ITURAN LOCATION AND CONTROL LTD. PROXY STATEMENT FOR EXTRAORDINAY MEETING OF SHAREHOLDERS INFORMATION CONCERNING SOLICITATION AND VOTING

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1 ITURAN LOCATION AND CONTROL LTD. PROXY STATEMENT FOR EXTRAORDINAY MEETING OF SHAREHOLDERS December 24, 2013 The enclosed proxy/written ballot is solicited on behalf of the Board of Directors of Ituran Location and Control Ltd. (the Company ) for use at the Company s Extraordinary General Meeting of Shareholders (the Meeting ) to be held on January 28, 2014 at 14:00 p.m., local time, or at any adjournment or postponement thereof, for the purposes set forth herein and in the accompanying Notice. The Meeting will be held at the offices of the Company located at 3 Hashikma Street, Azour, Israel. The telephone number at that address is INFORMATION CONCERNING SOLICITATION AND VOTING Record Date and Shares Outstanding Only shareholders of record of the Company's ordinary shares, nominal value NIS /3 (the Ordinary Shares ), at the close of business on December 30, 2013 (the Record Date ), are entitled to vote at the Meeting. The term "shareholders of record" includes holders of Ordinary Shares through a bank, broker or other nominee which is a shareholder of record of the Company at the close of business on the Record Date or which appeared in the participant listing of a securities depository on that date. Revocability of Proxies/Written Ballots Forms of proxy card and written ballot (in Israel) for use at the Meeting are attached. Please follow the instructions on the proxy card or written ballot (as the case may be). You may change your mind and cancel your proxy card/written ballot by filing a written notice of revocation with the Company, by completing and returning a duly executed proxy card bearing a later date (with respect to cancellation of proxy cards only), or by voting in person at the Meeting. Attendance at the Meeting will not in and of itself constitute revocation of a proxy/written ballot. Ordinary Shares represented by a valid proxy card/written ballot in the from attached, which indicates whether or not the holder is a controlling shareholder and/or has a personal interest in the proposed resolution to be presented at the Meeting, will be voted in favor of the proposed resolution, unless you clearly indicate a vote against such resolution. Quorum, Voting and Solicitation At least two shareholders who attend the Meeting in person, by written ballot or by proxy will constitute a quorum at the Meeting, provided that they hold Ordinary Shares conferring in the aggregate more than one third of the voting power of the Company. If a quorum is not present within one hour from the time scheduled for the Meeting, the Meeting will be adjourned to the same day in the next week, at the same time and place. At such adjourned meeting any number of shareholders present in person, by written ballot or by proxy shall constitute a quorum. The vote necessary to approve the resolution relating to the matter upon which you will be asked to vote is specified below. Each outstanding Ordinary Share is entitled to one vote upon the matters presented at the Meeting. Shareholders registered in the Company s shareholders registry in Israel and shareholders who hold shares through members of the Tel-Aviv Stock Exchange who vote their shares by proxy/written ballot must also provide the Company with a copy of their identity card, passport or certificate of incorporation, as the case may be. Shareholders who hold shares through members of the Tel-Aviv

2 Stock Exchange and intend to vote their shares either in person, by written ballot or by proxy must deliver to the Company an ownership certificate, confirming their ownership of shares of the Company on the record date, which certificate must be approved by a recognized financial institution, as required by the Israeli Companies Regulations (Proof of Ownership of Shares for Voting at General Meetings), 2000, as amended. The Board of Directors of the Company is soliciting the attached proxy cards for the Meeting, primarily by mail. The original solicitation of proxies by mail may be further supplemented by solicitation by telephone and other means by certain officers, directors, employees and agents of the Company, but they will not receive additional compensation for these services. Under Israeli law, if a quorum is present in person or by proxy, broker non-votes and abstentions will have no effect on whether the requisite vote is obtained, as they do not constitute present and voting shares. Shareholders are entitled to apply in writing, through the Company, to the other shareholders of the Company in order to present their position in respect of any item on the agenda of the Meeting ( Position Notice ). Position Notices may be sent to the Company s registered office at the address specified above, by no later than January 9, General Background THE MATTERS ON THE AGENDA On October 31, 2013, the Company's general meeting of shareholders adopted a policy, which sets forth the principles of our office holders' compensation (the "Compensation Policy"). The Compensation Policy applies to office holders of the Company (as defined under the Israeli Companies Law, 1999 (the "Companies Law")), who serve as the Company's President, Chief Executive Officer(s) ("CEO(s)") and other executives who are deemed office holders of the Company, as well as office holders of the Company's Israeli wholly owned subsidiaries, provided they report to the CEO ("Business Unit Managers"). The Compensation Policy also applies to the Company's directors, including with respect to other, non-directorship, services that they provide to the Company. Therefore, following the approval of the Company's compensation committee and board of directors, the Company is proposing to revise the terms of service of the Company's President, Co-CEOs and Business Unit Manager, such that they shall conform to the principles of the Compensation Policy. In addition, pursuant to the Companies Law, the terms of service or engagement of the Company's controlling shareholders and/or their relatives should be approved at least once every three years by the Company's compensation committee, board of directors and shareholders (by a special majority). For this purpose, a "controlling shareholder" is a shareholder who holds twenty-five percent or more of the Company's voting rights if there is no other person who holds more than fifty percent of the Company's voting rights; and two or more persons who each have a personal interest in the approval of a transaction shall be considered to be joint holders. Accordingly, the Company's controlling shareholder is Moked Ituran Ltd., which holds 26.93% of the Company's voting rights; and by virtue of a shareholders agreement among the shareholders of Moked Ituran Ltd., such shareholders may all be deemed controlling shareholders of the Company. Consequently, Mr. Izzy Sheratzky is deemed a controlling shareholder of the Company, and Messrs. Yehuda Kahane and Avner Kurz may be deemed controlling shareholders of the Company, among others, For a description of Moked Ituran Ltd.'s shareholders and the shareholders agreement among them, please see Item 6B of our annual report for the year ended December 31, 2012, under the caption "Shareholders Agreement and Articles of Association of Moked Ituran". Therefore, this Meeting is asked to consider and approve the terms of service, which have been revised to conform to the principles of the Compensation Policy as noted above, of Mr. Izzy Sheratzky (the Company's President) and his sons - Messrs. Eyal Sheratzky and Nir Sheratzky (the Company's Co- CEOs), and Mr. Gil Sheratzky (the CEO of the Company's Israeli wholly owned subsidiary, E-Com Global Electronic Commerce Ltd.); and to consider and approve the terms of engagement of Mr. Yehuda Kahane and Mr. Avner Kurz.

