SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
F O R M 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of
July 2006
RADA ELECTRONIC INDUSTRIES LIMITED
(Name of Registrant)
7 Giborei Israel Street, Netanya 42504, Israel
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the
Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate by check mark if the registrant is submitting the
Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
Indicate by check mark whether by furnishing the information
contained in this Form, the registrant is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to
the registrant in connection with Rule 12g3-2(b): 82-___________
This Form 6-K is being incorporated by reference into the Registrant's
Form F-3 Registration Statements File Nos. 333-12074, 333-115598, 333-117954,
and 333-127491 and Form S-8 Registration Statement File No. 333-111437.
RADA ELECTRONIC INDUSTRIES LTD.
6-K Items
1. RADA Electronic Industries Ltd. Proxy Statement for Annual General
Meeting to be held August 15, 2006.
2. RADA Electronic Industries Ltd. Proxy Card.
ITEM 1
RADA ELECTRONIC INDUSTRIES LTD.
7 Giborei Israel Street,
Netanya 42504, Israel
--------------------------
NOTICE OF 2006 ANNUAL GENERAL MEETING OF SHAREHOLDERS
--------------------------
RADA Electronic Industries Ltd. Shareholders:
We cordially invite you to the 2006 Annual General Meeting of Shareholders
to be held at 10 a.m. on Tuesday, August 15, 2006 at our offices at 7 Giborei
Israel Street, Netanya, Israel, for the following purposes:
(1) To elect two Class A directors for terms expiring in 2009;
(2) To elect two outside directors for terms expiring in 2009;
(3) To approve the compensation of our outside directors;
(4) To amend our 2003 Stock Option Plan to provide for the issuance
thereunder of an additional 1,500,000 ordinary shares;
(5) To increase our authorized ordinary share capital;
(6) To amend our Articles of Association to add Article 46(c), according
to which we will not be required to distribute copies of our annual
audited financial statements to our shareholders;
(7) To authorize Mr. Herzle Bodinger, the Chairman of our Board of
Directors, to serve concurrently as our Chief Executive Officer;
(8) To ratify the reappointment of Kost Forer Gabbay & Kasierer,
independent certified public accountants in Israel, a member firm of
Ernst & Young Global, as our independent registered public accountants
for the year ending December 31, 2006 and to authorize our Board of
Directors to determine their compensation based on the recommendation
of our Audit Committee; and
(9) To review and discuss our auditor's report, and consolidated financial
statements for the year ended December 31, 2005.
The Board of Directors recommends that you vote in favor of all of the
items, which are described in the attached Proxy Statement.
Shareholders of record at the close of business on June 16, 2006 are
entitled to notice of and to vote at the Meeting. You can vote by proxy either
by mail or in person. If voting by mail, the proxy must be received by our
transfer agent or at our registered office in Israel at least forty-eight (48)
hours prior to the appointed time of the Meeting to be validly included in the
tally of ordinary shares voted at the Annual General Meeting. Detailed proxy
voting instructions are provided both in the Proxy Statement and on the enclosed
proxy card.
By Order of the Board of Directors,
/s/ Herzle Bodinger
Herzle Bodinger,
Chairman of the Board of Directors
Netanya, Israel
July 6, 2006
RADA ELECTRONIC INDUSTRIES LTD.
7 Giborei Israel Street,
Netanya 42504, Israel
--------------------------
PROXY STATEMENT
--------------------------
2006 ANNUAL GENERAL MEETING OF SHAREHOLDERS
This statement is being furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of RADA Electronic Industries
Ltd., to be voted at the 2006 Annual General Meeting of Shareholders, or the
Meeting, and at any adjournment thereof, pursuant to the accompanying Notice of
2006 Annual General Meeting of Shareholders. The Meeting will be held on
Tuesday, August 15, 2006 at our offices at 7 Giborei Israel Street, Netanya,
Israel.
This Proxy Statement, the attached Notice of 2006 Annual General
Meeting and the enclosed proxy card, as well as our audited financial statements
for the year ended December 31, 2005, are being mailed to shareholders on or
about July 10, 2006.
Purpose of the Annual General Meeting
It is proposed that at the Meeting the following resolutions be
adopted (i) to elect two Class A directors for terms expiring in 2009; (ii) to
elect two outside directors for terms expiring in 2009; (iii) to approve the
compensation of our outside directors; (iv) to amend our 2003 Stock Option Plan
to provide for the issuance thereunder of an additional 1,500,000 ordinary
shares; (v) to increase our authorized ordinary share capital; (vi) to amend our
Articles of Association to add Article 46(c), according to which we will not be
required to distribute copies of our annual audited financial statements to our
shareholders; (vii) to authorize Mr. Herzle Bodinger, the Chairman of our Board
of Directors, to serve concurrently as our Chief Executive Officer; and (viii)
to ratify the reappointment of Kost Forer Gabbay & Kasierer, independent
certified public accountants in Israel, a member firm of Ernst & Young Global,
as our independent registered public accountants for the year ending December
31, 2006 and to authorize our Board of Directors to determine their compensation
based on the recommendation of our Audit Committee. In addition, our Directors'
Annual Report to Shareholders, auditor's report and consolidated financial
statements for the year ended December 31, 2005 will be reviewed and discussed
at the Meeting.
We are not aware of any other matters that will come before the
Meeting. If any other matters properly come before the Meeting, the persons
designated as proxies intend to vote on such matters in accordance with the
judgment of the Board of Directors.
Proxy Procedure
Only holders of record of our ordinary shares, par value of NIS 0.005
per share, as of the close of business on June 16, 2006, are entitled to notice
of, and to vote in person or by proxy at, the Meeting.
Shares eligible to be voted and for which a proxy card is properly
signed and returned and actually received by our transfer agent or at our
registered office in Israel at least forty-eight (48) hours prior to the
beginning of the Meeting will be voted as directed. If directions are not given
or directions are not in accordance with the options listed on a signed and
returned proxy card, such shares will be voted FOR the nominees for directors
and FOR each proposal for which the Board of Directors recommends a vote FOR.
Unsigned or unreturned proxies, including those not returned by banks, brokers,
or other record holders, will not be counted for quorum or voting purposes.
We will bear the cost of soliciting proxies from our shareholders.
