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
October 2008
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,
333-127491 and 333-150197 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 October 27, 2008.
2. Form of RADA Electronic Industries Ltd. Proxy Card.
ITEM 1
RADA ELECTRONIC INDUSTRIES LTD.
7 Giborei Israel Street,
Netanya 42504, Israel
--------------------------
NOTICE OF 2008 ANNUAL GENERAL MEETING OF SHAREHOLDERS
RADA Electronic Industries Ltd. Shareholders:
We cordially invite you to the 2008 Annual General Meeting of Shareholders
to be held at 10 a.m. on Monday, October 27, 2008 at our offices at 7 Giborei
Israel Street, Netanya, Israel, for the following purposes:
(1) To elect one Class C director for a term expiring in 2011;
(2) To ratify and approve the reappointment of Kost Forer Gabbay & Kasierer, a
member firm of Ernst & Young Global, as our independent registered public
accountants for the year ending December 31, 2008 and to authorize our
Board of Directors to determine their compensation based on the
recommendation of our Audit Committee; and
(3) To review and discuss our auditor's report and consolidated financial
statements for the year ended December 31, 2007.
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 September 17, 2008 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,
Herzle Bodinger,
Chairman of the Board of Directors
Netanya, Israel
September 18, 2008
RADA ELECTRONIC INDUSTRIES LTD.
7 Giborei Israel Street,
Netanya 42504, Israel
--------------------------
PROXY STATEMENT
2008 ANNUAL GENERAL MEETING OF SHAREHOLDERS
This proxy 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 2008 Annual General Meeting of Shareholders, or the
Meeting, and at any adjournment thereof, pursuant to the accompanying Notice of
2008 Annual General Meeting of Shareholders. The Meeting will be held on Monday
October 27, 2008 at our offices at 7 Giborei Israel Street, Netanya, Israel.
This Proxy Statement, the attached Notice of 2008 Annual General Meeting
and the enclosed proxy card, as well as our audited financial statements for the
year ended December 31, 2007, are being mailed to shareholders on or about
September 22, 2008.
Purpose of the Annual General Meeting
At the Meeting the shareholders will be asked to consider and vote upon the
following matters: (i) election of one Class C director for a term expiring in
2011; and (ii) ratification and approval of the reappointment of Kost Forer of
Ernst & Young Global, as our independent registered public accountants for the
year ending December 31, 2007 and to authorize our Board of Directors to
determine their compensation based on the recommendation of our Audit Committee.
In addition our auditor's report and consolidated financial statements for the
year ended December 31, 2007 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 0.015 per
share, as of the close of business on September 17, 2008, 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 nominee 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 September 17, 2008, the record date for determination of shareholders
entitled to vote at the Meeting, there were outstanding 8,858,553 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 a proposal,
except as otherwise stated in the proposal.
Securities Ownership by Certain Beneficial Owners and Management
The following table sets forth certain information as of September 17, 2008
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 Ordinary Shares Percentage of
Name Beneficially Owned (1) Ownership(2)
---- ---------------------- ------------
Howard P.L. Yeung (3) (4) 7,061,872 59.5%
Kenneth Yeung (3) 450,029 5.1%
Herzle Bodinger (5) 183,333 2.0%
Zvi Alon (6) 100,000 1.1%
Shiri Lazarovich (7) 18,666 *
Dov Sella (6) 100,000 1.1%
Yuval Dan-Gur (8) 40,000 *
Oleg Kiperman (9) 57,667 *
Adrian Berg (10) 85,533 1.0%
Roy Kui Chuen Chan (11) 58,867 *
Ben Zion Gruber (12) 50,681 *
Michael Letchinger -- --
Nurit Mor -- --
Eli Akavia -- --
All directors and executive officers
as a group (12 persons) 694,747 7.8%
--------------------
* 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. Ordinary shares relating to
options and warrants currently exercisable or exercisable within 60 days of
the date of this table are deemed outstanding for computing the percentage
of the person holding such 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 above have sole voting and investment power with
respect to all shares shown as beneficially owned by them.
(2) The percentages shown are based on 8,858,553 ordinary shares issued and
outstanding as of September 17, 2008.
