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
APRIL 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 Extraordinary General
Meeting to be held May 21, 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 EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
RADA Electronic Industries Ltd. Shareholders:
We cordially invite you to an Extraordinary General Meeting of Shareholders
to be held at 10 a.m.(Israel time) on Wednesday, May 21, 2008 at our offices at
7 Giborei Israel Street, Netanya, Israel, for the following purposes:
(1) To approve a loan agreement by and between us and Mr. Howard P.L.
Yeung, our controlling shareholder or an entity owned by Mr. Yeung;
(2) To approve a joint venture between us and Mr. Howard P.L. Yeung, our
controlling shareholder, or an entity owned by Mr. Yeung, for the
commercialization of certain of our technologies for
non-military/commercial use; and
(3) To approve the grant of options to four of our directors to purchase
an aggregate 261,000 ordinary shares.
The Board of Directors recommends that you vote in favor of all of the
proposals, which are described in the attached Proxy Statement.
Shareholders of record at the close of business on April 11, 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 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
April 15, 2008
RADA ELECTRONIC INDUSTRIES LTD.
7 Giborei Israel Street
Netanya 42504, Israel
---------------------
PROXY STATEMENT
EXTRAORDINARY 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 Extraordinary General Meeting of Shareholders, or the
Meeting, and at any adjournment thereof, pursuant to the accompanying Notice of
Extraordinary General Meeting of Shareholders. The Meeting will be held at 10:00
a.m. (Israel time) on Wednesday, May 21, 2008 at our offices at 7 Giborei Israel
Street, Netanya, Israel.
This Proxy Statement, the attached Notice of Extraordinary General Meeting
and the enclosed proxy card, are being mailed to shareholders on or about April
16, 2008.
PURPOSE OF THE ANNUAL GENERAL MEETING
At the Meeting, shareholders will be asked to consider and vote upon the
following matters: (i) the approval of a loan agreement by and between us and
Mr. Howard P.L. Yeung, our controlling shareholder, or an entity owned by Mr.
Yeung; (ii) the approval of a joint venture between us and Mr. Howard P.L.
Yeung, our controlling shareholder, or an entity owned by Mr. Yeung, for the
commercialization of certain of our technologies for non-military/commercial
use; and (iii) the approval of the grant of options to four of our directors to
purchase an aggregate 261,000 ordinary shares.
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 April 11, 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 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 April 11, 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 each of the
proposals, except as otherwise stated in the proposal. If within half an hour of
the scheduled time for the Meeting a quorum is not present, the Meeting will be
adjourned to the same day in the following week at the same time and place. If
within half an hour of the scheduled time for the adjourned meeting a quorum is
not present, two shareholders present in person or by proxy will constitute a
quorum.
SECURITIES OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 11, 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 Outstanding
Name of Beneficial Owner Beneficially Owned (1) Ordinary Shares (2)
------------------------ --------- ---------
Howard P.L. Yeung (3)(4) ... 7,061,872 59.5%
Herzle Bodinger (5) ........ 155,556 1.7%
Zvi Alon (6) ............... 83,333 *
Adrian Berg (7) ............ 85,533 1%
Roy Kui Chuen Chan (8) ..... 58,867 *
Ben Zion Gruber (9) ........ 50,681 *
Dov Sela (10) .............. 83,333 *
Shiri Lazarovich (11) ...... 15,334 *
Yuval Dan-Gur (12) ......... 33,334 *
Oleg Kiperman (13) ......... 51,000 *
Michael Letchinger ......... - -
Nurit Mor .................. - -
Eli Akavia ................. - -
All directors and
officers as a group
(12 persons) (14) .......... 616,970 7.0%
2
* 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 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. The percentages shown are based on 8,858,553 ordinary shares issued and
outstanding as of April 11, 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.
Mr. Howard P.L. Yeung and his brother Mr. 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 currently
convertible notes and 1,578,947 ordinary shares issuable upon the exercise
of currently exercisable warrants at an exercise price of $2.375 per share.
5. All such ordinary shares are subject to currently exercisable options
granted under our 2003 Israeli Share Option Plan. Of such options, options
to purchase 100,0000 ordinary shares are exercisable at an exercise price
of $4.02 per share and options to purchase 55,556 ordinary shares are
exercisable at an exercise price of $2.91 per share. All such options
expire in January 2013.