3 Furthermore, this Meeting is asked to consider and approve the procurement of directors' and officers' insurance policies, the amendment of the Company's Articles of Association concerning insurance and indemnification of office holders and the amendment of the deeds of indemnity for office holders; all such matters being related to the terms of service of our office holders, including controlling shareholders and their relatives. PROPOSAL ONE APPROVAL OF THE TERMS OF SERVICE OF MR. IZZY SHERATZKY Background and Proposed Resolution Mr. Izzy Sheratzky is the President of the Company and has been leading the Company for over 18 years. Annex A of this proxy statement sets forth his proposed terms of service in accordance with the Company's Compensation Policy. It is proposed that the general meeting adopt the following resolution: to approve the terms of service of Mr. Izzy Sheratzky as set forth in Annex A hereof. Board Recommendation and Considerations The Company's board of directors recommends that the shareholders vote FOR the approval of the proposed resolution, after considering the following: Mr. Sheratzky has been leading the Company for over 18 years and possesses vast experience, knowledge and skills in the Company's field of operations; Mr. Sheratzky's services are indispensable and necessary for the Company, he has a good reputation among our customers and material business connections that are important to the Company; Mr. Sheratzky has immensely contributed to the Company and has led it to exceptional achievements for many years while maintaining its status as a leading corporation in its filed. The proposed terms of service of Mr. Sheratzky are compatible with his position at the Company, the scope of his services and their quality, and are reasonable and appropriate; Mr. Sheratzky's terms of services are also reasonable and appropriate as compared to the terms of service of office holders who serve at similar positions with peer companies (i.e. - other public companies with appropriate similarities to the Company), including after consideration of such peer companies' financial performance as compared to the Company's; Mr. Sheratzky's terms of service correspond to the principles of the Compensation Policy and as such reflect the Company's perception of the appropriate nature of the compensation's components and their balance, including the ratio between the fix and variable components and the ratio between the terms of service of office holders and the cost of employment of the other employees of the Company; as well as the appropriate manner by which the Company's office holders should be incentivized, under a short and long term view and while relating to the advancement of the Company's goals and the best interests of its shareholders. Vote Required The affirmative vote of the holders of a majority of the voting power represented at the Meeting in person, by written ballot or by proxy and voting thereon is necessary for the approval of this proposed resolution; provided that: (a) a majority of the shares voted at the meeting, which are not held by shareholders with personal interest in approving the proposal, vote in favor of the proposed resolution (abstentions are not counted); or (b) the total number of shares referred to in (a) above which voted against the proposed resolution, does not exceed two percent (2%) of the aggregate voting rights in the Company.

4 PROPOSAL TWO APPROVAL OF THE TERMS OF SERVICE OF MR. EYAL SHERATZKY Background and Proposed Resolution Mr. Eyal Sheratzky is the Co-CEO of the Company and has been serving as such for the last 10 years. Annex A of this proxy statement sets forth his proposed terms of service in accordance with the Company's Compensation Policy. It is proposed that the general meeting adopt the following resolution: to approve the terms of service of Mr. Eyal Sheratzky as set forth in Annex A hereof. Board Recommendation and Considerations The Company's board of directors recommends that the shareholders vote FOR the approval of the proposed resolution, after considering the following: Mr. Sheratzky has been serving the Company for approximately 18 years, and as a Co-CEO for 10 years; and possesses extensive experience, understanding and familiarity with the Company's entire aspects of operations; Mr. Sheratzky's has greatly contributed to the growth and impressive achievements of the Company; Mr. Sheratzky's services are indispensable and necessary for the Company, and the Company should act as much as possible to incentivize him to achieve the Company's goals; Mr. Sheratzky holds LLB and LLM degrees from the Tel Aviv University School of Law and an Executive MBA degree from the Kellogg School of Management at Northwestern University, USA. The proposed terms of service of Mr. Sheratzky are compatible with his position at the Company, the scope of his services and their quality, and are reasonable and appropriate; Mr. Sheratzky's terms of services are also reasonable and appropriate as compared to the terms of service of chief executive officers of peer companies (i.e. - other public companies with appropriate similarities to the Company), including after consideration of such peer companies' financial performance as compared to the Company's; Mr. Sheratzky's terms of service correspond to the principles of the Compensation Policy and as such reflect the Company's perception of the appropriate nature of the compensation's components and their balance, including the ratio between the fix and variable components and the ratio between the terms of service of office holders and the cost of employment of the other employees of the Company; as well as the appropriate manner by which the Company's office holders should be incentivized, under a short and long term view and while relating to the advancement of the Company's goals and the best interests of its shareholders. Vote Required The affirmative vote of the holders of a majority of the voting power represented at the Meeting in person, by written ballot or by proxy and voting thereon is necessary for the approval of this proposed resolution; provided that: (a) a majority of the shares voted at the meeting, which are not held by shareholders with personal interest in approving the proposal, vote in favor of the proposed resolution (abstentions are not counted); or (b) the total number of shares referred to in (a) above which voted against the proposed resolution, does not exceed two percent (2%) of the aggregate voting rights in the Company.