Proxies will be solicited by mail and may also be solicited personally or by
telephone by our directors, officers and employees. We will reimburse brokerage
houses and other custodians, nominees and fiduciaries for their expenses in
accordance with the regulations of the U.S. Securities and Exchange Commission
concerning the sending of proxies and proxy material to the beneficial owners of
stock.
You may vote by submitting your proxy with voting instructions by mail
if you promptly complete, sign, date and return the accompanying proxy card in
the enclosed self-addressed envelope to our transfer agent or to our registered
office in Israel at least forty-eight (48) hours prior to the appointed time of
the Meeting. You may revoke your proxy at any time prior to the exercise of
authority granted in the proxy by giving a written notice of revocation to our
Corporate Secretary, by submitting a subsequently dated, validly executed proxy,
or by voting in person.
Quorum and Voting
As of June 16, 2006, the record date for determination of shareholders
entitled to vote at the Meeting, there were outstanding 26,144,027 ordinary
shares. Each ordinary share entitles the holder to one vote.
The presence of two shareholders, holding at least one third (1/3) of
our issued share capital voting rights, represented in person or by proxy at the
Meeting, will constitute a quorum. An 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 thereon, is required to approve each of the
proposals, except as otherwise stated in the proposal.
We have received indications from our principal shareholder, Mr. Howard
P.L. Yeung, who holds approximately 40% of our issued and outstanding ordinary
shares, that he presently intends to vote for all of the nominees for director
and in favor of all of the items to be acted upon at the Meeting.
Securities Ownership by Certain Beneficial Owners and Management
The following table sets forth certain information as of June 16, 2006
regarding the beneficial ownership by (i) all shareholders known to us to own
beneficially more than 5% of our outstanding ordinary shares, (ii) each director
and (iii) all directors and executive officers as a group:
Number of Percentage of
Ordinary Shares Outstanding
Name of Beneficial Owner Beneficially Owned (1) Ordinary Shares (2)
------------------------ ---------------------- -------------------
Howard P.L. Yeung (3)(4)........ 20,407,861 59.32%
Kenneth Yeung (3)............... 1,350,086 6.04%
Iroquois Capital LLP (5) ....... 1,488,047 5.4%
Smithfield Fiduciary LLC (6) .. 1,711,190 6.2%
Herzle Bodinger ................ 300,000 1.1%
Adrian Berg (7)................. 256,600 1.0%
Roy Kui Chuen Chan (8).......... 176,600 *
Ben Zion Gruber (9)............. 254,082 1.00%
Michael Letchinger.............. - -
Hava Snir ...................... - -
Zvi Tropp ..................... - -
All directors as a group
(10 persons) (10)............... 1,253,082 4.56%
-----------------
* Less than 1%
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. In addition, ordinary shares
relating to options currently exercisable or exercisable within 60 days of
the record date are deemed outstanding for computing the percentage of the
person holding such
2
securities but are not deemed outstanding for computing the percentage of
any other person. Except as indicated by footnote, and subject to community
property laws where applicable, the persons named in the table have sole
voting and investment power with respect to all shares shown as
beneficially owned by them.
(2) Based on 26,144,027 ordinary shares issued and outstanding as of June 16,
2006.
(3) Of the 20,407,861 ordinary shares, 1,350,086 shares are held by Horsham
Enterprises Ltd., a corporation incorporated in the British Virgin Islands.
Messrs. Howard P.L. Yeung and his brother Kenneth Yeung are the beneficial
owners, in equal shares, of Horsham Enterprises Ltd. Accordingly, Messrs.
Yeung may be deemed to be the beneficial owners of the ordinary shares held
by Horsham Enterprises Ltd.
(4) Includes 8,265,306 ordinary shares issuable upon the exercise of currently
exercisable warrants issued to Mr. Howard P.L. Yeung.
(5) Includes 218,750 ordinary shares issuable upon currently exercisable
warrants at an exercise price of $2.50 per share and 333,333 ordinary
shares issuable upon currently exercisable convertible notes that were
issued in connection with the private placement of our shares in July 2004.
In addition, 630,259 ordinary shares issuable upon currently exercisable
warrants at an exercise price of $2.10 per share that was issued in
connection with the private placement of our shares in April 2005.
(6) Includes 400,000 ordinary shares issuable upon the exercise of currently
exercisable warrants at an exercise price of $2.50 per share and 609,524
ordinary shares issuable upon the exercise of currently exercisable
convertible notes that were issued in connection with the private placement
of our shares in July 2004. In addition, includes 472,541 ordinary shares
issuable upon the exercise of currently exercisable warrants at an exercise
price of $2.10 per share that were issued in connection with the private
placement of our shares in April 2005.
(7) Includes 252,000 ordinary shares subject to currently exercisable options
granted under our stock option plan at an exercise price of $1.34 per
share. The options expire in September 2013.
(8) Includes 172,000 ordinary shares subject to currently exercisable options
granted under our stock option plan at an exercise price of $1.34 per
share. The options expire in September 2013.
(9) Includes 204,082 ordinary shares issuable upon currently exercisable
warrants at an exercise price of $2.00 per share that were issued in
connection with the private placement of our shares in June 2002 and 50,000
ordinary shares subject to currently exercisable options granted under our
stock option plans, at an exercise price of $1.34 per share. Such options
expire in September 2013.
(10) Includes 204,082 ordinary shares issuable upon the exercise of currently
exercisable warrants, at an exercise price of $2 per share that were issued
in connection with a private placement of our shares in June 2002. Such
warrants expire on June 30, 2007.
I. ELECTION OF DIRECTORS
(Item 1 on the Proxy Card)
The term of office of our two Class A directors, Messrs. Roy Kui Chuen
Chan and Ben Zion Gruber, expire as of the Meeting, and they will both be
standing for reelection to serve as Class A directors for new terms of three
years each.
Our Board of Directors is divided into three classes: Class A, Class B
and Class C. Generally, at each annual meeting one class of directors will be
elected for a term of three years. In addition to these three classes of
directors, we have two "outside directors" as defined by the Israeli Companies
Law, who hold office for a term of three years, which may be extended for only
one additional three year period. All the members of our Board of Directors
(except the outside directors as detailed in Item 2 below) may be reelected upon
completion of their term of office.
