, 3 and 4, </font>the shareholders' approval must either (i) include at least a majority of the Ordinary Shares voted by shareholders who are not controlling shareholders (within the meaning of the ICL) and who are not shareholders who have a personal interest (within the meaning of the ICL) in the approval of such proposal (excluding a personal interest that is not related to a relationship with the controlling shareholders), not taking into consideration abstentions, or (ii) be obtained such that the total Ordinary Shares of non-controlling shareholders and non-interested shareholders voted against such proposal do not represent more than two percent of the outstanding Ordinary Shares.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">In tabulating the voting result for any particular proposal, shares that constitute broker non-votes and abstentions are not considered votes cast on that proposal, but they will be counted to determine if a quorum is present. Unsigned or unreturned proxies, including those not returned by banks, brokers, or other record holders, will not be counted for voting purposes.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">Quorum</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">The presence, in person or by properly executed proxy, of two or more shareholders, holding shares conferring in the aggregate at least </font>25%<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> of the voting power of the Company, is necessary to constitute a quorum at the Meeting.&#160; If within one-half of an hour from the time appointed for the Meeting a quorum is not present, the Meeting will be adjourned to the same day in the next week, at the same time and place, or to such later day and at such other time and place as the Chairman of the Meeting may determine with the consent of a majority of the voting power present at the meeting, in person or by proxy, and voting on the question of adjournment.</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">Shares Outstanding</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">As of April 30, 2017, the Company had</font> 54,661,667<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> ordinary shares outstanding. American Stock Transfer &amp; Trust Company is the transfer agent and registrar for our ordinary shares.</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">AFTER CAREFUL CONSIDERATION, OUR BOARD OF DIRECTORS HAS APPROVED ALL THE PROPOSALS DESCRIBED IN THIS PROXY STATEMENT AND RECOMMENDS THAT OUR SHAREHOLDERS VOTE "</font>FOR" EACH OF THE NOMINEES FOR DIRECTOR NAMED IN THIS PROXY STATEMENT AND<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> "FOR" EACH OF THE OTHER PROPOSALS SET FORTH IN THIS PROXY STATEMENT.</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Item I. RE-ELECTION OF DIRECTORS</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">(Item 1 on the Proxy Card)</div>