(3) Of the 7,061,872 ordinary shares, 450,029 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 1,435,407 ordinary shares issuable upon conversion of convertible
notes and 1,578,947 ordinary shares issuable upon the exercise of currently
exercisable warrants.
(5) All such ordinary shares are subject to currently exercisable options
granted under our 2003 stock option plan. 100,000 options have an exercise
price of $4.02 per share and 83,333options have an exercise price of $2.91
per share. The options expire in January 2013.
2
(6) All such ordinary shares are subject to currently exercisable options
granted under our 2003 stock option plan. 33,333 options have an exercise
price of $2.07 per share and 66,667 options have an exercise price of $2.40
per share. The options expire in January 2013.
(7) All such ordinary shares are subject to currently exercisable options
granted under our 1999 and 2003 stock option plans. 5,333 options have an
exercise price of $3.42 per share and 13,333 options have an exercise price
of $2.40 per share. 16,000 options expire in January 2013 and 2,666 options
expire in December 2009.
(8) All such ordinary shares are subject to currently exercisable options
granted under our 1999 and 2003 stock option plans. 13,333 options have an
exercise price of $3.42 per share and 26,667 options have an exercise price
of $2.40 per share. 33,333 options expire in January 2013 and 6,667 options
expire in December 2009.
(9) All such ordinary shares are subject to currently exercisable options
granted under our 1999 and 2003 stock option plans. 6,000 options have an
exercise price of $9.85 per share, 25,000 options have an exercise price of
$2.07 per share and 26,677 options have an exercise price of $2.40 per
share. 51,677 options expire in January 2013 and 6,000 options expire in
December 2009.
(10) Includes 84,000 ordinary shares subject to currently exercisable options
granted under our 2003 stock option plan at an exercise price of $4.02 per
share. The options expire in January 2013.
(11) Includes 57,333 ordinary shares subject to currently exercisable options
granted under our 2003 stock option plan at an exercise price of $4.02 per
share. The options expire in January 2013.
(12) Includes 34,014 ordinary shares issuable upon currently exercisable
warrants at an exercise price of $1.88 per share that were issued in June
2007, and 16,667 ordinary shares subject to currently exercisable options
granted under our stock option plans, at an exercise price of $4.02 per
share. Such options expire in January 2013.
I. ELECTION OF DIRECTORS
(Item 1 on the Proxy Card)
Pursuant to our articles of association, our Board of Directors may consist
of no less than two and no more than eleven members, and is divided into three
classes (other than outside directors), Class A, Class B and Class C. Generally,
at each annual meeting of shareholders one class of directors is elected for a
term of three years. At present we have two Class A directors, two Class B
directors and one Class C director. All the members of our Board of Directors,
except the outside directors, may be reelected upon completion of their term of
office. In addition, companies incorporated under the laws of Israel whose
shares have been offered to the public inside or outside of Israel, such as our
company, are required by the Israeli Companies Law, 5759-1999, or the Israeli
Companies Law, to appoint at least two outside directors, within the meaning of
the Israeli Companies Law. In general, outside directors serve for three-year
terms, which may be renewed for only one additional three-year term. However,
Israeli companies listed on certain stock exchanges outside of Israel, including
the NASDAQ Global Market, may appoint an outside director for additional terms
of not more than three years subject to certain conditions. Such conditions
include the determination by the audit committee and board of directors, that in
view of the director's professional expertise and special contribution to the
company's board of directors and its committees, the appointment of the outside
director for an additional term is in the best interest of the company. Ms.
Nurit Mor and Mr. Eli Akavia were each elected by our shareholders to serve as
our outside directors pursuant to the provisions of the Israeli Companies Law
for initial three-year terms until our 2009 annual general meeting of
shareholders.
Under 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 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, one of our outside directors and
an audit committee member, have the requisite "accounting and financial
expertise."
3
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 Mr. Adrian
Berg, to serve as Class C director, to hold office for additional three years
until the Annual General Meeting of Shareholders to be held in 2011.
Should the nominee be unavailable for election, the proxies will be voted
for a substitute nominee designated by our Board of Directors. The nominee is
expected to be available.
Set forth below is information about the nominee, including age,
position(s) held with our company, principal occupation, business history and
other directorships held.
Nominee for Election as Class C Director for a Term Expiring in 2011
Adrian Berg, 60, 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.