Under a recent amendment to the Israeli Companies Law, our Board of
Directors is required to determine the minimum number of directors who must have
"accounting and financial expertise" (as such term is defined in regulations
promulgated under the Israeli Companies Law). In addition, under the
3
Israeli Companies Law at least one of our outside directors must have
"accounting and financial expertise." Our Board of Directors has determined that
our Board of Directors will include at least one director who has "accounting
and financial expertise" within the meaning of the regulations promulgated under
the Israeli Companies Law. Our Board of Directors has determined that both Mr.
Adrian Berg, a member of our Board of Directors, and Mr. Eli Akavia, a nominee
for outside director and a proposed audit committee member, have the requisite
"accounting and financial expertise."
The incumbent Class B directors and Class C director will hold office
until the 2007 and 2008 Annual General Meetings of Shareholders, respectively,
or until their successors are duly elected and qualified. The term of the
directors currently serving as Class A directors expires with this Meeting.
In general, under NASDAQ Marketplace Rules, as of July 31, 2005, a
majority of our Board of Directors must qualify as independent directors and our
audit committee must have at least three members and be comprised only of
independent directors, each of whom satisfies the respective "independence"
requirements of the Securities and Exchange Commission and NASDAQ. However,
under an amendment to the NASDAQ Marketplace Rules, foreign private issuers,
such as our Company, may follow certain home country corporate governance
practices without the need to seek individual exemptions from NASDAQ. Pursuant
to this amendment, a foreign private issuer must provide NASDAQ with a letter
from outside counsel in its home country certifying that the issuer's corporate
governance practices are not prohibited by home country law. On May 5, 2005, we
provided NASDAQ with a notice of non-compliance with respect to (among other
things) the requirement to maintain a majority of independent directors, as
defined under the NASDAQ Marketplace Rules. Instead, we follow Israeli law and
practice which requires that we appoint at least two outside directors to our
Board of Directors. In addition, in accordance with SEC rules, we have the
mandated three independent directors, as defined by the SEC and NASDAQ rules, on
our audit committee.
We also do not follow the NASDAQ requirement regarding the process for
the nomination of directors; instead, we follow Israeli law and practice in
accordance with which directors are elected by the shareholders, unless
otherwise provided in a company's articles of association. Our Articles of
Association do not provide otherwise. Our practice has been that our director
nominees are presented in our proxy statement for election at our annual
meetings of shareholders.
Accordingly our Board of Directors proposes the election of Messrs. Roy
Kui Chuen Chan and Ben Zion Gruber, to serve as Class A directors, to hold
office for one year until the Annual General Meeting of Shareholders to be held
in 2009.
Should either of the nominees be unavailable for election, the proxies
will be voted for a substitute nominee designated by our Board of Directors.
Each of the nominees is expected to be available.
Set forth below is information about each nominee, including age,
position(s) held with our Company, principal occupation, business history and
other directorships held.
Nominees for Election as Class A Directors for Term Expiring in 2009
Ben Zion Gruber, 48, has served as a director since 2002, and was
elected as a designee of the shareholders (other than Howard Yeung) that
participated in our 2002 private placement. Mr. Gruber is founder and
manager of several real estate and construction companies and entrepreneur
of several hi-tech companies. Mr. Gruber is a Colonel (Res.) of the Israeli
Defense Forces serving as Brigadier Commander of Tank Battalion. Mr. Gruber
holds an M.A. degree in Behavioral Sciences from Tel Aviv University, a B.Sc.
degree in Engineering of microcomputers from "Lev" Technology Institute
and is currently studying for his Ph.D. degree in Behavioral Sciences at the
University of Middlesex, England. In addition Mr. Gruber is a graduate of
a summer course in Business Administration at Harvard University, as well as
several other courses and training in management, finance and entrepreneurship.
Mr. Gruber is a member of the Board of Employment Service of the Government
of Israel, of the Board of Directors of the Company for Development of Efrat
Ltd., of the Board of the Association of Friends of Kefar Shaul Hospital, of
the Ethics Committee of the Eitanim and Kefar Shaul hospitals as well as of
several other charitable organizations.
Roy Kui Chuen Chan, 59, has served as a director since November
1997. Mr. Chan is a designee of Horsham Enterprises Ltd. Mr. Chan has been
legal consultant to Yeung Chi Shing Estates Limited, a
4
Hong Kong holding company with major interests in hotels and real estate in Hong
Kong, China, the U.S., Canada and Australia, and its international group of
companies, since 1984. Mr. Chan presently serves as legal counsel to several
Hong Kong companies, including Horsham Enterprises Ltd. Mr. Chan received
his qualification as a solicitor and has been a member of the U.K. bar since
1979 after he completed five years of training at Turners Solicitors.
Under the Israeli Companies Law and our Articles of Association, 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, will be necessary for shareholder approval of the election of the two
nominees for Class A director for terms of three years each.
The Board of Directors recommends a vote FOR the election of each
nominee for director named above.
Directors Continuing in Office
Herzle Bodinger, 63, has served as a director since 1997. He joined
us in May 1997 as the President of our U.S. subsidiary, Rada Electronic
Industries Inc., in charge of international marketing activities and was
appointed our President and Chief Executive Officer in June 1998. General
(Res.) Bodinger has served as Chairman of our Board of Directors since July
1998. General (Res.) Bodinger served as the Commander of the Israeli Air
Force from January 1992 through July 1996. During the last 35 years of his
service, he also served as a fighter pilot while holding various command
positions. General (Res.) Bodinger holds a B.A. degree in Economics and
Business Administration from the Bar-Ilan University and completed the 100th
Advanced Management Program at Harvard University. Mr. Bodinger is a Class B
director whose term will expire in 2007.
Michael Letchinger, 51, has served as a director since November 2004.
Mr. Letchinger is a designee of Horsham Enterprises Ltd. Since 2000, Mr.
Letchinger has been General Counsel and Senior Vice President-Managing of
Potomac Golf Properties, LLC, a company engaged in real estate development
and free standing golf facilities. From 1994 to 2000, Mr. Letchinger was
General Counsel and Senior Vice President-Managing of Potomac Development
Associates, a sister company of Potomac Golf Properties, LLC. Mr.
Letchinger holds a B.A. degree in economics from Brandeis University and a JD
from University of Chicago Law School. Mr. Letchinger is a Class B director
whose term will expire in 2007.