<div style="LINE-HEIGHT: 1.25">&#160;</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Each of our directors, with the exception of our external directors, serves from the annual general meeting in which he or she was appointed until the next annual general meeting and until that director's successor is appointed, </font>unless his or her office is earlier vacated under any relevant provision of the Articles of Association of the Company or the law.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">In accordance with Israeli law and practice, our Board of Directors is authorized to recommend to our shareholders director nominees for election. Accordingly, our Board has nominated the directors named below for re-election to our Board of Directors. We are unaware of any reason why any of the nominees, if elected, would be unable to serve as a director. Each of the nominees listed below has advised our Board of Directors that he or she intends to serve as director if elected.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Our Board of Directors has nominated seven of our current directors, Messrs. </font>Dov Baharav<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">, Amiram Boehm, </font>Ishay Davidi<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">, </font>Amir Ofek, <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Aylon (Lonny) Rafaeli, Meir Shamir and Ms. Dafna Sharir for re-election. If re-elected at the Meeting, Mr. Baharav shall continue to serve as Chairman of the Board of Directors following the Meeting.</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">The Company has two additional directors who serve as the Company's "external directors" in accordance with the ICL, Dr. Zvi Lieber whose term is expiring and is not standing for re-election at the Meeting, and Ms. Dafna Cohen, whose term expires in December 2017. As set forth in Item No. 2, Mr. Shkedy is nominated to replace Dr. Lieber as an external director.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">In accordance with the ICL, each of the nominees for election to our Board of Directors (as well as&#160;our external directors) has certified to us that he or she meets all the requirements of the ICL for election as a director of a public company, and possesses the necessary qualifications and has sufficient time,&#160;to fulfill his or her duties as a director of the company, taking into account the company's size and special needs.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">During the past year, all of our directors attended more than 75% of our Board of Directors meetings and more than 75% of the meetings of each of the Committees of the Board of Directors on which they serve.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">Nominees for the Board of Directors of the Company</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">It is proposed that at the Meeting each of the following persons be elected to serve as a member of the Board of Directors of the Company until the next annual general meeting of shareholders and until their successors have been duly elected and qualified.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; LINE-HEIGHT: 1.25">Dov Baharav</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">Amiram Boehm</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">45</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">Amir Ofek</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">Aylon (Lonny) Rafaeli</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">Meir Shamir</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">Dafna Sharir</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">The following information concerning the nominees is based on the records of the Company and information furnished to it by the nominees:</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; FONT-STYLE: italic">Dov Baharav</font>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">has served as the Chairman of our Board of Directors since May 2014 and also served as our interim Chief Executive Officer from May 2015 until March 31, 2016. </font>Mr.&#160;Baharav has served as the chairman of the board of directors of Cyberint Inc., a provider of cyber security services and products solutions, since October&#160;2014.<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> Mr. Baharav </font>has served as a member of the board of directors of Mellanox Technologies Ltd., a supplier of end-to-end InfiniBand and Ethernet connectivity solutions and services for servers and storage, since November 2010. Mr.&#160;Baharav served as the chairman of the board of directors of Israel Aerospace Industries,&#160;Ltd., a defense and civil aerospace technology company, from July 2011 until&#160;October&#160;2013. Mr. Baharav served as a member of the Board of directors of Allot Communications Ltd., a global provider of intelligent broadband solutions, from March 2013 until July 2014. From July 2002 until November 2010, Mr.&#160;Baharav served as president and chief executive officer of Amdocs Limited, a communications services company. He also served as a member of Amdocs' board of directors and executive committee from July 2002 until November 2010. Mr.&#160;Baharav joined Amdocs in 1991 as vice president and then became president of Amdocs' principal U.S. subsidiary, Amdocs,&#160;Inc., and served as chief financial officer of Amdocs from 1995 until June 2002. From 1983 until 1991, Mr.&#160;Baharav served as chief operating officer of Oprotech&#160;Ltd., an electro-optical device company. Mr.&#160;Baharav is Chairman of the scholarship fund of the College of Management Academic Studies in Rishon Lezion, Israel. Mr.&#160;Baharav holds a Bachelor of Science degree in Physics and Accounting, as well as an M.B.A. degree from Tel Aviv University.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; FONT-STYLE: italic">Amiram Boehm </font>has served on our Board of Directors since December 2012. Mr. Boehm<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> has been a Partner in the FIMI Opportunity Funds, Israel's largest group of private equity funds, since 2004. Mr. Boehm serves as the Managing Partner and Chief Executive Officer of FITE GP (2004), and as a director of Ormat Technologies Inc. (NYSE, TASE), Ham-Let (Israel-Canada) Ltd., Hadera Paper Ltd (TASE)., Rekah Pharmaceuticals Ltd (TASE), Pharm-up Ltd (TASE)., TAT Technologies Ltd. (NASDAQ, TASE) and DIMAR Ltd, DelekSon Ltd and Galam Ltd. Mr. Boehm previously served as a director of Scope Metal Trading, Ltd.&#160; (TASE), Inter Industries, Ltd. (TASE), Global Wire Ltd. (TASE), Telkoor Telecom Ltd. (TASE) and Solbar Industries Ltd. (previously traded on the TASE). Prior to joining FIMI, from 1999 until 2004, Mr. Boehm served as Head of Research of Discount Capital Markets, the investment arm of Israel Discount Bank. Mr. Boehm holds a B.A. degree in Economics and </font>a LL.B. degree <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">from Tel Aviv University and a Joint M.B.A. degree from Northwestern University and Tel Aviv University.</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; FONT-STYLE: italic">Ishay Davidi</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">&#160;</font>has served on our Board of Directors since December 2012. Mr. Davidi <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">is the Founder and has served as Chief Executive Officer of the FIMI Opportunity Funds, Israel's largest group of private equity funds, since 1996. Mr. Davidi currently serves as Chairman of the board of directors of Inrom Industries Ltd., Hadera Paper Ltd. (TASE) and Polyram plastics, Dimar Cutting Tools, and as director at Ham-Let (Israel-Canada) Ltd. (TASE), Rekah Pharmaceuticals Ltd. (TASE), Tadir-Gan Precision materials (TASE), </font>C. Mer Industries Ltd. (TASE), Pharm Up Ltd. (TASE), Tadir-Gan (TASE), and DelekSon Ltd. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Mr. Davidi previously served as the Chairman of the board of directors of Retalix (previously traded on NASDAQ and TASE) from August 2008 until January 2010, of Tefron Ltd. (New York Stock Exchange and TASE) and of Tadir-Gan (TASE), and as a director at Ormat Industries Ltd. (previously traded on TASE), Retalix, Tadiran Communications Ltd. (TASE), Lipman Electronic Engineering Ltd. (NASDAQ and TASE), Merhav Ceramic and Building Materials Center Ltd. (TASE), TAT Technologies Ltd. (NASDAQ and TASE), Orian C.M. Ltd. (TASE), Ophir Optronics Ltd., Overseas Commerce Ltd, (TASE), </font>Scope Metals Group Ltd. (TASE) <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">and Formula Systems Ltd. (NASDAQ and TASE). Prior to establishing FIMI, from 1993 until 1996, Mr. Davidi was the Founder and Chief Executive Officer of Tikvah Fund, a private Israeli investment fund. From 1992 until 1993 Mr. Davidi was the Chief Executive Officer of Zer Science Industries Ltd., a developer of diagnostics equipment for the healthcare industry. Mr. Davidi holds a B.Sc. degree in Industrial and Management Engineering from Tel Aviv University, Israel, and a M.B.A. degree from Bar Ilan University, Israel.</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 35.45pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; FONT-STYLE: italic">Amir Ofek </font>has served on our Board of Directors since December 2014.&#160; Mr. Ofek is Chief Executive Officer of Cyberint Inc., a provider of cyber security services and products solutions. Mr. Ofek has served as a director on the board of Cyberint since September 2014. Mr. Ofek also serves as a partner at Baharav Ventures Ltd. ("BVL"), a company wholly owned by the Chairman of our Board of Directors, Mr. Baharav. Prior to joining BVL, Mr. Ofek worked at Amdocs Inc, the leading BSS/OSS provider, from 2006 to 2014, where he served as VP Client Business Executive SingTel Group at Amdocs, based in Singapore from 2009<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">.</font> Prior to this role, Mr. Ofek served as Director of Management Services at Amdocs from 2007 to 2009 and in the Corporate Strategy unit from 2006 to 2007. Before joining Amdocs in 2006, Mr. Ofek worked for Elbit Systems Ltd., a leading aerospace defense company, from 2001 to 2005. Mr. Ofek holds a BSc. degree (Cum Laude) in Industrial Engineering and Management, majoring in Information Systems from the Technion-Israel Institute of Technology and an M.B.A. degree from the European Institute of Business Administration (INSEAD) in Fontainebleau, France.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; FONT-STYLE: italic">Aylon (Lonny) Rafaeli </font>has served on our Board of Directors since May 2016. Mr. Rafaeli<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; FONT-STYLE: italic">&#160;</font>is a strategy and business development manager and consultant. From 2007 through 2012, Mr. Rafaeli was Director of Business Development at MST, a concentrated photo voltaic company. Prior to joining MST, Mr. Rafaeli was Managing Partner at E. Barak Associates, a strategic consulting company. Prior to this role, Mr. Rafaeli was Chief Executive Officer of Hasbro Israel (toys). Mr. Rafaeli is a member of the board of directors of the TALI Education Fund and a veteran association of an IDF elite unit.&#160; Mr. Rafaeli also served in the past as a director of Lenox Investment and Azimuth Technologies. Mr. Rafaeli holds an Executive M.B.A. degree in Strategic Management from The Hebrew University of Jerusalem.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; FONT-STYLE: italic">Meir Shamir </font>has served on our Board of Directors since May 2016. Mr. Shamir is the chief executive officer and a director of Mivtach Shamir holdings Ltd., a public company traded on the Tel Aviv Stock Exchange.&#160; Mivtach Shamir is a holding company active in spotting and initiating investments in technology and in commercial real estate development in Israel and throughout Europe, the U.S. India. Mr. Shamir served as a navigator in the Israeli Air Force. Mr. Shamir is an active philanthropist and since 2012 he has served as the Head of the Presidency of "Taglit" (Birthright Israel)<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; FONT-STYLE: italic">.&#160; </font>Mr. Shamir holds a Business &amp; Economics Administration degree and received an Honorary Doctorate from Bar Ilan University.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; FONT-STYLE: italic">Dafna Sharir </font>has served on our Board of Directors since May 2016. Ms. Sharir is an independent consultant in the areas of mergers and acquisitions and business development. Ms. Sharir served as Senior Vice President Investments of Ampal Corp. between 2002 and 2005. Before that she served as Director of Mergers and Acquisitions at Amdocs (until 2002). Between 1994 and 1996, Ms. Sharir served as a tax advisor with Cravath, Swaine &amp; Moore in New York. Ms. Sharir is a director of Frutarom Industries Ltd. and served in the past as a director of Ormat Industries Inc.&#160; Ms. Sharir holds B.A. degrees in Economics and Law, both from Tel Aviv University, an LL.M. in Tax Law from New York University, and an M.B.A. degree from INSEAD.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">It is therefore proposed that at the Meeting the following resolutions be adopted:</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; MARGIN-LEFT: 36pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">"RESOLVED, to re-elect </font>Dov Baharav<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> as member of the Board of Directors of the Company, to serve until the next annual general meeting of shareholders and until </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">his successor has been duly elected and qualified.</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; MARGIN-LEFT: 36pt; LINE-HEIGHT: 1.25">FURTHER RESOLVED, to re-elect Amiram Boehm as member of the Board of Directors of the Company, to serve until the next annual general meeting of shareholders and until his successor has been duly elected and qualified.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; MARGIN-LEFT: 36pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">FURTHER RESOLVED, to re-elect </font>Ishay Davidi <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">as member of the Board of Directors of the Company, to serve until the next annual general meeting of shareholders and until his successor has been duly elected and qualified".</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; MARGIN-LEFT: 36pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">FURTHER RESOLVED, to re-elect </font>Amir Ofek<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> as member of the Board of Directors of the Company, to serve until the next annual general meeting of shareholders and until his successor has been duly elected and qualified.