The Board of Directors recommends a vote FOR the election of the nominee
for director named above.
Directors Continuing in Office
Ben Zion Gruber, 49, was elected as a director designee of the shareholders
(excluding Howard Yeung) that participated in the private placement of our
shares in June 2002. Mr. Gruber is founder and manager of several real estate
and construction companies and an entrepreneur involved in several hi-tech
companies. Mr. Gruber is a Colonel (Res) of the Israeli Defense Forces serving
as Brigadier Commander of a 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
PhD 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. He also serves on the boards of
directors of the Company for Development of Efrat Ltd., and the Association of
Friends of "Kefar Shaul" Hospital. Mr. Gruber serves on the Ethics Committees of
the Eitanim and Kefar Shaul Hospitals as well as a director of several other
charitable organizations. Mr. Gruber is a Class A director whose term will
expire in 2009.
4
Roy Kui Chuen Chan, 61, 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 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. Mr. Chan is a Class A director whose term will
expire in 2009.
Michael Letchinger, 52, was elected as a director designee of Horsham
Enterprises Ltd. in November 2004. 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, Waltham, Massachusetts, and a J.D. degree from
University of Chicago Law School. Mr. Letchinger is a Class B director whose
term will expire in 2010.
Herzle Bodinger, 65, has served as our chairman of the Board of Directors
since July 1998, and since 2001 has served as our president as well. General
(Res.) Bodinger first joined us in May 1997 as the president of our U.S.
subsidiary, Rada Electronic Industries Inc., and was appointed our chief
executive officer in June 1998. He served as our chief executive officer from
1998 until 2001 and resumed this position from June 2006 until July 2007.
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 2010.
Eli Akavia, 60, has served as an outside director since August 2006. Mr.
Akavia has since August 2002 served as an independent consultant in accounting
and audit issues. From 1979 to 2002, Mr. Akavia served as a partner in various
positions in the accounting firm of Luboshitz Kasierer, which was merged into
Kost Forer Gabbay & Kasierer, which is currently a member firm of Ernst & Young
Global, Mr. Akavia serves as a director of Eden Springs Ltd., On Track
Innovation Ltd, Starling Ltd, Eshld Ltd and Direct Funds Ltd., all of which are
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. Mr. Akavia will serve as outside director until 2009.
Nurit Mor, 64, has served as an outside director since August 2006. Ms. Mor
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 Israeli public companies. From 1973 to 2003, Ms. Mor
served in senior positions in the Bank of Israel, including in the public
complaints and customer relations department. Ms. Mor holds a B.A. degree in
Economics and Statistics and a diploma in Business Administration from the
Hebrew University, Jerusalem, and an M.A degree in Labor Studies from the Tel
Aviv University. Ms. Mor will serve as an outside director until 2009.
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
5
accountants' qualifications and independence, the performance of our internal
audit 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, all 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 Nurit Mor, Eli Akavia and
Ben Zion Gruber. Ms. Mor and Mr. Akavia qualify both as independent directors
under the NASDAQ Stock Market and Securities and Exchange Commission
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. Akavia meets the definition of an audit committee
financial expert, as defined in Item 401(h) of Regulation S-K.
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, 2007 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, 2007.
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, 2007.
Salaries, fees, Pension,
commissions and retirement and
bonuses similar benefits
---------------- ----------------
All directors and executive officers
as a group, consisting of 12 persons.... $730,516 $268,844
During the year ended December 31, 2007, we paid each of our outside
directors a per meeting attendance fee of NIS 1,000 (approximately $243) plus an
annual fee of NIS 18,000 (approximately $4,382).
As of December 31, 2007, our directors and executive officers as a group,
consisting of twelve persons, held options to purchase an aggregate of 626,666
ordinary shares, at exercise prices ranging from $2.07 to $4.02 per share,
vesting over three years. These options were issued under our 2003 Stock Option
Plan and expire in 2013. In 2007, 83,333 options having an exercise price of
$2.91 were granted under the 2003 Plan.
Stock Option Plans
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 108,400 of our ordinary shares.
The1999 Plan, authorizes the issuance of options to key employees and
consultants, including officers and directors of 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 1999 Plan. 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 1999 Plan, of the form of option.
Options
6
granted under the 1999 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
1999 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 1999 Plan also contains 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.