Adrian Berg, 59, has served as a director since November 1997.
Mr. Berg is a designee of Horsham Enterprises Ltd. Since 1976, Mr. Berg has
been a chartered accountant and senior partner at the U.K. firm, Alexander &
Co., Chartered Accountants. Mr. Berg holds a B.Sc. degree in Industrial
Administration from the University of Salford and received his qualification
as a fellow of the U.K. Institute of Chartered Accountants in 1973 after he
completed three years of training at Arthur Andersen & Co. Mr. Berg is a
Class C director whose term will expire in 2008.
Audit Committee
Under the Israeli Companies Law, the board of directors of any public
company must establish an audit committee. The audit committee must consist of
at least three directors and must include all of the outside directors. The
audit committee may not include the chairman of the board, any director employed
by the company or providing services to the company on an ongoing basis, a
controlling shareholder or any of the controlling shareholder's relatives. In
addition, the NASDAQ Marketplace Rules require us to establish an audit
committee comprised of at least three members, all of which must be independent
directors, each of whom is financially literate and satisfies the respective
"independence" requirements of the Securities and Exchange Commission and NASDAQ
and one of whom has accounting or related financial management expertise at
senior levels within a company.
Our Audit Committee, established in accordance with Section 114 of the
Israeli Companies Law and Section 3(a)(58)(A) of the Securities Exchange Act of
1934, assists our Board of Directors in overseeing the accounting and financial
reporting processes of our Company and audits of our financial statements,
including the integrity of our financial statements, compliance with legal and
regulatory requirements, our independent public accountants' qualifications and
independence, the performance of our internal audit
5
function and independent public accountants, finding any defects in the business
management of our Company for which purpose the Audit Committee may consult with
our independent auditors and internal auditor, proposing to the Board of
Directors ways to correct such defects, approving related-party transactions as
required by Israeli law, and such other duties as may be directed by our Board
of Directors.
Our Audit Committee consists of three Board members, two of which
satisfy the "independence" requirements of the Securities and Exchange
Commission and NASDAQ. We also comply with Israeli law requirements for audit
committee members. Our Audit Committee is currently composed of Hava Snir, Zvi
Tropp and Ben Zion Gruber. Ms. Snir and Mr. Tropp qualify both as independent
directors under the NASDAQ Stock Market requirements and as outside directors
under the Israeli Companies Law requirements. Mr. Ben Zion Gruber serves as the
third member of our audit committee. The Audit Committee meets at least once
each quarter. Our Board of Directors determined that Mr. Zvi Trop meets the
definition of an audit committee financial expert, as defined in Item 401(h) of
Regulation S-K.
Under the Israeli Companies Law, neither Ms. Snir or Mr. Tropp are
eligible to serves as outside directors after this year. Accordingly, we intend
to elect two new outside directors at the Meeting who will also serve on our
Audit Committee.
The responsibilities of the Audit Committee also include approving
related-party transactions as required by law. Under Israeli law, an Audit
Committee may not approve an action or a transaction with a controlling
shareholder, or with an office holder, unless at the time of approval two
outside directors are serving as members of the Audit Committee and at least one
of the outside directors was present at the meeting in which an approval was
granted.
The Audit Committee reviewed our audited financial statements for the
year ended December 31, 2005 and members of the committee met with both
management and our external auditors to discuss those financial statements.
Management and the external auditors have represented to the Audit Committee
that the financial statements were prepared in accordance with the generally
accepted accounting principles. Members of the Audit Committee have received
from and discussed with the external auditors their written disclosure and
letter regarding their independence from our Company as required by Independence
Standards Board Standard No. 1. Members of the Audit Committee also discussed
with the external auditors any matters required to be discussed by Statement on
Auditing Standards No. 61. Based upon these reviews and discussions, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in our Annual Report on Form 20-F for the year ended
December 31, 2005.
Compensation
The following table sets forth all compensation we paid with respect to
all of our directors and executive officers as a group for the year ended
December 31, 2005.
Salaries, fees, Pension, retirement
commissions and bonuses and similar benefits
----------------------- --------------------
All directors and executive officers
as a group, consisting then of 11 persons.... $808,750 $215,530
During the year ended December 31, 2005, we paid each of our outside
directors a per meeting attendance fee of NIS 1,000 ($217) plus an annual fee of
NIS 18,000 ($3,910).
As of December 31, 2005, our directors and executive officers as a group,
consisting of eleven persons, held options to purchase an aggregate of 1,374,000
ordinary shares, at exercise prices ranging from $0.69 to $1.34 per share,
vesting over three years. These options were issued under our 2003 Stock Option
Plan and expire in 2013. In 2005, 144,000 options previously granted under our
1999 Stock Option Plan were cancelled and 53,333 options were forfeited.
Stock Option Plans
1996 Stock Option Plan
Our 1996 Stock Option Plan, or the 1996 Plan, authorizes the issuance
of options to purchase an aggregate of 5,600 ordinary shares to key employees
and consultants, including officers and directors of
6
our Company and its subsidiaries, who are in position to contribute
significantly to our success in the judgment of the board of directors or, if
appointed in the future, a committee which will administer the 1996 Plan.
Options granted under the 1996 Plan may be for a maximum term of ten
years from the date of grant. The exercise price of an option granted to an
employee may not be less than 60% of the fair market value of our ordinary
shares on the date of grant of the option. The exercise price of an option to a
non-employee director or consultant may not be less than 80% of the fair market
value of our ordinary shares on the date of grant of the option. If any option
expires without having been fully exercised, the shares with respect to which
such option has not been exercised will be available for future grants.
Options may not be transferable by the optionee otherwise than by will
or the laws of descent and distribution and during the optionee's lifetime are
exercisable only by the optionee. Options terminate before their expiration
dates one year after the optionee's death while in our employ, three months
after the optionee's retirement for reasons of age or disability or involuntary
termination of employment other than for cause, and immediately upon voluntary
termination of employment or involuntary termination of employment for cause.
Our Board of Directors may, at its discretion, modify, revise or
terminate the 1996 Plan at any time, except that the aggregate number of shares
issuable pursuant to options may not be increased (except in the event of
certain changes in our capital structure), the eligibility provisions and
minimum option price may not be changed, or the permissible maximum term of
options may not be increased without the consent of our shareholders.