</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; MARGIN-LEFT: 36pt; LINE-HEIGHT: 1.25">FURTHER RESOLVED, to re-elect Aylon (Lonny) Rafaeli as member of the Board of Directors of the Company, to serve until the next annual general meeting of shareholders and until his successor has been duly elected and qualified.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; MARGIN-LEFT: 36pt; LINE-HEIGHT: 1.25">FURTHER RESOLVED, to re-elect Meir Shamir as member of the Board of Directors of the Company, to serve until the next annual general meeting of shareholders and until his successor has been duly elected and qualified.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; MARGIN-LEFT: 36pt; LINE-HEIGHT: 1.25">FURTHER RESOLVED, to re-elect Dafna Sharir as member of the Board of Directors of the Company, to serve until the next annual general meeting of shareholders and until her successor has been duly elected and qualified."</div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25"><font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 1px; DISPLAY: inline-block; WIDTH: 36pt">&#160;</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">The affirmative vote of the holders of a majority of the ordinary shares represented at the Meeting, in person or by proxy, entitled to vote and voting on the matter, are required to approve the election of each of the director nominees named above.</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">The</font>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Board of Directors recommends a vote FOR the </font>election of each nominee for Director named above.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">ITEM II.&#160; <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">ELECTION OF EXTERNAL DIRECTOR</font></div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">&#160;(Item 2 on the Proxy Card)</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">Under the ICL, public companies are required to appoint at least two external Directors who must meet specified standards of independence. An external Director is appointed for an initial term of three years, and may be reappointed for additional three-year terms, subject to certain conditions (including approval by our shareholders at a general meeting) as provided under the ICL and the regulations promulgated thereunder.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">The Company has two directors who serve as the Company's "external directors" in accordance with the ICL, Dr. Zvi Lieber whose term is expiring and is not standing for re-election at the Meeting, and Ms. Dafna Cohen, whose term expires in December 2017.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">Our Board of Directors has nominated Mr. Elyezer Shkedy to be appointed as an external director commencing upon his election at the Meeting for a three-year term. Following is Mr. Shkedy's biographical information:</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; FONT-STYLE: italic">Major General (ret.) Elyezer Shkedy, </font>59, is a business development manager and consultant. From January 2010 to March 2014, Mr. Shkedy was the Chief Executive Officer of El-Al Israel Airlines.&#160; Prior to joining El-Al, Mr. Shkedy served as Commander of the Israeli Air Force, from April 2004 until May 2008, after a long career as a fighter pilot and moving up through several command positions in the Israeli Air Force. Mr. Shkedy holds an M.A. degree (with distinction) in Systems Management from NPS, the Naval Postgraduate School in Monterey, California, USA and a B.Sc. in Mathematics and Computer Science (also with distinction) from Ben Gurion University in Israel.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">In accordance with the ICL, at least one external director elected must have "accounting and financial expertise" and any other external director must have either ''accounting and financial expertise'' or "professional qualification" as such terms are defined by regulations promulgated under the ICL.&#160; Our Board of Directors has determined </font>that the external director nominee, Mr.<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> Shkedy,</font> meets the criteria defined in the ICL and the regulations promulgated thereunder for <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">"accounting and financial expertise". </font>Our Board of Directors has also determined that Mr.<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> Shkedy </font>qualifies to serve as the "Audit Committee's financial expert", as required by the rules of the SEC and NASDAQ.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">As required under the ICL, Mr. Shkedy submitted to the Company, prior to the date of the Meeting, a declaration stating his compliance with the statutory requirements of the ICL.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 35.45pt">It is hereby proposed to elect Mr. Shkedy as an external director commencing upon his election at the Meeting for a three-year term.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">It is therefore proposed that at the Meeting the following resolution be adopted:</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; MARGIN-LEFT: 36pt; LINE-HEIGHT: 1.25">"RESOLVED, to elect Mr. Elyezer Shkedy as member of the Board of Directors of the Company, to serve for a 3-year period commencing on the date of the Meeting."</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 35.45pt">The affirmative vote of the holders of a majority of the voting power represented and voting on this proposal in person or by proxy is necessary to elect <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Mr. Shkedy </font>as an external director.&#160; In addition, the shareholders' approval must either include at least a majority of the ordinary shares voted by shareholders who are not controlling shareholders nor are they shareholders who have a personal interest in the election of the external director (excluding a personal interest that is not related to a relationship with the controlling shareholders), or the total ordinary shares of non-controlling shareholders and non-interested shareholders voted against this proposal must not represent more than two percent of the outstanding ordinary shares. For this purpose, you are asked to indicate on the enclosed proxy card whether you are a controlling shareholder or have a personal interest in the election of the external director (excluding a personal interest that is not related to a relationship with a controlling shareholder).</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 35.45pt">Under the ICL, in general, a person will be deemed to be a controlling shareholder if the person has the power to direct the activities of the company, otherwise than by reason of being a director or other office holder of the company, and you are deemed to have a personal interest if any member of your immediate family or their spouse has a personal interest in the adoption of the proposal.&#160; In addition, you are deemed to have a personal interest if a company, other than the Company, that is affiliated to you has a personal interest in the adoption of the proposal. Such company is a company in which you or a member of your immediate family serves as a director or chief executive officer, has the right to appoint a director or the chief executive officer, or owns 5% or more of the outstanding shares. However, you are not deemed to have a personal interest in the adoption of the proposal if your interest in such proposal arises solely from your ownership of our shares, or to a matter that is not related to a relationship with a controlling shareholder.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">The</font>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Board of Directors recommends a vote FOR the </font>election of Mr. Shkedy, the nominee for external director.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">ITEM III.&#160; <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">APPROVAL OF GRANT OF OPTIONS TO THE NEWLY ELECTED DIRECTOR </font></div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">UPON COMMENCEMENT OF HIS TERM OF SERVICE</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">&#160;(Item 3 on the Proxy Card)</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">Under the ICL, any arrangement between the Company and a director relating to his or her compensation as a director or other position with the Company must be in compliance with the Company's Compensation Policy for Executives Officers and Directors and requires approval of the Compensation and Stock Option Committee, the Board of Directors and the Company's shareholders, in that order.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">In addition to the cash compensation paid to our directors, our serving directors were each granted options to purchase 50,000 of our ordinary shares upon their appointment as directors of the Company.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">Our Compensation and Stock Option Committee and Board of Directors approved and recommended that our shareholders approve the grant of options to purchase 50,000 of our ordinary shares to <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Mr. Shkedy </font>upon commencement of his term of service as an external director.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">Pursuant to the terms of our Compensation Policy for Executive Officers and Directors, as proposed to be amended as described in Item 4 below, the exercise price of the options to be granted to <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Mr. Shkedy </font>will equal 5% over the closing price of the Company's ordinary shares on the NASDAQ Global Select Market on the last trading day prior to the grant date. If the proposed amendment to the Compensation Policy for Executive Officers and Directors, as described in Item 4 below, is not approved at the Meeting, the exercise price of the options will equal 8% over the closing price of the Company's ordinary shares on the NASDAQ Global Select Market on the last trading day prior to the grant date in accordance with the current terms of our Compensation Policy for Executive Officers and Directors.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">Similar to previous grants of options to other Company directors, the options will vest and become exercisable quarterly over a three year period so long as the director continues to serve as a director, and will be exercisable for 12 months following cessation or termination of his service (other than for cause).</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">It is therefore proposed that at the Meeting the following resolution be adopted:</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; MARGIN-LEFT: 35.45pt; LINE-HEIGHT: 1.25">"<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">RESOLVED, </font>subject to his election under Item 2, to approve a grant of options to <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Mr. Elyezer Shkedy </font>upon commencement of his term of service as set forth in this Proxy Statement<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">."</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 35.45pt">The affirmative vote of the holders of a majority of the voting power represented and voting on this proposal in person or by proxy is necessary to grant options to Mr.<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> Shkedy</font>.&#160; In addition, the shareholders' approval must either include at least a majority of the ordinary shares voted by shareholders who are not controlling shareholders nor are they shareholders who have a personal interest in the grant of options to the external director (excluding a personal interest that is not related to a relationship with the controlling shareholders), or the total ordinary shares of non-controlling shareholders and non-interested shareholders voted against this proposal must not represent more than two percent of the outstanding ordinary shares. For this purpose, you are asked to indicate on the enclosed proxy card whether you are a controlling shareholder or have a personal interest in the grant of options (excluding a personal interest that is not related to a relationship with a controlling shareholder).</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">The</font>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Board of Directors recommends a vote FOR the </font>grant of options to Mr. Shkedy, the nominee for external director.<br style="LINE-HEIGHT: 1.25">
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">ITEM IV.&#160; AMENDMENT OF THE COMPENSATION POLICY FOR THE COMPANY'S </div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">DIRECTORS AND OFFICERS</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">(Item 4 on the Proxy Card)</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Pursuant to the ICL, all public Israeli companies, including companies whose shares are publicly-traded outside of Israel, such as Gilat, are required to adopt a written compensation policy for their executives and directors, which addresses certain items prescribed by the ICL. In accordance with the ICL, the adoption, amendment and restatement of the policy is to be recommended by the Compensation Committee and approved by the Board of Directors and shareholders, and such policy must be reviewed and readopted within three years from the original adoption date. The Company's Compensation Policy for Executive Officers and Directors was last reviewed and approved by the </font>Compensation and Stock Option Committee, the Board of Directors and shareholders in May 2016.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Under the terms of our Compensation Policy for Executive Officers and Directors, the exercise price of options granted to our executives and directors shall not be less than 8% over the closing price of the Company's ordinary shares on the NASDAQ Global Select Market on the last trading day prior to the grant date. </font>In order to enable the Company to attract and retain highly skilled executives and directors, our Compensation and Stock Option Committee has reviewed the Company's policy and recommended that the policy be amended such that <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">the minimum exercise price of options to be granted to executives and officers be no less than</font>&#160;5% over the closing price of the Company's ordinary shares on the NASDAQ Global Select Market on the last trading day prior to the grant date. O<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">ur Board of Directors subsequently approved the recommendation </font>of the Compensation and Stock Option Committee <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">and recommended that the Company's shareholders approve such amendment.</font></div>