5 PROPOSAL THREE APPROVAL OF THE TERMS OF SERVICE OF MR. NIR SHERATZKY Background and Proposed Resolution Mr. Nir Sheratzky is the Co-CEO of the Company and has been serving as such for the last 10 years. Annex A of this proxy statement sets forth his proposed terms of service in accordance with the Company's Compensation Policy. It is proposed that the general meeting adopt the following resolution: to approve the terms of service of Mr. Nir Sheratzky as set forth in Annex A hereof. Board Recommendation and Considerations The Company's board of directors recommends that the shareholders vote FOR the approval of the proposed resolution, after considering the following: Mr. Sheratzky has been serving the Company for approximately 18 years, and as a Co-CEO for 10 years; and possesses extensive experience, understanding and familiarity with the Company's entire aspects of operations; Mr. Sheratzky's has greatly contributed to the growth and impressive achievements of the Company; Mr. Sheratzky's services are indispensable and necessary for the Company, and the Company should act as much as possible to incentivize him to achieve the Company's goals; Mr. Sheratzky holds BA and MA degrees in Economics from the Tel Aviv University. The proposed terms of service of Mr. Sheratzky are compatible with his position at the Company, the scope of his services and their quality, and are reasonable and appropriate; Mr. Sheratzky's terms of services are also reasonable and appropriate as compared to the terms of service of chief executive officers of peer companies (i.e. - other public companies with appropriate similarities to the Company), including after consideration of such peer companies' financial performance as compared to the Company's; Mr. Sheratzky's terms of service correspond to the principles of the Compensation Policy and as such reflect the Company's perception of the appropriate nature of the compensation's components and their balance, including the ratio between the fix and variable components and the ratio between the terms of service of office holders and the cost of employment of the other employees of the Company; as well as the appropriate manner by which the Company's office holders should be incentivized, under a short and long term view and while relating to the advancement of the Company's goals and the best interests of its shareholders. Vote Required The affirmative vote of the holders of a majority of the voting power represented at the Meeting in person, by written ballot or by proxy and voting thereon is necessary for the approval of this proposed resolution; provided that: (a) a majority of the shares voted at the meeting, which are not held by shareholders with personal interest in approving the proposal, vote in favor of the proposed resolution (abstentions are not counted); or (b) the total number of shares referred to in (a) above which voted against the proposed resolution, does not exceed two percent (2%) of the aggregate voting rights in the Company.

6 PROPOSAL FOUR APPROVAL OF THE TERMS OF SERVICE OF MR. GIL SHERATZKY Background and Proposed Resolution Mr. Gil Sheratzky is the chief executive officer of E-Com Global Electronic Commerce Ltd. ("E- Com"), an Israeli wholly owned subsidiary of the Company, which is responsible for the Company's on-demand navigation guidance services, and holds the Mapa group, a provider of geographic information (GIS) in Israel. Annex A of this proxy statement sets forth his proposed terms of service in accordance with the Company's Compensation Policy. It is proposed that the general meeting adopt the following resolution: to approve the terms of service of Mr. Gil Sheratzky as set forth in Annex A hereof. Board Recommendation and Considerations The Company's board of directors recommends that the shareholders vote FOR the approval of the proposed resolution, after considering the following: Mr. Sheratzky has been serving the Company for approximately 13 years in different positions, and as the CEO of E-Com for 6 years; Mr. Sheratzky has gained extensive experience and understanding of the Company's field of operations; and is managing E-Com with great professionalism and talent; Mr. Sheratzky is greatly contributing to the success of E-Com's operations and his services are required for the continued advancement and success of E-Com; Mr. Sheratzky holds a BA in Business Administration from the Herzliya Interdisciplinary Center, and an MBA degree from the Booth School of Business at Chicago University, USA. The proposed terms of service of Mr. Sheratzky are compatible with his position at the Company as a Business Unit Manager, the scope of his services and their quality, and are reasonable and appropriate; Mr. Sheratzky's terms of services are also reasonable and appropriate as compared to the terms of service of business unit managers of peer companies (i.e. - other public companies with appropriate similarities to the Company), including after consideration of such peer companies' financial performance as compared to the Company's; Mr. Sheratzky's terms of service correspond to the principles of the Compensation Policy and as such reflect the Company's perception of the appropriate nature of the compensation's components and their balance, including the ratio between the fix and variable components and the ratio between the terms of service of office holders and the cost of employment of the other employees of the Company; as well as the appropriate manner by which the Company's office holders should be incentivized, under a short and long term view and while relating to the advancement of the Company's goals and the best interests of its shareholders. Vote Required The affirmative vote of the holders of a majority of the voting power represented at the Meeting in person, by written ballot or by proxy and voting thereon is necessary for the approval of this proposed resolution; provided that: (a) a majority of the shares voted at the meeting, which are not held by shareholders with personal interest in approving the proposal, vote in favor of the proposed resolution (abstentions are not counted); or (b) the total number of shares referred to in (a) above which voted against the proposed resolution, does not exceed two percent (2%) of the aggregate voting rights in the Company.