The 1996 Plan also contained provisions protecting optionees against
dilution of the value of their options in the case of stock splits, stock
dividends or other changes in our capital structure, in the event of any
proposed reorganization or merger involving our Company or in the event of any
spin-off or distribution of assets to our shareholders.
The Board of Directors or the committee will determine the number of
shares covered by each option, and the formulation, within the limitations of
the 1996 Plan, of the form of such option.
As of June 16, 2006, options to purchase 4,400 ordinary shares had been
granted to two employees and directors at an average exercise price of $3.84 per
share. All of such options are currently exercisable. No options have been
exercised to date.
1999 Stock Option Plan
Our 1999 Stock Option Plan, or the 1999 Plan, provides for the issuance
of stock options to purchase an aggregate of 325,200 of our ordinary shares.
Options under the 1999 Plan may be issued to key employees and consultants,
including officers and directors of our Company and its subsidiaries who, in the
judgment of the Board of Directors or, if appointed in the future, a committee
which will administer the 1999 Plan, are in a position to contribute
significantly to our success. The terms of the 1999 Plan are substantially the
same as those of the1996 Plan. As of June 16, 2006, options to purchase 279,000
ordinary shares had been granted to 39 employees at an average exercise price of
$2.39 per share. Of such options, options to purchase 250,502 ordinary shares
are currently exercisable.
2003 Stock Option Plan
Our 2003 Stock Option Plan, or the 2003 Plan, provides for the issuance
of stock options to purchase an aggregate of 2,000,000 of our ordinary shares.
Options under the 2003 Plan may be issued to employees including officers and
directors of our Company and its subsidiaries who, in the judgment of the Board
of Directors based on the recommendation of our compensation committee, are in a
position to contribute significantly to our success. The provisions of our 2003
Plan are designated to allow for the tax benefits promulgated under the Israeli
Income Tax Ordinance [New Version]. Our Board of Directors has resolved that all
options that will be granted to Israeli residents under the 2003 Plan will be
taxable under the "capital gains path." Pursuant to this path the profit
realized by the employee is taxed as a capital gain (25%) if the options or
shares are held by a trustee for at least 24 months from the end of the tax year
in
7
which such options were granted. If the shares are sold before the lapse of such
24 month period, the profit is re-characterized as ordinary income. The Company
is not allowed a corresponding salary expense, even in the event the profit is
taxed as ordinary income. Otherwise, the terms of the 2003 Plan are
substantially the same as those of the 1996 Plan. As of June 16, 2006, 136,003
options have been exercised, 178,497 have been cancelled or forfeited and
options to purchase 1,612,502 ordinary shares are currently exercisable.
II. ELECTION OF TWO OUTSIDE DIRECTORS
(Items 2A and 2B on the Proxy Card)
The Israeli Companies Law requires Israeli companies with shares that
have been offered to the public in or outside of Israel to appoint at least two
outside directors. No person may be appointed as an outside director if the
person or the person's relative, partner, employer or any entity under the
person's control has or had, on or within the two years preceding the date of
the person's appointment to serve as outside director, any affiliation with the
company or any entity controlling, controlled by or under common control with
the company. The term affiliation includes: an employment relationship; a
business or professional relationship maintained on a regular basis; control;
and service as an officer holder, excluding service as an outside director of a
company that is offering its shares to the public for the first time. In
addition, no person may serve as an outside director if the person's position or
other activities create, or may create, a conflict of interest with the person's
responsibilities as an outside director or may otherwise interfere with the
person's ability to serve as an outside director. If, at the time outside
directors are to be appointed, all current members of a company's board of
directors are of the same gender, then at least one outside director must be of
the other gender.
According to a March 2005 amendment to the Israeli Companies Law,
effective as of January 2006 at least one of the outside directors must be an
accounting and financial expert and all other outside directors must be
professional experts, as such terms are defined by regulations promulgated under
the Israeli Companies Law.
Outside directors are elected by the shareholders. Outside directors
serve for an initial three-year term, which may be renewed for only one
additional three-year term. Outside directors can be removed from office only by
the same special percentage of shareholders as can elect them, or by a court,
and then only if an outside director ceases to meet the statutory qualifications
with respect to his or her appointment or if the outsider director violates his
or her duty of loyalty to the company.
Any committee of the board of directors that is authorized to exercise
powers vested in the board of directors must include at least one outside
director and the audit committee must include all of the outside directors.
Ms. Hava Snir and Mr. Zvi Tropp were first elected as outside directors
in 2000 and were reelected to serve as outside directors of our Company at our
2003 Annual General Meeting of Shareholders for one additional three-year term,
following which their service as outside directors may not be extended.
Accordingly, at the Meeting, shareholders will be asked to elect Ms.
Nurit Mor and Mr. Eli Akavia as outside directors of our Company to serve for
three-year terms until our 2009 Annual General Meeting of Shareholders or until
they or their successors are elected and qualified. Our Board of Directors has
determined that each of Ms. Nurit Mor and Mr. Eli Akavia qualifies as an outside
director within the meaning of the Israeli Companies Law. Our Board of Directors
has further determined that Mr. Eli Akavia qualifies as an accounting and
financial expert and that Ms. Nurit Mor qualify as professional expert, as such
terms are defined by regulations promulgated under the Israeli Companies Law.
Set forth below is information about each of the nominees for outside
director, including principal occupation, business history and other
directorships held (if any).
Eli Akavia, 58, has since August 2002 served as an independent
consultant for accounting and audit matters. From 1979 to 2002 Mr. Akavia served
as partner in various positions in Luboshitz Kasierer, currently a member firm
of Ernst & Young International. Since June 2004, Mr. Akavia has served as a
director of Eden Springs Ltd., and since December 2003 Mr. Akavia has served as
a director of On Track Innovation Ltd., both public Israeli companies. Mr.
Akavia has been a Certified Public Accountant (Israel) since 1975 and holds a
B.Sc. degree in Mathematics and Economics from the Hebrew University in
Jerusalem and an M.B.A. degree from the Tel Aviv University.