<div style="LINE-HEIGHT: 1.25">&#160;</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">It is therefore proposed that at the Meeting the following resolution be adopted:</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">&#160;"RESOLVED, to amend the Company's Compensation Policy for Executive Officers and Directors as set forth in Item 4 of the Proxy Statement."</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 35.45pt">The affirmative vote of the holders of a majority of the voting power represented and voting on this proposal in person or by proxy is necessary to amend the <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Compensation Policy for Executive Officers and Directors</font>.&#160; In addition, the shareholders' approval must either include at least a majority of the ordinary shares voted by shareholders who are not controlling shareholders nor are they shareholders who have a personal interest in the amendment to the <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Compensation Policy for Executive Officers and Directors</font> (excluding a personal interest that is not related to a relationship with the controlling shareholders), or the total ordinary shares of non-controlling shareholders and non-interested shareholders voted against this proposal must not represent more than two percent of the outstanding ordinary shares. For this purpose, you are asked to indicate on the enclosed proxy card whether you are a controlling shareholder or have a personal interest in the amendment to the <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Compensation Policy for Executive Officers and Directors</font> (excluding a personal interest that is not related to a relationship with a controlling shareholder).</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">The</font>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Board of Directors recommends a vote FOR the amendment to the Compensation Policy for Executive Officers and Directors.</font></div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">&#160;&#160;&#160;&#160;&#160;ITEM V.&#160;&#160; RATIFICATION AND APPROVAL OF REAPPOINTMENT AND </div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">COMPENSATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">(Item 5 on the Proxy Card)</div>

