TAT TECHNOLOGIES LTD

Background

At the Meeting, our shareholders will be asked to approve the adoption of our 2026 Employee Share Purchase Plan (the “ESPP”). The ESPP was adopted by our compensation committee and Board on July 15, 2026, and will become effective upon receiving shareholder approval at the Meeting.

The purpose of the ESPP is to enable eligible employees of the Company and certain of its designated subsidiaries to use payroll deductions to purchase the Company’s ordinary shares and thereby acquire an ownership interest in the Company. The ESPP will be comprised of two distinct components: (1) the component intended to qualify for favorable U.S. federal tax treatment under Section 423 of the Internal Revenue Code (the “Section 423 Component”), and (2) the component not intended to be tax qualified under Section 423 of the Internal Revenue Code, to facilitate participation for employees who are not eligible to benefit from favorable U.S. federal tax treatment and, to the extent applicable, to provide flexibility to comply with non-U.S. law and other considerations (the “Non-Section 423 Component”).

The maximum aggregate number of ordinary shares that may be purchased initially under the ESPP will be 125,000 ordinary shares (the “ESPP Share Pool”), subject to adjustment as provided for in the ESPP. In no event will more than 125,000 of our ordinary shares be available for issuance under the Section 423 Component.

The ESPP Share Pool represents 0.95% of our fully diluted share capital as of July 27, 2026. For information about options and restricted share units outstanding under our existing equity plans and the number of ordinary shares of the Company available for issuance under these plans, each as of December 31, 2025, please see our Annual Report.

The full text of the ESPP is set forth in Appendix C. The following description of certain features of the ESPP is qualified in its entirety by reference to the full text of the ESPP.