As of September17, 2008 options to purchase 165,400 ordinary shares were
granted at an average exercise price of $9.63 per share. Of such options 93,633
have been cancelled or forfeited. 71,767 options are outstanding and 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 666,667 of our ordinary shares. At the
Company's Annual General meeting held in August 2006, shareholder approved a
500,000 share increase in the number ordinary shares available for grant under
the plan. Consequently, 1,166,667 shares are subject to this plan. 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 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 which such
options were granted. If the shares are sold before the lapse of said 24 months
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 1999 Plan.
As of September 17, 2008 options to purchase 1,452,000 ordinary shares were
granted at an average exercise price of $2.79 per share. Of such options,
1,075,167 options are outstanding, 51,168 options have been exercised and
325,666 options were cancelled, expired or forfeited.. Options to purchase
743,333 ordinary shares are currently exercisable.
II. APPOINTMENT OF AUDITORS
(Item 2 on the Proxy Card)
Our Board of Directors appointed Kost Forer Gabbay & Kasierer, registered
public accountants, a Member of Ernst & Young Global, as our independent public
accountants in 1999 and has reappointed the firm as our independent public
accountants since such time.
At the Meeting, shareholders will be asked to ratify and approve the
re-appointment of Kost Forer Gabbay & Kasierer as our independent registered
public accountants for the fiscal year ending 2008, pursuant to the
recommendation of our Board of Directors. As a result of Kost Forer Gabbay &
Kasierer's familiarity with our
7
operations and reputation in the auditing field, our Audit Committee and Board
of Directors believe that the firm has the necessary personnel, professional
qualifications and independence to act as our independent registered public
accountants.
At the Meeting, shareholders will also be asked to authorize our Board of
Directors the authority to fix the compensation of our independent registered
public accountants, pursuant to the recommendation of our Audit Committee, in
accordance with the volume and nature of their services. With respect to fiscal
year 2007, we paid Kost Forer Gabbay & Kasierer approximately $70,000 for audit
services.
It is therefore proposed that at the Meeting the following resolution be
adopted:
"RESOLVED, that the appointment of Kost Forer Gabbay & Kasierer, a member
of Ernst & Young Global, as the independent registered public accountants
of RADA Electronic Industries Ltd., to conduct the annual audit of its
financial statements for the year ending December 31, 2008, be and hereby
is ratified and approved, and that the Board of Directors be, and it hereby
is, authorized to fix the remuneration of such independent registered
public accountants, pursuant to the recommendation of our Audit Committee,
in accordance with the volume and nature of their services."
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
thereon, will be necessary for shareholder approval of the foregoing resolution.
The Board of Directors recommends a vote FOR the foregoing resolution.
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 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.
III. REVIEW AND DISCUSSION OF OUR AUDITOR'S REPORT, DIRECTORS' REPORT,
AND THE CONSOLIDATED FINANCIAL STATEMENTS
At the Meeting, our auditor's report and the consolidated financial
statements for the year ended December 31, 2007 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.
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,
Herzle Bodinger,
President and Chairman of the Board of Directors
Dated: September 18, 2008
8
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 0.015 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 Wednesday, October
27, 2008 at 10:00 a.m. (Israel time) 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 NOMINEE FOR CLASS C DIRECTOR AND
PROPOSAL 2 SET FORTH ON THE REVERSE.
(Continued and to be signed on the reverse side)
ANNUAL GENERAL MEETING OF SHAREHOLDERS OF
RADA ELECTRONIC INDUSTRIES LIMITED
October 27, 2008
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.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
NOMINEE FOR CLASS C DIRECTOR AND PROPOSAL 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
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1. The election of one Class C director for a term expiring at the
Company's 2011 Annual General Meeting of Shareholders.
NOMINEE:
FOR AGAINST ABSTAIN
ADRIAN BERG [ ] [ ] [ ]
2. To ratify the reappointment of Kost Forer Gabbay & Kasierer,
independent certified public accountants in Israel, a member firm of
Ernst & Young Global, as the Company's independent registered public
accountants for the year ending December 31, 2008 and to authorize its
Board of Directors to determine their compensation based on the
recommendation of the Company's 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.
SIGNATURE
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
President and Chairman
Date: October 2, 2008