<div style="LINE-HEIGHT: 1.25">&#160;</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Kost Forer Gabbay &amp; Kasierer, our independent </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">registered public accountants, and a Member of Ernst &amp; Young Global, have been our independent registered public accountants since 2000. It is proposed that at the Meeting, the Company's shareholders will ratify and approve the re-appointment of Kost Forer Gabbay &amp; Kasierer as our independent registered public accountants for the fiscal year ending December 31, 2017 and for such additional period until the next annual general meeting of shareholders. In light of the familiarity of Kost Forer Gabbay &amp; Kasierer with our operations and </font>their <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">reputation in the auditing field, our Audit Committee and Board of Directors believe that the firm has the necessary personnel, professional qualifications and independence to act as our independent registered public accountants.</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">The following table sets forth the fees we paid to Kost Forer Gabbay &amp; Kasierer with respect to fiscal year 2016:</div>

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<table id="z1fc61759f1f944f3b4b937eb01557372" style="FONT-SIZE: 10pt; BORDER-TOP: medium none; FONT-FAMILY: 'Times New Roman', Times, serif; BORDER-RIGHT: medium none; BORDER-BOTTOM: medium none; BORDER-LEFT: medium none; WIDTH: 65%" cellspacing="0" cellpadding="3" align="center" border="0">
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<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: medium none; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; BORDER-LEFT: #000000 2px solid; WIDTH: 36.84%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Services Rendered</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: medium none; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; BORDER-LEFT: #000000 2px solid; WIDTH: 36.85%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Fees</div>
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<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; BORDER-LEFT: #000000 2px solid; WIDTH: 26.31%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Percentages</div>
</td>
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<tr>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: medium none; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; BORDER-LEFT: #000000 2px solid; WIDTH: 36.84%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Audit</font> fees<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> (1)</font></div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: medium none; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; BORDER-LEFT: #000000 2px solid; WIDTH: 36.85%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">$698,977</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; BORDER-LEFT: #000000 2px solid; WIDTH: 26.31%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">91.53%</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: medium none; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; BORDER-LEFT: #000000 2px solid; WIDTH: 36.84%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Tax</font> fees<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> (2)</font></div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: medium none; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; BORDER-LEFT: #000000 2px solid; WIDTH: 36.85%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">&#160;$29,000</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; BORDER-LEFT: #000000 2px solid; WIDTH: 26.31%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">3.80%</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: medium none; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; BORDER-LEFT: #000000 2px solid; WIDTH: 36.84%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Other (3)</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: medium none; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; BORDER-LEFT: #000000 2px solid; WIDTH: 36.85%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">&#160;$35,685</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; BORDER-LEFT: #000000 2px solid; WIDTH: 26.31%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">4.67%</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: medium none; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; WIDTH: 36.84%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Total</div>
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<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: medium none; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; WIDTH: 36.85%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">$763,662</div>
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<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; WIDTH: 26.31%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">100.0%</div>
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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">
<table id="z36c27cb9b2994531ad50e3b4dd615db8" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; WIDTH: 21.25pt; align: right">(1)</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Audit fees are fees for audit services and include fees associated with the annual audit, services provided in connection with the audit of our internal control over financial reporting and audit services provided in connection with other statutory or regulatory filings.</div>
</td>
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<div style="LINE-HEIGHT: 1.25"><br style="LINE-HEIGHT: 1.25">
</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">
<table id="z5484a390afac4b9cb1285b2020020bdd" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 49.65pt"></td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; WIDTH: 21.25pt; align: right">(2)</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Tax fees are fees for professional services rendered by our auditors for tax compliance, tax planning and tax advice on actual or contemplated transactions.</div>
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<div style="LINE-HEIGHT: 1.25"><br style="LINE-HEIGHT: 1.25">
</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">
<table id="zc8143e163f904f99a7f3dd2512edb6ce" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; WIDTH: 22.35pt; align: right">(3)</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Other fees are fees for professional services other than audit or tax related fees, rendered in connection with our business activities; such fees in 2016 were mainly related to the rights offering concluded by the Company in March 2016.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">In accordance with the Company's procedures, our Audit Committee has approved all audit and non-audit services provided to the Company and to its subsidiaries during 2016.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">It is therefore proposed that at the Meeting the following resolution be adopted:</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; MARGIN-LEFT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 45.35pt">"RESOLVED, that the appointment of Kost Forer Gabbay &amp; Kasierer, a member of Ernst &amp; Young Global, as the Company's independent public accountants <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">for the fiscal year ending December 31, 2017 and for such additional period until the next annual general meeting of shareholders,</font> be, and it hereby is, ratified, and the Board of Directors (or, the Audit Committee, if authorized by the Board of Directors (subject to the ratification of the Board of Directors)) be, and it hereby is, authorized to fix the remuneration of such independent public accountants in accordance with the volume and nature of their services."</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt">The affirmative vote of the holders of a majority of the ordinary shares represented at the Meeting, in person or by proxy, entitled to vote and voting on the matter, is required to approve the foregoing resolution.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">The</font>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Board of Directors recommends a vote FOR the ratification and approval of reappointment and compensation of independent registered public accountants.</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center; MARGIN-LEFT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt; TEXT-INDENT: -36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">CONSIDERATION OF THE AUDITOR'S REPORT AND</font>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">THE CONSOLIDATED </font></div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-LEFT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt; TEXT-INDENT: -36pt">FINANCIAL STATEMENTS</div>