7 PROPOSAL FIVE APPROVAL OF THE TERMS OF ENGAGEMENT OF MR. YEHUDA KAHANE Background and Proposed Resolution Professor Yehuda Kahane, who serves as a director of the Company, also provides consulting services to the Company in accordance with an agreement date March 28, 1998, as amended (see Exhibit to the Company's Registration Statement on Form F-1, as filed on September 1, 2005). Pursuant to the terms of this agreement: Prof. Kahane provides to the Company, as an independent contractor, the following services (at a scope of at least 15 hours per month): financial consulting, organization, training and execution of the Company's financial activities; consulting concerning investment through various financial instruments; rate protection, and management of the Company's investment portfolios. The term of the agreement automatically renews every two years; although each party may terminate it with a 180 days prior notice. In consideration for the services described above, the Company pays Prof. Kahane a monthly amount of NIS 15,000 (approximately USD 4,264), linked to the Israeli consumer price index as known on May 1, 2003, plus VAT, against the receipt of a tax invoice. It is proposed that the general meeting adopt the following resolution: to approve the terms of engagement of Mr. Yehuda Kahane as described in the proxy statement relating to the Meeting. Board Recommendation and Considerations The Company's board of directors recommends that the shareholders vote FOR the approval of the proposed resolution, after considering the following: Prof. Kahane is one of the Company's founders, active in both the academic and business fields, and possesses vast experience and knowledge concerning the Company's field of operations; Prof. Kahane has been providing consultation services to the Company for may years and in doing so, has greatly contributed to the Company's success; Considering the Company's experience in receiving Prof. Kahane's consultation services pursuant to the above referenced agreement, and his contribution to the Company, these services are required for the operations of the Company and its management, are for the best interests of the Company and will contribute to the advancement of its goals; Prof. Kahane is a Professor Emeritus at the Faculty of Management, Tel Aviv University and heads the Akirov Institute for Business and the Environment at Tel-Aviv University. Professor Kahane founded and served as the first Dean of the Israeli Academic School of Insurance until In addition, he was the co-founder and co-owner of the managing firm of the first balanced pension fund in Israel, Teshura, a co-owner of the technological incubators Weizman, Ofakim and Katzrin, and is involved in the formation, seed investment and management of start-up companies. Prof. Kahane serves as an actuarial consultant to various companies and organizations. Prof. Kahane is a director in Capital Point Ltd. and in a large number of private technological companies unrelated to us. He is the chairman of an association for the visually impaired of Hertzelia and Sharon District and a board member of the umbrella organization for the visually impaired in Israel. Prof. Kahane holds a BA degree in Economics and Statistics, an MA degree in Business Administration and a PhD in Finance from the Hebrew University of Jerusalem. The Compensation Policy allows the payment of consultation fees to directors who are not executive officers of the Company, to the extent that their services are requested in addition to their services as directors of the Company, in accordance with the scope of the services required and market terms of comparable services. The consideration for the consultation services provided by Prof. Kahane is fair and reasonable and is compatible with market terms of comparable services. Vote Required The affirmative vote of the holders of a majority of the voting power represented at the Meeting in person, by written ballot or by proxy and voting thereon is necessary for the approval of this proposed

8 resolution; provided that: (a) a majority of the shares voted at the meeting, which are not held by shareholders with personal interest in approving the proposal, vote in favor of the proposed resolution (abstentions are not counted); or (b) the total number of shares referred to in (a) above which voted against the proposed resolution, does not exceed two percent (2%) of the aggregate voting rights in the Company. PROPOSAL SIX APPROVAL OF THE TERMS OF ENGAGEMENT OF MR. AVNER KURZ Background and Proposed Resolution Mr. Avner Kurz, who serves as a director of the Company, also provides consulting services to Ituran Sistemas de Monitoramento Ltda, a Brazilian subsidiary of the Company who handles the Company's operations in Brazil, in accordance with an agreement dated February 23, 2012 (see our 6-K dated April 5, 2012). Pursuant to the terms of this agreement: Mr. Kurz provides consultation services to the Brazilian subsidiary, as an independent contractor, including services concerning: general strategy of the subsidiary, developing connections with the private market, infrastructure development and in any other area as is required from time to time. In addition, he is in direct contact with the chief executive officer of the subsidiary and its office holders, reports directly to the Company's president and advises him regarding the aforementioned. Mr. Kurz undertook to stay at least eight times per year in Brazil at the subsidiary's offices and to invest no less than twenty monthly hours in providing the services. The term of the agreement automatically renews every two years; although each party may terminate it with a 180 days prior notice. In consideration for the services described above, the Brazilian subsidiary pays Mr. Kurz a monthly amount of USD 8,000, against the receipt of a tax invoice; and Mr. Kurz is entitled to receive a cellular phone and reimbursement of related expenses from the Company, payable against receipts. It is proposed that the general meeting adopt the following resolution: to approve the terms of engagement of Mr. Avner Kurz as described in the proxy statement relating to the Meeting. Board Recommendation and Considerations The Company's board of directors recommends that the shareholders vote FOR the approval of the proposed resolution, after considering the following: Mr. Kurz is one of the Brazilian subsidiary's founders and has served as its chief executive officer and chairman of the board; and has therefore gained vast knowledge, experience and skills concerning the Brazilian market in general and the operations of the Brazilian subsidiary in particular, including the regulations applicable thereto; Considering the Brazilian subsidiary's experience in receiving Mr. Kurz' consultation services pursuant to the above referenced agreement, and his contribution to the Brazilian subsidiary and consequently, to the Company, these services are required for the operations of the Brazilian subsidiary and the Company's oversight thereon, are for the best interests of the Brazilian subsidiary and the Company, and will contribute to the advancement of their goals; Mr. Kurz is the chairman of the board of directors and a director of F.K. Generators & Equipment Ltd. He also serves as a director of El-Ram, Moked Ituran, Totam Plus, Expandis and several other private companies abroad. The Compensation Policy allows the payment of consultation fees to directors who are not executive officers of the Company, to the extent that their services are requested in addition to their services as directors of the Company, in accordance with the scope of the services required and market terms of comparable services. The consideration for the consultation services provided by Mr. Kurz is fair and reasonable and is compatible with market terms of comparable services.