8
Nurit Mor, 63, has since September 2005 served as an outside director
of Aspen Real Estate Ltd. and from May 2004 Ms. Mor has served as an outside
director of I.B.I Investment House Ltd., both public Israeli companies. From
1973 to 2003 Ms. Mor served in various positions with the Bank of Israel,
including director of public complaints and customer relations. Ms. Mor
holds a B.A. degree in Economics and Statistics and an M.A. in Business
Administration from the Hebrew University, Jerusalem, and an M.A. degree
in Labor Studies form the Tel Aviv University.
The election of each of the nominees for outside director requires the
affirmative vote of a majority of ordinary shares represented at the Meeting, in
person or by proxy, entitled to vote and voting on the matter, provided that
either (i) the shares voting in favor of such resolution include at least
one-third of the shares of non-controlling shareholders who vote on the matter
(excluding the vote of abstaining shareholders), or (ii) the total shareholdings
of the non-controlling shareholders who vote against such proposal do not
represent more than 1% of the voting rights in our Company.
We are not aware of any reason why either of the nominees, if elected,
would be unable or unwilling to serve as an outside director. In the event that
either of the named nominees for outside director would be unable to serve, the
proxies will be voted for the election of such other person or persons as shall
be nominated by the independent directors of our Company and ratified by our
Board of Directors.
The Board of Directors recommends a vote FOR the election of each of
the nominees for outside director.
III. COMPENSATION OF OUR OUTSIDE DIRECTORS
(Item 3 on the Proxy Card)
The Israeli Companies Law provides that outside directors are entitled
to receive compensation and reimbursement of expenses pursuant to regulations
promulgated under the Israeli Companies Law. Pursuant to such regulations,
companies whose shares are traded on an exchange outside Israel, such as our
Company, where the foreign (non-Israeli) law imposes additional obligations on
outside directors more burdensome than those imposed under Israeli law, may pay
their outside directors a maximum annual directors fee of NIS 100,000,
(approximately $22,000) per annum, and a maximum attendance fee of NIS 3,000,
(approximately $667) per meeting, in both instances linked twice yearly to the
Israeli Consumer Price Index. In addition, pursuant to the regulations, a
company can grant options to its outside directors, provided that certain
provisions are met.
Pursuant to the Israeli Companies Law, the terms of compensation for
directors of a public company, such as our Company require approval of the Audit
Committee, Board of Directors and shareholders, in that order. At this Meeting
two new outside directors are proposed for election. The Audit Committee and the
Board of Directors recommend that at the Meeting the shareholders authorize the
Company to pay our outside directors an annual directors' fee of NIS 20,000,
(approximately $4,450) and an attendance fee of NIS 1,200 (approximately $270)
per meeting attended, in compliance with the regulations under the Israeli
Companies Law regarding outside directors. VAT will be added to the fees, and
such fees will be linked to the Israeli Consumer Price Index twice a year. Our
Audit Committee and Board of Directors have approved such fees, subject to the
approval of the shareholders at the Meeting. In addition, our Audit Committee
and Board of Directors determined that when we meet all the requirements under
the Israeli Companies Law and the regulations promulgated pursuant thereto, we
will grant each of our outside directors options to purchase our ordinary
shares. The number of options to be granted to each director will equal the
average number of options previously granted to other members of our Board of
Directors, but in no event will a grant exceed options to purchase 75,000
shares. The exercise price per share will be the higher of the closing price of
our shares on the date of grant or the average closing price of our shares
during the thirty (30) trading days immediately prior to the date of grant. Such
options, when and if granted, will vest, in equal monthly installments,
commencing on the date of grant and ending upon the termination of the outside
directors terms. All of the terms of our 2003 Stock Option Plan will apply to
these options.
It is therefore proposed that at the Meeting the following resolution
be adopted:
"RESOLVED, that the Company is authorized to pay its outside
directors an annual directors' fee of NIS 20,000, (approximately
$4,450) and an attendance fee of NIS 1,200,
9
(approximately $270) per meeting attended, in accordance with
applicable law and regulations. Further, and subject to fulfillment of
all the conditions required under the Israeli Companies Law and the
regulations promulgated pursuant thereto, to approve the grant of
options to purchase ordinary shares of the Company in an amount equal
to the average number of options previously granted to other members of
our Board of Directors, but in no event will a grant exceed options to
purchase 75,000 ordinary shares. The exercise price per share will be
the higher of the closing price of the Company's ordinary shares on the
date of grant or the average closing price of the ordinary shares
during the thirty (30) trading days immediately prior to the date of
grant. Such options, when and if granted, will vest, on equal monthly
installments, commencing on the date of grant and ending upon the
termination of the outside directors terms, and will be subject to all
other terms of the Company's 2003 Stock Option Plan."
The affirmative vote of a majority of the ordinary shares represented
at the Meeting in person or by proxy and voting thereon is required to adopt the
foregoing resolution.
The Board of Directors recommends a vote FOR approval of the foregoing
resolution.
IV. APPROVAL OF AN AMENDMENT TO OUR 2003 STOCK OPTION PLAN
TO PROVIDE FOR THE ISSUANCE THEREUNDER OF AN
ADDITIONAL 1,500,000 ORDINARY SHARES
(Item 4 on the Proxy Card)
Our 2003 Stock Option Plan, or the 2003 Plan, which we adopted in 2003,
authorized the grant of options to purchase up to 2,000,000 of our ordinary
shares.
As of the date of this Proxy Statement, only 23,100 ordinary shares
are available for future option grants under the 2003 Plan.
Subject to the approval by our shareholders of an increase in our
authorized ordinary share capital, our Board of Directors believes that it is
necessary to increase the number of ordinary shares issuable under the 2003 Plan
by an additional 1,500,000 ordinary shares, so that we continue to have the
ability to grant options under the 2003 Plan in order to attract and retain
talented personnel.
Accordingly, at the Meeting, shareholders will be asked to amend the
2003 Plan to provide for the issuance thereunder of an additional 1,500,000
ordinary shares.
It is therefore proposed that at the Meeting the following resolution
be adopted:
"RESOLVED, to amend the Company's 2003 Stock Option Plan to
provide for the issuance thereunder of an additional 1,500,000 ordinary
shares."
The affirmative vote of a majority of the ordinary shares represented
at the Meeting in person or by proxy and voting thereon is required to adopt
said resolution.