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</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">At the Meeting, the consolidated financial statements for the year ended December 31, 2016 </font>and the Auditor's Report in respect thereto <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">will be presented and considered.&#160; This item will not involve a vote of the shareholders.</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Our 2016 Consolidated Financial Statements are published as part of our Annual Report </font>on Form 20-F for the year ended December 31, 2016, <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">and </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">can be viewed on our website at </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><u>www.gilat.com</u></font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> and on the SEC website at</font>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><u>www.sec.gov</u></font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">. A shareholder interested in receiving a copy free of charge may contact the Company's corporate secretary for such purpose. None of the auditor's report, consolidated financial statements, the Form 20-F or the contents of our website form part of the proxy solicitation material.</font></div>

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<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: normal; FONT-STYLE: normal">13</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">ADDITIONAL INFORMATION</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; MARGIN-LEFT: 1.1pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 39.6pt">The following table sets forth certain information regarding the beneficial ownership of our ordinary shares, as of April 30, 2017, by:</div>

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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">
<table id="z25df2837b1b140faba3a7061b81176f4" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; VERTICAL-ALIGN: top; WIDTH: 12.2pt; align: right">&#183;</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">each person who we believe beneficially owns 5% or more of our outstanding ordinary shares, and</div>
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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">
<table id="zea1b029d4eb044f48100914a0f3c0d51" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; VERTICAL-ALIGN: top; WIDTH: 12.2pt; align: right">&#183;</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">all of our directors and executive officers as a group.</div>
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</div>

<div style="LINE-HEIGHT: 1.25">&#160;</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; MARGIN-LEFT: 1.1pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 39.6pt">Beneficial ownership of shares is determined under rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power.&#160;The percentage ownership of each such person is based on the number of ordinary Shares outstanding as of April 30, 2017 and includes the number of ordinary shares underlying options and RSUs that are exercisable within sixty (60) days from the date of April 30, 2017.&#160;&#160;Ordinary Shares subject to these options and RSUs are deemed to be outstanding for the purpose of computing the ownership percentage of the person holding these options and RSUs, but are not deemed to be outstanding for the purpose of computing the ownership percentage of any other person. The information in the table below is based on 54,661,667 Ordinary Shares outstanding as of April 30, 2017.&#160; Each of our outstanding ordinary shares has identical rights in all respects. The information in the table below with respect to the beneficial ownership of shareholders is based on the public filings of such shareholders with the SEC through April 30, 2017 and information provided to us by such shareholders.</div>