6. All such ordinary shares are subject to currently exercisable options
granted under our 2003 Israeli Share Option Plan. Of such options, options
to purchase 33,333 ordinary shares are exercisable at an exercise price of
$2.07 per share and options to purchase 50,000 ordinary shares are
exercisable at an exercise price of $2.40 per share. All such options
expire in January 2013.
7. Includes 84,000 ordinary shares subject to currently exercisable options at
an exercise price of $4.02 per share granted under our 2003 Israeli Share
Option Plan. The options expire in January 2013.
8. Includes 57,333 ordinary shares subject to currently exercisable options at
an exercise price of $4.02 per share granted under our 2003 Israeli Share
Option Plan. The options expire in January 2013.
9. Includes 34,014 ordinary shares issuable under a currently exercisable
warrant at an exercise price of $1.88 per share that was issued in June
2007 and expires in December 2009, and 16,667 ordinary shares subject to
currently exercisable options at an exercise price of $4.02 per share
granted under our 2003 Israeli Share Option Plan. Such options expire in
January 2013.
10. All such ordinary shares are subject to currently exercisable options
granted under our 2003 Israeli Share Option Plan. Of such options, options
to purchase 33,333 ordinary shares are exercisable at an exercise price of
$2.07 per share and options to purchase 50,000 ordinary shares are
exercisable at an exercise price of $2.40 per share. All such options
expire in January 2013.
11. All such ordinary shares are subject to currently exercisable options
granted under our 1999 Stock Option Plan and 2003 Israeli Share Option
Plan. Of such options, options to purchase 5,334 ordinary shares are
exercisable at an exercise price of $3.42 per share and options to purchase
10,000 ordinary shares are exercisable at an exercise price of $2.40 per
share. Of such options, options to purchase 12,667 ordinary shares expire
in January 2013 and options to purchase 2,667 ordinary shares expire in
December 2009.
12. All such ordinary shares are subject to currently exercisable options
granted under our 1999 Stock Option Plan and 2003 Israeli Share Option
Plan. Of such options, options to purchase 13,334 ordinary shares are
exercisable at an exercise price of $3.42 per share and options to purchase
120,000 ordinary shares are exercisable at an exercise price of $2.40 per
share. Of such options, options to purchase 26,667 ordinary shares expire
in January 2013 and options to purchase 6,667 ordinary shares expire in
December 2009.
13. All such ordinary shares are subject to currently exercisable options
granted under our 1999 Stock Option Plan and 2003 Israeli Share Option
Plan. Of such options, options to purchase 6,000 ordinary shares are
exercisable at an exercise price of $9.85 per share, options to purchase
25,000 ordinary shares are exercisable at an exercise price of $2.07 per
share and options to purchase 20,000 ordinary shares are exercisable at an
exercise price of $2.40 per share. Of such options, options to purchase
45,000 ordinary shares expire in January 2013 and options to purchase 6,000
ordinary shares expire in December 2009.
3
I. APPROVAL OF A LOAN AGREEMENT WITH MR. HOWARD P.L. YEUNG, OUR CONTROLLING
SHAREHOLDER, OR AN ENTITY OWNED BY HIM
(Item 1 on the Proxy Card)
Under the Israeli Companies Law, the terms of an extraordinary transaction
with a controlling shareholder must be approved by the audit committee, board of
directors and the general meeting of shareholders.
In order to facilitate the further development of our capabilities relating
to our inertial navigation systems technology, or the INS Technology, we have
requested Mr. Yeung, our controlling shareholder, or a company owned by him to
provide us with funding of up to US$1,500,000, or the Loan Facility. For the
purpose of this Item 1, the "Lender" refers to Mr. Yeung or a company owned by
him, as applicable, and the "Loan Transaction" refers to the transaction under
which the Lender will make the Loan Facility available to us. The funding under
the Loan Transaction will provide us with the necessary cash flow to finance the
further research and development of the INS Technology, including for the
purchase of the necessary equipment.