9 Vote Required The affirmative vote of the holders of a majority of the voting power represented at the Meeting in person, by written ballot or by proxy and voting thereon is necessary for the approval of this proposed resolution; provided that: (a) a majority of the shares voted at the meeting, which are not held by shareholders with personal interest in approving the proposal, vote in favor of the proposed resolution (abstentions are not counted); or (b) the total number of shares referred to in (a) above which voted against the proposed resolution, does not exceed two percent (2%) of the aggregate voting rights in the Company. PROPOSAL SEVEN APPROVAL OF THE PROCUREMENT FROM TIME TO TIME OF D&O INSURANCE POLICIES Background and Proposed Resolution Following the approval of the Company's compensation committee and board of directors, the Company's shareholders are being asked to approve the procurement from time to time of directors' and officers' insurance policies covering the liability of office holders, including controlling persons and their relatives, who serve at the Company and its subsidiaries from time to time (the "D&O Insurance Policies"), under the following terms: (a) the principal terms of the D&O Insurance Policies shall not materially deviate from the terms of the Company's current directors' and officers' insurance policy (the "Current Policy") as set forth in Annex B hereof; or (b) to the extent that the Company shall desire to procure a D&O Insurance Policy, which a material term thereof adversely deviates ( from the Company's point of view) from the terms of the Current Policy, the Company's board of the directors shall confirm that, notwithstanding such deviation, the Company's procurement of such policy is compatible with market terms and does not materially affect the Company's profitability, assets or liabilities. It is proposed that the general meeting adopt the following resolution: to approve the procurement from time to time of directors' and officer's insurance policies covering the liability of office holders, including controlling persons and their relatives, who serve at the Company and its subsidiaries from time to time, under the terms set forth in the proxy statement relating to the Meeting. Board Recommendation and Considerations The Company's board of directors recommends that the shareholders vote FOR the approval of the proposed resolution, after considering the following: The procurement of the D&O Policies is compatible with the principles of the Compensation Policy; Insurance of directors and officers is reasonable, fair and customary by companies of the kind and size of the Company; Procuring D&O Insurance Policies is for the best interests of the Company as it allows the office holders of the Company to fulfill their duties and make required decisions after considering the risks involved in the Company's operations and their responsibility as office holders under law; The Company's procurement of D&O Insurance Policies under the terms set forth above is compatible with market terms and does not materially affect the Company's profitability, assets or liabilities. Vote Required The affirmative vote of the holders of a majority of the voting power represented at the Meeting in person, by written ballot or by proxy and voting thereon is necessary for the approval of this proposed resolution; provided that: (a) a majority of the shares voted at the meeting, which are not held by shareholders with personal interest in approving the proposal, vote in favor of the proposed resolution (abstentions are not counted); or (b) the total number of shares referred to in (a) above which voted

10 against the proposed resolution, does not exceed two percent (2%) of the aggregate voting rights in the Company. PROPOSAL EIGHT APPROVAL OF AMENDMENTS TO THE COMPANY'S ARTICLES OF ASSOCIATION Background In 2011, the Israeli Securities Law, 1968 and the Companies Law, among others, were amended to authorize the Israeli Securities Authority to impose administrative sanctions against public reporting companies and their office holders for certain violations of the Israeli Securities Law or the Companies Law. These amendments prohibit the insurance and indemnification of office holders with respect to administrative sanction. However, provided a company sets forth appropriate provisions in its articles of association, insurance and indemnification are allowed with respect to expenses incurred in the administrative proceedings and with respect to payments charged to injured parties. The proposed amendments to the Company's Articles of Association as set forth in Annex C hereof are meant to allow for insurance and indemnification of officer holders of the Company to the fullest extent allowed by the law. The Proposed Resolution It is therefore proposed that the general meeting adopt the following resolution: to approve the amendments to the Company's Articles of Association as set forth in Annex C hereof. Vote Required The affirmative vote of the holders of a majority of the voting power represented at the Meeting in person, by written ballot or by proxy and voting thereon is necessary for the approval of this proposed resolution; provided that: (a) a majority of the shares voted at the meeting, which are not held by shareholders with personal interest in approving the proposal, vote in favor of the proposed resolution (abstentions are not counted); or (b) the total number of shares referred to in (a) above which voted against the proposed resolution, does not exceed two percent (2%) of the aggregate voting rights in the Company. Board Recommendation The Board of Directors recommends that the shareholders vote FOR the approval of the proposed resolution. PROPOSAL NINE APPROVAL OF AMENDMENTS TO OFFICE HOLDERS' DEEDS OF INDEMNITY; AND THE GRANT THEREOF Background and Proposed Resolution Subject to the approval of, and in accordance with, the amendments to the Company's Articles of Association, as provided in proposal eight above, it is proposed that the general meeting adopt the following resolution: to approve the amendments to office holders' deeds of indemnity as set forth in Annex D hereof; and the grant thereof to office holders, including controlling persons and their relatives, who serve at the Company and its subsidiaries from time to time. Vote Required The affirmative vote of the holders of a majority of the voting power represented at the Meeting in person, by written ballot or by proxy and voting thereon is necessary for the approval of this proposed resolution; provided that: (a) a majority of the shares voted at the meeting, which are not held by shareholders with personal interest in approving the proposal, vote in favor of the proposed resolution (abstentions are not counted); or (b) the total number of shares referred to in (a) above which voted