The Board of Directors recommends a vote FOR approval of the foregoing
resolution.
V. INCREASE OUR AUTHORIZED ORDINARY SHARE CAPITAL
(Item 5 on the Proxy Card)
Our current authorized and registered ordinary share capital is NIS
237,500, divided into 47,500,000 ordinary shares of NIS 0.005 par value each. At
present, we have 26,144,027 ordinary shares outstanding and 20,214,351 ordinary
shares reserved for issuance pursuant to existing convertible notes, options and
warrants. Accordingly, we need to increase our authorized share capital to
permit the grant of additional options under our 2003 Option Plan, as amended at
the Meeting and to provide us with the ability to issue additional shares for
general corporate purposes. Our Board of Directors has unanimously adopted a
resolution recommending that our shareholders increase our authorized ordinary
share capital by NIS 7,500 divided into 1,500,000 ordinary shares of NIS 0.005
par value each and amend our Memorandum of Association and Articles of
Association to reflect such increase.
It is proposed that at the Meeting the shareholders adopt the following
resolution, which our Board of Directors believes to be in the best interests of
us and of our shareholders:
10
"RESOLVED, that our Memorandum of Association and Articles of
Association be amended to increase our authorized and registered
ordinary share capital to 1,500,000 ordinary shares of NIS 0.005 par
value each."
The affirmative vote of the holders of 75% of the ordinary shares
represented at the Meeting in person or by proxy and entitled to vote will be
necessary to approve the increase of the authorized share capital of the Company
and the amendment of the Memorandum of Association and Articles of Association
to reflect the same.
The Board of Directors recommends a vote FOR the increase of the
authorized share capital of the Company.
VI. APPROVAL OF AN AMENDMENT TO OUR ARTICLES OF ASSOCIATION,
ACCORDING TO WHICH WE WILL NOT BE REQUIRED TO DISTRIBUTE COPIES
OF OUR ANNUAL AUDITED FINANCIAL STATEMENTS TO OUR SHAREHOLDERS
(Item 6 on the Proxy Card)
The Israeli Companies Law provides that companies whose shares are
traded only on an exchange outside Israel, such as our Company, are required,
unless its articles of association indicates otherwise, to distribute copies of
their annual audited financial statements to their shareholders.
Our Board believes that since our audited financial statements are
available on our website (www.rada.com) and on the SEC website (www.sec.gov), as
part of our Annual Report on Form 20-F, and will be sent to shareholders upon
written request, it is in the best interest of the Company to reduce the
considerable costs associated with mailing of the audited financial statements
by adding a new Article 46(c) to our Articles of Association, to provide that we
will not be required to distribute copies of our annual audited financial
statements to our shareholders.
It is therefore proposed that at the Meeting the shareholders adopt the
following resolution:
"RESOLVED, that Article 46(c) be added to our Articles of
Association, and will provide as follows: "The Company will not be
required to distribute copies of its annual audited financial
statements to its shareholders."
The affirmative vote of the holders of 75% of the ordinary shares
represented at the Meeting in person or by proxy and entitled to vote will be
necessary to approve the amendment of the Articles of Association.
The Board of Directors recommends a vote FOR the proposal to amend the
Company's Articles of Association by adding Article 46(c).
VII. AUTHORIZATION OF THE CHAIRMAN OF OUR BOARD OF
DIRECTORS TO SERVE CONCURRENTLY AS CHIEF EXECUTIVE OFFICER
(Item 7 on the Proxy Card)
The Israeli Companies Law provides that the chairman of the board of
directors of a public company may not hold the office of chief executive officer
or exercise any of the powers of the chief executive officer (as determined by
the Israeli Companies Law). However, the Israeli Companies Law also provides
that the general meeting of shareholders may authorize the chairman of the board
to serve as the chief executive officer of such public company for a period of
up to three years, commencing on the date of such authorization. Effective June
1, 2006, Mr. Herzle Bodinger, temporarily assumed the duties of Chief Executive
Officer upon the resignation of our then Chief Executive Officer. The Audit
Committee and our Board of Directors believes that it is in the best interests
of our Company and its shareholders that it be granted authority to appoint Mr.
Herzle Bodinger as Chief Executive Officer, while he concurrently serves as the
Chairman of our Board of Directors. The authorization will be for a term not
exceeding three years.
It is therefore proposed that at the Meeting our shareholders adopt the
following resolution:
"RESOLVED, that the Board of Directors is authorized to
appoint Mr. Herzle Bodinger to serve as both Chairman of the Board of
Directors and our Chief Executive Officer for a term not to exceed
three years."
11
The affirmative vote of the holders of a majority of the ordinary
shares represented at the Meeting, will be necessary for shareholder approval of
the foregoing resolution, provided that either (i) such majority vote includes
at least two-thirds of the ordinary shares represented at the Meeting in person
or by proxy that are held by non-controlling shareholders (excluding the votes
of the abstaining shareholders); or (ii) the total shareholdings of the
non-controlling shareholders who vote against the proposal do not represent more
than 1% of the voting rights in our company.
The Board of Directors recommends a vote FOR approval of the forgoing
resolution.
VIII. APPOINTMENT OF AUDITORS
(Item 8 on the Proxy Card)
Our Board of Directors first appointed Luboshitz Kasirer, independent
certified public accountants in Israel, then a member firm of Arthur Andersen,
as our auditors in 1999 and has reappointed the firm, which was merged into Kost
Forer Gabbay & Kasierer, and is now a member firm of Ernst & Young Global, as
our auditors since such time. Kost Forer Gabbay & Kasierer has no relationship
with us or any of our affiliates except as auditors. As a result of Kost Forer
Gabbay & Kasierer's knowledge of our operations, our Audit Committee and Board
of Directors are convinced that such firm has the necessary personnel,
professional qualifications and independence to act as our auditors. Our Board
of Directors has again recommended, pursuant to the recommendation of our Audit
Committee, that Kost Forer Gabbay & Kasierer be selected as our auditors for the
fiscal year ending December 31, 2006 and recommends that the shareholders ratify
and approve the selection. The remuneration of Kost Forer Gabbay & Kasierer will
be determined by our Board of Directors pursuant to the recommendation of our
Audit Committee.