The terms of the proposed Loan Transaction are as follows:
o The Loan Facility will be available to us for drawdown in two
installments as follows: (i) US$1,000,000 will be provided immediately
(without notice) upon the approval of the Loan Transaction by our
shareholders to be obtained at the Meeting, and (ii) an additional
amount of up to $500,000 will be provided within seven business days
of our written request, which may be submitted not earlier than six
months following the date of the Meeting and not later than nine
months following the date of the Meeting. For the description in this
Item 1 below, "Principal Amount" refers to such amount of the Loan
Facility actually provided to us by the Lender.
o Interest at the rate of six months LIBOR+3% per annum will accrue on
the outstanding Principal Amount. Interest will be paid in quarterly
installments, in arrears on the first business day of each calendar
quarter.
o The Principal Amount will be repaid as follows: six consecutive
quarterly payments of US$15,000 each will be paid commencing July 1,
2009, and the balance of the Principal Amount will be paid in eight
equal quarterly installments commencing as of April 1, 2011.
o All or any part of the outstanding Principal Amount and accrued
interest may be prepaid by us at any time without payment of any fees
or fines. We will pay any excess cash we may have on account of the
early repayment of the outstanding Principal Amount and accrued
interest, in accordance with a formula that will be agreed between the
parties. The excess cash will be determined on a periodic basis
pursuant to a formula that will be agreed between us and the Lender.
It is proposed that our audit committee and board of directors will be
authorized to determine and approve the formula for determining the
existence of excess cash flow.
o The repayment of the Principal Amount and all accrued interest when
due will be secured by the following: (i) subject to the consent of
those banks that have a first priority lien and security interests in
our now owned or hereafter acquired assets at the time the Loan
Transaction is entered into, a second priority lien and security
interest in all of our assets, ranking after the existing first
priority lien in favor of our banks; and (ii) subject to the approval
of those banks that have, at the time the Loan Transaction is entered
into, a first priority lien and security interests in our now owned or
hereafter acquired assets, a second priority lien and security
interest in our shares of the joint venture company that we intend to
establish with the Lender for the commercialization of certain of or
our technologies for non-military/commercial use (see Item 2 below).
o Subject to the approval of the Israeli Ministry of Defense, or the
IMOD, the Lender will be granted a non-exclusive license (including
the right to sublicense and transfer the license) to use the INS
Technology for non-military/commercial purposes. The non-exclusive
license will automatically convert to an exclusive license should we
default on any of our obligations under the Loan Transaction. We
agreed to use our good faith best efforts to obtain the IMOD approval
and any other approvals, including export licenses, required for the
foregoing.
4
The Lender is not obliged to make the Loan Facility available to us and
enter into the Loan Transaction if the proposed joint venture between us and the
Lender presented to the shareholders for approval under Item 2 below is not
approved by the shareholders at the Meeting.
Our Audit Committee and Board of Directors believe that the Loan
Transaction is in the best interests of our company and our shareholders.
Accordingly, our Audit Committee and Board of Directors recommend that the
shareholders vote in favor of the proposal.
It is therefore proposed that at the Meeting the shareholders adopt the
following resolution:
RESOLVED, that the loan transaction by and between the Company and Mr.
Howard P.L. Yeung, our controlling shareholder, or an entity owned by him,
for a loan facility in the principal amount of up to US$1,500,000, in
accordance with the terms and conditions set forth in the proxy statement
for the extraordinary general meeting of shareholders, be and hereby is
approved.
Pursuant to the Israeli Companies Law, 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, is required to approve the foregoing
resolutions, provided that either (i) the shares voting in favor of such
resolutions (excluding the vote of abstaining shareholders) include at least
one-third of the non-interested shareholders with respect to such proposal
represented and voting on the matter, or (ii) the total shareholdings of the
non-interested shareholders with respect to such proposal who vote against the
resolutions (excluding the vote of abstaining shareholders) must not represent
more than 1% of the voting rights in our company. Under the Israeli Companies
Law, a "personal interest" (i) includes the personal interest of a relative of
the shareholder (including spouse thereof); (ii) includes the personal interest
of a corporation in which the shareholder or relative (including spouse thereof)
serves as a director or the chief executive officer, owns at least 5% of the
shares, or has the right to appoint a director or the chief executive officer;
and (iii) excludes an interest arising solely from the ownership of the
company's ordinary shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE FOREGOING
RESOLUTION.
II. APPROVAL OF A JOINT VENTURE WITH MR. HOWARD P.L. YEUNG, OUR CONTROLLING
SHAREHOLDER, OR AN ENTITY OWNED BY HIM, FOR THE COMMERCIALIZATION OF
CERTAIN OF OUR TECHNOLOGIES FOR NON-MILITARY/COMMERCIAL USE
(Item 2 on the Proxy Card)
Under the Israeli Companies Law, the terms of an extraordinary transaction
with a controlling shareholder must be approved by the audit committee, board of
directors and the general meeting of shareholders.