11 against the proposed resolution, does not exceed two percent (2%) of the aggregate voting rights in the Company. Board Recommendation The Board of Directors recommends that the shareholders vote FOR the approval of the proposed resolution. Sincerely yours, Ituran Location and Control Ltd.

12 ANNEX A TERMS OF SERVICE Mr. Izzy Sheratzky: 1. Services: Company's President. His services include ongoing consulting and guidance to the Co- CEOs; responsibility for the operations of the Company's subsidiaries abroad; maintaining ongoing and appropriate working relations with the Company's board of directors, its subordinates and any other person that Mr. Sheratzky is required to contact in connection with his position; providing on-going operations' reports to the Company's board of directors and any other information required of him, and assisting, to the extent required, to the Co-CEOs in consulting and managing board meetings; creating, advancing and maintaining relationships with major customers of the Company; locating and examining potential investments; cultivating team spirit and excellent service values within the Company's employees and his subordinates; presenting the Company's board of directors with initiatives and proposals to enhance the Company's efficiency; and performing any assignment requested of him by the Company's board of directors. Mr. Sheratzky shall provide the above services to the Company as an independent contractor or as an employee, at his sole discretion, pursuant to a service/employment agreement (the "Agreement"), provided that the nature of the Agreement shall not affect the total cost to the Company of his services as set forth below. 2. Fixed Monthly Pay and Benefits: assuming Mr. Sheratzky provides the services as an employee, he shall be entitled to a gross monthly salary of NIS 000,111 (approx. USD 47,011), linked to the consumer price index known on the date of the Meeting; and to customary social and other benefits (which shall not deviate from the provisions of the Company's Compensation Policy in this respect), estimated to amount to a cost to the Company equal to 35% of the above gross monthly salary; all provided that the total annual cost to the Company of Mr. Sheratzky's gross monthly salary and benefits shall not exceed the maximum amount set forth in Section 5 of the Company's Compensation Policy with respect to the President. 3. Expenses: Payment or reimbursement of expenses, including hosting expenses, subsistence allowance abroad and participation in work-related home telephone expenses 4. Target-based Cash Incentives: Mr. Sheratzky shall be entitled to Target-based Cash Incentives as detailed below 5. Excess Return Cash Incentives: Mr. Sheratzky shall be entitled to Excess Return Cash Incentives as detailed below 6. Term and Termination: the Agreement shall be in force for a period of 3 years from the date of this Meeting, and may be terminated upon 180 days' advance notice of termination; however, the Company may terminate the Agreement without an advance notice and without compensation if the following shall occur: 6.1. Mr. Sheratzky is convicted of a criminal offense involving moral turpitude; 6.2. A final court ruling (without the possibility of appeal) determines that Mr. Sheratzky has breached his fiduciary duty towards the Company; 6.3. A final court ruling (without the possibility of appeal) determines that Mr. Sheratzky has materially breached the Agreement through the unauthorized disclosure of Company's secrets or competition with the Company. 7. Non-Compete Period After Termination: 12 months Mr. Eyal Sheratzky: 1. Services: Company's Co-CEO. His services include responsibility for the Company's operations abroad, including oversight of the operations of the Company's subsidiaries' abroad, raising capital abroad, analysis of new markets and the possible value of launching new products abroad; creating, advancing and maintaining relationships with shareholders; examining and conducting