The following resolution will be offered by the Board of Directors at
the Meeting:
"RESOLVED, that the appointment of Kost Forer Gabbay &
Kasierer, independent certified public accountants in Israel, a member
firm of Ernst & Young Global, as the independent registered public
accountants of the Company to conduct the annual audit of our financial
statements for the year ending December 31, 2006, and to authorize our
Board of Directors to determine their compensation based on the
recommendation of our Audit Committee."
The affirmative vote of the holders of a majority of the ordinary
shares represented at the Meeting in person or by proxy and entitled to vote and
voting thereon will be necessary for shareholder approval of the foregoing
resolution.
The Board of Directors recommends a vote FOR the foregoing resolution.
Fees Paid to Independent Public Accountants
The following table sets forth, for each of the last two fiscal years,
fees paid to our independent public accountants.
Year Ended December 31, Year Ended December 31,
2005 2004
----------------------- -----------------------
Audit Fees.............. $77,500 $66,000
Audit-Related Fees...... $7,500 -
Tax Fees................ - -
All Other Fees.......... - -
------- -------
Total ............. $85,000 $66,000
Audit Committee Pre-Approval Policies and Procedures
Our Audit Committee has adopted a policy and procedures for the
pre-approval of audit and non-audit services rendered by our independent
registered public accountants, Kost Forer Gabbay & Kasierer, a member firm of
Ernst & Young Global. Pre-approval of an audit or non-audit service may be given
as a general pre-approval, as part of the Audit Committee's approval of the
scope of the
12
engagement of our independent auditor, or on an individual basis. The policy
prohibits retention of the independent registered public accountants to perform
the prohibited non-audit functions defined in Section 201 of the Sarbanes-Oxley
Act or the rules of the SEC and also requires the Audit Committee to consider
whether proposed services are compatible with the independence of the public
accountants.
IX. REVIEW AND DISCUSSION OF OUR AUDITOR'S REPORT, DIRECTORS'
REPORT, AND THE CONSOLIDATED FINANCIAL STATEMENTS
At the Meeting, our Auditor's Report, Directors' Report, and the
Consolidated Financial Statements for the year ended December 31, 2005 will be
presented. We will hold a discussion with respect to the financial statements at
the Meeting. This item will not involve a vote of the shareholders.
OUR CHAIRMAN'S LETTER TO SHAREHOLDERS AND AUDITED FINANCIAL STATEMENTS FOR THE
YEAR ENDED DECEMBER 31, 2005 ARE ENCLOSED HEREWITH. COPIES OF THE ANNUAL REPORT
WILL BE MAILED WITHOUT CHARGE TO ANY SHAREHOLDER ENTITLED TO VOTE AT THE
MEETING, UPON WRITTEN REQUEST TO: RADA ELECTRONIC INDUSTRIES LTD., 7 GIBOREI
ISRAEL STREET, POLEG INDUSTRIAL ZONE, NETANYA, ISRAEL, ATTENTION: ELAN SIGAL,
CHIEF FINANCIAL OFFICER.
By Order of the Board of Directors,
/s/ Herzle Bodinger
Herzle Bodinger,
President and Chairman of the Board of Directors
Dated: July 6, 2006
13
ITEM 2
RADA ELECTRONIC INDUSTRIES LIMITED
7 GIBOREI ISRAEL STREET
NETANYA 42504, ISRAEL
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) Herzle Bodinger and Sarit Molcho, or
either of them, attorneys or attorney of the undersigned, for and in the name(s)
of the undersigned, with power of substitution and revocation in each to vote
any and all ordinary shares, par value NIS 0.005 per share, of RADA Electronic
Industries Limited (the "Company"), which the undersigned would be entitled to
vote as fully as the undersigned could if personally present at the Annual
General Meeting of Shareholders of the Company to be held on Tuesday, August 15,
2006 at 10:00 a.m. at the principal offices of the Company, 7 Giborei Israel
Street, Netanya 42504, Israel, and at any adjournment or adjournments thereof,
and hereby revoking any prior proxies to vote said shares, upon the following
items of business more fully described in the notice of and proxy statement for
such Annual General Meeting (receipt of which is hereby acknowledged):
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED. IF NO DIRECTION
IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR
AND ALL OF THE PROPOSALS SET FORTH ON THE REVERSE.
(Continued and to be signed on the reverse side)
ANNUAL GENERAL MEETING OF SHAREHOLDERS OF
RADA ELECTRONIC INDUSTRIES LIMITED
August 15, 2006
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND
"FOR" ALL OF THE PROPOSALS.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
------------------------------------------------------------------------------
1. To elect two Class A Directors for terms expiring in 2009.
[ ] FOR ALL NOMINEES NOMINEES:
( ) BEN ZION GRUBER
[ ] WITHHOLD AUTHORITY FOR ALL NOMINEES ( ) ROY KUI CHUEN CHAN
[ ] FOR ALL EXCEPT
(See instructions below)
INSTRUCTION: To withhold authority to vote for any individual nominee(s),
------------ mark "FOR ALL EXCEPT" and fill in the circle next to each
nominee you wish to withhold, as shown here: (X)
2A. To elect Eli Akavia as an outside director.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2B. To elect Nurit Mor as an outside director.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To approve compensation for the Company's outside directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To amend the Company's 2003 Stock Option Plan to provide for the
issuance thereunder of an additional 1,500,000 ordinary shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To increase the Company's authorized ordinary share capital.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. To amend the Company's Articles of Association to add Article 46(c),
according to which the Company will not be required to distribute
copies of its annual audited financial statements to its shareholders.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
7. To authorize Mr. Herzle Bodinger, the Company's Chairman of the Board
of Directors, to serve concurrently as the Company's Chief Executive
Officer.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
8. To ratify the reappointment of Kost Forer Gabbay & Kasierer,
independent certified public accountants in Israel, a member firm of
Ernst & Young Global, as our independent registered public accountants
for the year ending December 31, 2006 and to authorize our Board of
Directors to determine their compensation based on the recommendation
of our Audit Committee.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via
this method. [ ]
Signature of Shareholder _______ Date _____
Signature of Shareholder _______ Date _____
Note: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
SIGNATURES
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.
Rada Electronic Industries Ltd.
(Registrant)
By: /s/Herzle Bodinger
------------------
Herzle Bodinger, Chairman
Date: July 12, 2006