It is proposed that we and Mr. Yeung, our controlling shareholder, or an
entity owned by him establish a joint venture under which we will combine
certain of our respective resources to identify, develop and commercialize
products for non-military/commercial use, utilizing our technology and know-how
that might be derived from our technology base and financial support from Mr.
Yeung or an entity owned by him. Initially, the joint venture will focus on the
development and commercialization of our INS Technology for
non-military/commercial use. Subject to the mutual agreement of both parties and
the receipt of all applicable consents and approvals, including the approval of
our audit committee, board of directors and, to the extent necessary, the
approval of our shareholders, the joint venture may in the future focus on the
commercialization of other technologies for non-military/commercial use. We
believe that such joint venture will increase our non-military/commercial
revenues and will also generate returns for Mr. Yeung.
5
The structure of the proposed joint venture is as follows:
o We will establish a special purpose vehicle, or SPV, for the joint
venture, in the form of a limited liability company as soon as
practicable following the receipt of shareholder approval. The SPV
would be equally owned by us and Mr. Yeung or an entity owned by Mr.
Yeung. The foreign jurisdiction of the SPV will be determined, among
other things, based on local tax laws that would be applicable to the
SPV and its shareholders. Based on business efficacy, we will
determine whether to use one SPV for the development of each
technology or establish additional SPVs.
o The SPV will develop products for non-military/commercial use either
directly or by subcontracting the research and development and
manufacturing to us on commercial terms or by subcontracting such work
to third parties or by licensing third parties.
o Due to the nature of our business, the sale of products classified as
for military and non-military use, such as products incorporating INS
Technology, and the export of certain of our products and know-how is
subject to approval by the IMOD, and the IMOD's approval of the end
user of our products may also be required in certain circumstances. We
will use our good faith best efforts to obtain all necessary IMOD
approvals should any be required. Similarly, we will use our good
faith best efforts to obtain any other third party approvals,
including export licenses, and corporate approvals required to effect
the actions described in this Item 2, pursuant to applicable law.
o All specific commercial arrangements between us, the SPV and Mr. Yeung
or the entity owned by him (including agreements between the SPV and
Mr. Yeung or any company owned by him) will be made at arms length. As
long as Mr. Yeung is our controlling shareholder, such commercial
arrangements will be subject to the prior approval of our Audit
Committee, Board of Directors and shareholders, pursuant to the
provisions of the Israeli Companies Law. We will use our good faith
best efforts to obtain any corporate approvals required to effect the
commercial arrangements pursuant to applicable law.
o We will contribute non-military products and know-how related to the
INS Technology by the grant to Mr. Yeung or an entity owned by him of
a non-exclusive license to use such products and know-how for
non-military/commercial use. In the event that we default on any of
our obligations under the loan to be provided to us by Mr. Yeung or an
entity owned by him, as proposed under Item 1 above, the non-exclusive
license will convert to an exclusive license. The license will include
the right to sublicense and transfer the non-exclusive license to the
SPV. Mr. Yeung or the entity owned by him will sublicense to the SPV
the non-exclusive license granted by us for non-military
use/commercial use of the INS Technology, and such sublicense will be
subject to termination in the event that we default on any of our
obligations under the loan agreement to be entered into with the Mr.
Yeung or an entity owned by him, as described in Item 1 above Upon
repayment in full of the loan to be provided to us by Mr. Yeung or the
entity owned by him (see Item 1 above), Mr. Yeung or the entity owned
by him will transfer the non-exclusive license to the SPV, unless
otherwise agreed between the parties.
o We will receive royalty payments on revenues from sales of the SPV's
products and services. In addition, we will receive payment for any
services that we may provide to the SPV, including any product
engineering services. Any products developed for the SPV will be owned
solely by the SPV. Mr. Yeung or the entity owned by him will receive a
fee for managing and marketing the SPV, as well as any other services
they may provide to the SPV, as will be agreed between the parties.
o The SPV will be entitled to grant non-exclusive licenses for the
non-military/commercial use of the INS Technology to third parties,
some of which may be affiliated to and/or funded by Mr. Yeung.
Financial recognition may be provided to either of the parties, as
applicable, for the introduction of a licensee, as will be agreed
between the parties on a case by case basis.
6
o The SPV will strive to pay to its shareholders dividends or other tax
efficient payments to the extent commercially prudent.
Our Audit Committee and Board of Directors believe that the joint venture
is in the best interests of our company and our shareholders. Accordingly, our
Audit Committee and Board of Directors recommend that the shareholders vote in
favor of the proposal.