13 negotiations for cooperation and acquisition of companies and/or activity abroad that will facilitate expansion of the Company's operations; providing on-going activity reports to the Company's board of directors and any other information requested of him; and other services as shall be requested of him from time to time by the Company's board of directors. Mr. Sheratzky shall provide the above services to the Company as an independent contractor or as an employee, at his sole discretion, pursuant to a service/employment agreement (the "Agreement"), provided that the nature of the Agreement shall not affect the total cost to the Company of his services as set forth below. 2. Fixed Monthly Pay and Benefits: assuming Mr. Sheratzky provides the services as an employee, he shall be entitled to a gross monthly salary of NIS 001,111 (approx. USD 00,011), linked to the consumer price index known on the date of the Meeting; and to customary social and other benefits (which shall not deviate from the provisions of the Company's Compensation Policy in this respect), estimated to amount to a cost to the Company equal to 35% of the above gross monthly salary; all provided that the total annual cost to the Company of Mr. Sheratzky's gross monthly salary and benefits shall not exceed the maximum amount set forth in Section 5 of the Company's Compensation Policy with respect to the CEO. 3. Expenses: Payment or reimbursement of expenses, including hosting expenses, subsistence allowance abroad. 4. Target-based Cash Incentives: Mr. Sheratzky shall be entitled to Target-based Cash Incentives as detailed below 5. Excess Return Cash Incentives: Mr. Sheratzky shall be entitled to Excess Return Cash Incentives as detailed below 6. Term and Termination: the Agreement shall be in force for a period of 3 years from the date of this Meeting, and may be terminated upon 180 days' advance notice of termination; however, the Company may terminate the Agreement without an advance notice and without compensation if the following shall occur: 6.1. Mr. Sheratzky is convicted of a criminal offense involving moral turpitude; 6.2. A final court ruling (without the possibility of appeal) determines that Mr. Sheratzky has breached his fiduciary duty towards the Company; 6.3. A final court ruling (without the possibility of appeal) determines that Mr. Sheratzky has materially breached the Agreement through the unauthorized disclosure of Company's secrets or competition with the Company. 7. Non-Compete Period After Termination: 12 months Mr. Nir Sheratzky: 1. Services: Company's Co-CEO. His services include responsibility for the Company's operations in Israel, including oversight of the operations of the all the Company's subsidiaries in Israel, raising capital in Israel, analysis of new markets and the possible value of launching new products in Israel; creating, advancing and maintaining relationships with major customers, business and financial development in Israel; providing on-going activity reports to the Company's board of directors and any other information requested of him; and other services as shall be requested of him from time to time by the Company's board of directors. Mr. Sheratzky shall provide the above services to the Company as an independent contractor or as an employee, at his sole discretion, pursuant to a service/employment agreement (the "Agreement"), provided that the nature of the Agreement shall not affect the total cost to the Company of his services as set forth below. 2. Fixed Monthly Pay and Benefits: assuming Mr. Sheratzky provides the services as an employee, he shall be entitled to a gross monthly salary of NIS 001,111 (approx. USD 00,011), linked to the consumer price index known on the date of the Meeting; and to customary social and other

14 benefits (which shall not deviate from the provisions of the Company's Compensation Policy in this respect), estimated to amount to a cost to the Company equal to 35% of the above gross monthly salary; all provided that the total annual cost to the Company of Mr. Sheratzky's gross monthly salary and benefits shall not exceed the maximum amount set forth in Section 5 of the Company's Compensation Policy with respect to the CEO. 3. Expenses: Payment or reimbursement of expenses, including hosting expenses, subsistence allowance abroad. 4. Target-based Cash Incentives: Mr. Sheratzky shall be entitled to Target-based Cash Incentives as detailed below 5. Excess Return Cash Incentives: Mr. Sheratzky shall be entitled to Excess Return Cash Incentives as detailed below 6. Term and Termination: the Agreement shall be in force for a period of 3 years from the date of this Meeting, and may be terminated upon 180 days' advance notice of termination; however, the Company may terminate the Agreement without an advance notice and without compensation if the following shall occur: 6.1. Mr. Sheratzky is convicted of a criminal offense involving moral turpitude; 6.2. A final court ruling (without the possibility of appeal) determines that Mr. Sheratzky has breached his fiduciary duty towards the Company; 6.3. A final court ruling (without the possibility of appeal) determines that Mr. Sheratzky has materially breached the Agreement through the unauthorized disclosure of Company's secrets or competition with the Company. 7. Non-Compete Period After Termination: 12 months Mr. Gil Sheratzky: 1. Services: Chief Executive Officer of E-Com, subordinate to the Company's CEO and board of directors. His responsibilities include maintaining on-going and appropriate working relations with his subordinates and with any person that he needs to contact in connection with his position; providing all required information and assisting as much as required to the Company's personnel; cultivating team spirit and excellent service values within the Company's employees and his subordinates; quality management, including presentation to the Company's CEO of initiatives and proposals to enhance E-Com's efficiency; and the execution of any other assignment requested of him by the Company's management. Mr. Sheratzky shall provide the above services to E-Com as an independent contractor or as an employee, at his sole discretion, pursuant to a service/employment agreement (the "Agreement"), provided that the nature of the Agreement shall not affect the total cost to E-Com of his services as set forth below. 2. Fixed Monthly Pay and Benefits: assuming Mr. Sheratzky provides the services as an employee, he shall be entitled to a gross monthly salary of NIS 00,,11 (approx. USD26,011), linked to the consumer price index known on the date of the Meeting; and to customary social and other benefits (which shall not deviate from the provisions of the Company's Compensation Policy in this respect), estimated to amount to a cost to E-Com equal to 35% of the above gross monthly salary; all provided that the total annual cost to E-Com of Mr. Sheratzky's gross monthly salary and benefits shall not exceed the maximum amount set forth in Section 5 of the Company's Compensation Policy with respect to a Business Unit Manager. 3. Expenses: Payment or reimbursement of expenses, including hosting expenses, subsistence allowance abroad. 4. Target-based Cash Incentives: Mr. Sheratzky shall be entitled to Target-based Cash Incentives as detailed below.