<table id="zd4d3bcd76b9749babf126c4831f5847c" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 94%" cellspacing="0" cellpadding="0" align="right" border="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom">
<div style="LINE-HEIGHT: 1.25">
<div style="LINE-HEIGHT: 1.25">&#160;</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Name</div>
</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Number of Shares</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 1.25">Percent</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 76%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; LINE-HEIGHT: 1.25">FIMI Funds (1).<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 1px; DISPLAY: inline-block; WIDTH: 12pt">&#160;</font></div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 9%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; LINE-HEIGHT: 1.25">18,901,865</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 9%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; LINE-HEIGHT: 1.25">34.5</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; LINE-HEIGHT: 1.25">%</div>
</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 76%; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; LINE-HEIGHT: 1.25">Itshak Sharon (Tshuva) (2)<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 1px; DISPLAY: inline-block; WIDTH: 12pt">&#160;</font></div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 9%; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; LINE-HEIGHT: 1.25">5,692,251</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 9%; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; LINE-HEIGHT: 1.25">10.4</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; LINE-HEIGHT: 1.25">%</div>
</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 76%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; LINE-HEIGHT: 1.25">Mivtah Shamir Holdings Ltd. (3)<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 1px; DISPLAY: inline-block; WIDTH: 12pt">&#160;</font></div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 9%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; LINE-HEIGHT: 1.25">5,375,647</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 9%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; LINE-HEIGHT: 1.25">9.8</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; LINE-HEIGHT: 1.25">%</div>
</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 76%; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; LINE-HEIGHT: 1.25">Meitav Dash Investments Ltd. (4)<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 1px; DISPLAY: inline-block; WIDTH: 12pt">&#160;</font></div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 9%; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; LINE-HEIGHT: 1.25">2,955,273</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 9%; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; LINE-HEIGHT: 1.25">5.4</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; LINE-HEIGHT: 1.25">%</div>
</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 76%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; LINE-HEIGHT: 1.25">All directors and executive officers as a group (15 persons) (5)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 9%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; LINE-HEIGHT: 1.25">1,794,252</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 9%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; LINE-HEIGHT: 1.25">3.2</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; LINE-HEIGHT: 1.25">%</div>
</td>
</tr>
</table>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; MARGIN-LEFT: 56.7pt; CLEAR: both; LINE-HEIGHT: 1.25; TEXT-INDENT: -21.25pt">____________________________________________________</div>

<div style="LINE-HEIGHT: 1.25"><br style="LINE-HEIGHT: 1.25">
</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">
<table id="zeb1863156f524fc480db0b57fd9db483" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 35.45pt"></td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; WIDTH: 18pt; align: right">(1)</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Based on a Schedule 13D/A filed on&#160;April 7, 2016 with the SEC and information provided to the Company, FIMI Opportunity IV, L.P., FIMI Israel Opportunity IV, Limited Partnership (the "FIMI IV Funds"), FIMI Opportunity V, L.P., FIMI Israel Opportunity Five, Limited Partnership (the "FIMI V Funds" and together with the FIMI IV Funds, the "FIMI Funds"), FIMI IV 2007 Ltd., FIMI FIVE 2012 Ltd., Shira and Ishay Davidi Management Ltd. and Mr. Ishay Davidi share voting and dispositive power with respect to the 18,801,865 shares held by the FIMI Funds. FIMI IV 2007 Ltd. is the managing general partner of the FIMI IV Funds.&#160;&#160;FIMI FIVE 2012 Ltd. is the managing general partner of the FIMI V Funds. Shira and Ishay Davidi Management Ltd. controls FIMI IV 2007 Ltd. and FIMI FIVE 2012 Ltd. Mr. Ishay Davidi controls Shira and Ishay Davidi Management Ltd. and is the Chief Executive Officer of all the entities listed above. These holdings include options to purchase 100,000 ordinary shares held by FIMI IV 2007 Ltd., which are currently exercisable or are exercisable within 60 days of the date hereof granted to it by our company in connection with the service of its executives, Ishay Davidi and Amiram Boehm, as members of our Board. The principal business address of each of the above entities and of Mr. Davidi is c/o FIMI IV 2007 Ltd., Electra Tower, 98 Yigal Alon St., Tel-Aviv 6789141, Israel.</div>
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<div style="LINE-HEIGHT: 1.25">&#160;</div>

<div id="DSPFPageBreakArea" style="MARGIN-BOTTOM: 10pt; CLEAR: both; MARGIN-TOP: 10pt">
<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: normal; FONT-STYLE: normal">14</font></div>