15 5. Excess Return Cash Incentives: Mr. Sheratzky shall be entitled to Excess Return Cash Incentives as detailed below. 6. Term and Termination: the Agreement shall be in force for a period of 3 years from the date of this Meeting, and may be terminated upon two months' advance notice of termination; however, the Company may terminate the Agreement without an advance notice and without compensation if the following shall occur: 6.1. Mr. Sheratzky is convicted of a criminal offense involving moral turpitude; 6.2. A final court ruling (without the possibility of appeal) determines that Mr. Sheratzky has breached his fiduciary duty towards the Company; 6.3. A final court ruling (without the possibility of appeal) determines that Mr. Sheratzky has materially breached the Agreement through the unauthorized disclosure of Company's secrets or competition with the Company. 7. Non-Compete Period After Termination: 12 months Terms of Cash Incentives The terms below apply to each of Messrs. Izzy Sheratzky, Eyal Sheratzky, Nir Sheratzky and Gil Sheratzky (the "Executive Offices Holders"). 1. "Target-based Cash Incentives" means a cash incentive awarded to the Executive Office Holders for the Company's achievement of the following Profit-Before-Tax targets in each calendar year following the effective date of the Agreements, in which the Minimum Threshold (as defined below) has been achieved: Company's Profit-Before-Tax Targets (in USD thousands) Level of Incentive - As a Percentage of the Executive Office Holder's Annual Cost of Pay 24,001-27,500 20% 27,501-31,000 45% 31,001-35,000 75% 35,001-39, % Above 39, % "Minimum Threshold" means, with respect to a particular calendar year, a minimum Company's Return on Equity (as defined below) of 15%, and a minimum Company's Profit-Before-Tax of USD 24 million. "Return on Equity" means, with respect to a particular calendar year, the ratio between the net income for such year and the average of the shareholders' equity at the beginning of such calendar year and at the end of each calendar quarter of such year; calculated in accordance with the Company's audited or reviewed consolidated financial statements for such year, as the case may be, after taking into account Executive Officers' compensation, but excluding adjustments of the value of assets and obligations to their fair value in accordance with accounting standards. "Profit-Before-Tax" means, with respect to a particular calendar year, the Company's profit before tax for such year in accordance with the Company's audited consolidated financial statements for such year, after taking into account Executive Officers' compensation, but excluding adjustments of the value of assets and obligations to their fair value in accordance with accounting standards. "Executive Officers" means Office Holders of the Company ("Nosei Misra", as such term is defined in the Companies Law) who serve as the Company's President, Co-CEOs and other

16 executives who are deemed Office Holders of the Company, as well as Office Holders of the Company's Israeli wholly owned subsidiaries, provided they report to the CEO. "Cost of Pay" means, with respect to independent contractors their invoice amount plus company car and related expenses; and with respect to employees - their base pay (i.e. fixed gross amount payable to the employee in return for his services, excluding expenses, benefits and bonuses) plus 40% thereof. 2. Target-based Cash Incentives shall become payable upon the lapse of 30 days from the date of publication of the Company's audited annual financial statements (the "Entitlement Date"); and such cash incentive shall be paid on such date. However, if an Executive Office Holder's Targetbased Cash Incentives exceed an amount equal to 100% of such Executive Office Holder's annual Cost of Pay (the "100% Threshold"), then 20% of the amount by which the Target-based Cash Incentives exceed the 100% Threshold (the "Deferred Portion") shall not be paid on their Entitlement Date, but rather shall be deferred and paid in two equal installments on the first and second anniversary of the Entitlement Date, provided that the Minimum Threshold was achieved during the first calendar year (for the first installment) and during the second calendar year (for the second installment) following the Entitlement Date, respectively. The Deferred Portion shall be linked to the consumer price index known on the Entitlement Date. 3. The Company may pay to the Executive Office Holders advances on account of expected Targetbased Cash Incentives, based on the Company's reviewed financial statements, prior to the Entitlement Date; provided that if on the Entitlement Date, it turns out that such advances exceed the Target-based Cash Incentives to which the Executive Office Holders are entitled, then the excess amounts shall be returned to the Company or shall be deducted from the payment of the remainder Target-based Cash Incentives on the Entitlement Date, as the case may be. 4. "Excess Return Cash Incentives" means a cash grant based on the Company's Stock Yield as compared to the TA 100 Index's Yield, as set forth below. In the event that the Company shall delist from the Tel-Aviv Stock Exchange, then the Company's board of directors and compensation committee shall select a comparable NASDAQ index for the purpose of this Excess Return Cash Incentive and the provisions hereof shall apply with respect thereto mutatis mutandis. "Company's Stock Yield" means the percentage of increase or decrease of the Company s stock price on the Tel-Aviv Stock Exchange over an Examined Period (as defined below), as adjusted for dividend distribution, calculated based on the average adjusted closing price of the Company's shares on the Tel-Aviv Stock Exchange during the 5 business days prior to and the 5 business days after the commencement and end of such Examined Period. "TA 100 Index's Yield" means the percentage of increase or decrease of the TA 100 Index over an Examined Period, calculated based on the average TA 100 Index closing quotes during the 5 business days prior to and the 5 business days after the commencement and end of such Examined Period. At the end of each calendar year, the Company shall examine the Company's Stock Yield since January 1 of such year or, with respect to the first year of such grant since the date of its approval (an "Examined Period"), as compared to the TA 100 Index's Yield over such Examined Period; and to the extent that the Company's Stock Yield exceeds the TA 100 Index's Yield for such period, each of the Executive Office Holders shall receive an amount equal to 50% of his monthly Cost of Pay for each 1% of excess return (in percentage points' terms), or a relative amount in the event of a partial excess return. For the avoidance of doubt, in the event that the Company's Stock Yield during such period is negative, no grant shall be awarded. The Excess Return Cash Incentive for each year shall not exceed an amount equal to the Executive Officer Holder's annual Cost of Pay. 5. In the event that an Agreement is terminated during a calendar year, the Company's compensation committee and board of directors shall determine the relative amounts out of the Target-based Cash Incentives and/or Excess Return Cash Incentives to which the relevant Executive Office Holder is entitled for the portion of the year during which the Agreement was in force; and these amounts shall be paid within 30 days after the termination of service/employment, as the case may be. 6. On the date of determination of each Executive Office Holder's entitlement for a Target-based Cash Incentive for a particular year, the Company's compensation committee shall examine