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</div>
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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">
<table id="z0ec373eecbf24af9a0455eb331533f19" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 35.45pt"></td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; WIDTH: 18pt; align: right">(2)</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Based on information provided to our company as of March 31, 2017 and on a Schedule 13G/A filed on April 7, 2016 with the SEC by Itshak Sharon (Tshuva), Delek Group Ltd. and The Phoenix Holding Ltd and other information provided to us by such shareholders. The ordinary shares are beneficially owned by various direct or indirect, majority or wholly-owned subsidiaries of the Phoenix Holding Ltd. (the "Subsidiaries"). The Subsidiaries manage their own funds and/or the funds of others, including for holders of exchange-traded notes or various insurance policies, members of pension or provident funds, unit holders of mutual funds, and portfolio management clients.&#160;Each of the Subsidiaries operates under independent management and makes its own independent voting and investment decisions. Itshak Sharon (Tshuva) holds 5,692,251 ordinary shares as follows: (i) 77,796 ordinary shares are held by Excellence trust funds; (ii)&#160;532,811&#160; ordinary shares are held by certain Excellence ETF's, and (iii) 641,162 ordinary shares are held by The Phoenix "nostro" accounts (iv) 4,329,343 ordinary shares are held by certain partnership that invests in Israeli securities&#160;(v)&#160; 111,139 ordinary shares are held by a certain partnership that invests in shares of companies listed in&#160; the Tel Aviv 100 index. The Phoenix Holding Ltd. is a majority-owned subsidiary of Delek Group Ltd.&#160;&#160;The majority of Delek Group Ltd.'s outstanding share capital and voting rights are owned, directly and indirectly, by Itshak Sharon (Tshuva) through private companies wholly-owned by him, and the remainder is held by the public. The principal business address of Itshak Sharon (Tshuva) and Delek Investments and Properties Ltd. is 7 Giborei Israel Street, P.O.B. 8464, Netanya, 4250407, Israel. The principal business address of the Phoenix Holding Ltd. is Derech Hashalom 53, Givataim, 5345433, Israel.</div>
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<div style="LINE-HEIGHT: 1.25">&#160;</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">
<table id="zfbc5d92d80164bbb8134891370080d0d" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 35.45pt"></td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; WIDTH: 18pt; align: right">(3)</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Based on a Schedule 13G/A filed on April 7, 2016 by Mivtah Shamir Holdings Ltd. and information provided to us by such shareholder. The principal office of Mivtah Shamir Holdings Ltd. is 27 Habarzel Street, Tel-Aviv.</div>
</td>
</tr>
</table>
</div>

<div style="LINE-HEIGHT: 1.25">&#160;</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">
<table id="zc7292fc9c67f4bcc9a4fb2922d5cbbf7" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 35.45pt"></td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; WIDTH: 18pt; align: right">(4)</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Based on information provided to our company as of March 31, 2017 and on a Schedule 13G/A filed on January 10, 2017, Meitav Dash Investments Ltd. ("Meitav") is controlled by: (1) BRM Group Ltd. ("BRM Group") which holds Meitav's shares through BRM Finance Ltd., a wholly owned subsidiary of&#160;&#160;BRM Group. The shareholders of BRM Group are Messrs. Eli&#160;Barkat, Nir Barkat (Messrs. Eli&#160;Barkat and Nir Barkat are brothers) and Yuval Rakavy, each holds 33.3% through his controlled companies; and (2) Mr. Zvi Stepak who holds Meitav's shares through Maya Holdings (Ye'elim) Ltd. ("Maya holdings") a company which he controls and Nili (Amir) Holdings&#160;Ltd. (a wholly owned subsidiary of Maya Holdings). Meitav holds <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">2,955,273 </font>ordinary shares as follows: (i) <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">535,800 </font>ordinary shares are held by Mutual Funds of Meitav Dash Investments LTD group; (ii) <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">1,811,584 </font>ordinary shares are held by Provident Funds of Meitav Dash Investments LTD group; (iii)&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">545,504 </font>ordinary shares are held by ETFs of Meitav Dash Investments LTD group, and (iv) <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">62,385 </font>ordinary shares are held by the Portfolio Management of Meitav Dash Investments LTD group. The principal business address of Meitav is 30 Derekh Sheshet Ha-yamim, Bene-Beraq, Israel.</div>
</td>
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<div style="LINE-HEIGHT: 1.25">&#160;</div>

<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">
<table id="z0eef54b67d5c4b3dab21f4cbd643b70e" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; WIDTH: 18pt; align: right">(5)</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">As of April 30, 2017 all directors and executive officers as a group (15 persons) held 723,248 options that are vested or that vest within 60 days of April 30, 2017.</div>
</td>
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<div style="LINE-HEIGHT: 1.25">&#160;</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25">Compensation of Executive Officers</div>

<div style="LINE-HEIGHT: 1.25"><br style="LINE-HEIGHT: 1.25">
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">The annual compensation earned during 2016 by our five most highly-compensated executive officers is outlined in Item 6.B. of our Annual Report on Form 20-F for the year ended December 31, 2016, as filed with the Securities and Exchange Commission</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">, which can be viewed on our website at </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><u>www.gilat.com</u></font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> and on the SEC website at</font>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><u>www.sec.gov</u></font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><u>.</u></font></div>

<div style="LINE-HEIGHT: 1.25"><br style="LINE-HEIGHT: 1.25">
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt">Shareholder Communications with the Board of Directors</div>

<div style="LINE-HEIGHT: 1.25"><br style="LINE-HEIGHT: 1.25">
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.2pt; TEXT-INDENT: 36pt">Our shareholders may communicate with the members of our Board of Directors by writing directly to the Board of Directors or to specified individual Directors to the attention of:</div>

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</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt; TEXT-INDENT: 72pt">Yael Shofar, Corporate Secretary</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt; TEXT-INDENT: 72pt">Gilat Satellite Networks Ltd.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt; TEXT-INDENT: 72pt">21 Yegia Kapayim Street</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt; TEXT-INDENT: 72pt">Kiryat Arye</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt; TEXT-INDENT: 72pt">Petah Tikva 49130 Israel</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt; TEXT-INDENT: 72pt">Email: <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><u>yaelsh@gilat.com</u></font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.2pt; TEXT-INDENT: 36pt">Our Corporate Secretary will deliver any shareholder communications to the specified individual Director, if so addressed, or otherwise to one of our Directors who can address the matter.</div>

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