It is therefore proposed that at the Meeting the shareholders adopt the
following resolution:
RESOLVED, to approve the establishment of a joint venture with Mr. Yeung or
an entity owned by him in the manner and in accordance with the terms and
conditions set forth in the proxy statement for the extraordinary general
meeting of shareholders, and to authorize the Company's Audit Committee and
Board of Directors to determine and approve all commercial arrangements
between the Company, Mr. Yeung or an entity owned by him and the special
purpose vehicle established for the joint venture and other transactions in
which Mr. Yeung may be deemed to have personal interest under the Israeli
Companies Law in connection with such special purpose vehicle, provided all
such arrangements, agreements and transactions are on market terms and are
entered into prior to June 30, 2010.
Pursuant to the Israeli Companies Law, 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, is required to approve the foregoing
resolution, provided that either (i) the shares voting in favor of such
resolution (excluding the vote of abstaining shareholders) include at least
one-third of the non-interested shareholders with respect to such proposal
represented and voting on the matter, or (ii) the total shareholdings of the
non-interested shareholders with respect to such proposal who vote against the
resolution (excluding the vote of abstaining shareholders) must not represent
more than 1% of the voting rights in our company. Under the Israeli Companies
Law, a "personal interest" (i) includes the personal interest of a relative of
the shareholder (including spouse thereof); (ii) includes the personal interest
of a corporation in which the shareholder or relative (including spouse thereof)
serves as a director or the chief executive officer, owns at least 5% of the
shares, or has the right to appoint a director or the chief executive officer;
and (iii) excludes an interest arising solely from the ownership of the
company's ordinary shares
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE FOREGOING
RESOLUTION.
III. APPROVAL OF GRANT OF OPTIONS TO FOUR OF OUR DIRECTORS
TO PURCHASE AN AGGREGATE 261,000 ORDINARY SHARES
(Item 3 on the Proxy Card)
Our directors (other than our outside directors within the meaning of
Israeli law) do not receive any fees for, and we do not reimburse them for
expenses they incur in connection with, their services as members of our Board
of Directors. In consideration for their valuable contributions to our company
and to provide them with an incentive to continue to contribute to the
development and promotion of our business, on March 9, 2004 our shareholders
approved the grant of options to purchase a total of 258,000 ordinary shares to
four of our directors Messrs. Adrian Berg, Roy Chan, Ben-Zion Gruber and Herzle
Bodinger. All such options were granted under our 2003 Israeli Share Option Plan
and are now fully vested. The exercise price of the options is $4.02 per share,
which, except for limited periods of time, exceeded the market price of our
ordinary shares and the directors have not exercised any of the options to date.
In order to enhance the incentive of such four directors to continue to
serve on our Board of Directors and to continue to contribute to our business,
our Audit Committee and Board of Directors have approved, with the agreement of
the four directors, that all of the foregoing options will be canceled and,
subject to shareholder approval, to grant to such four directors new options to
purchase a total of 261,000 ordinary shares, under our 2003 Israeli Share Option
Plan. Of such options, options to purchase 85,000 ordinary shares will be
granted to Mr. Adrian Berg, options to purchase 58,000 ordinary shares will be
granted to Mr. Roy Chan, options to purchase 18,000 ordinary shares will be
granted to Mr. Ben-Zion Gruber and options to purchase 100,000 ordinary shares
will be granted to Mr. Herzle Bodinger. The exercise price of the options will
be the higher of: (i) the closing price of our ordinary shares on the NASDAQ
Capital Market on the date of the Meeting; or (ii) the average close price of
our ordinary shares on the NASDAQ Capital Market during the last 30 trading days
immediately prior to the Meeting. All of the options will expire on January 26,
2013 and will vest as follows: 25% of the options will vest on January 1, 2009,
an additional 40% will vest in four equal installments of 10% each on the last
date of each calendar quarter commencing on March 31, 2009, and the remaining
35% will vest in two equal installments of 17.5% each on March 31, 2010 and June
30, 2010 respectively.
7
The Israeli Companies Law requires that the terms of compensation
(including option grants) of directors be approved by the audit committee, board
of directors and shareholders.
It is therefore proposed that at the Meeting the shareholders will adopt
the following resolution:
RESOLVED, that the grant of options to our directors Messrs. Adrian Berg,
Roy Chan, Ben-Zion Gruber and Herzle Bodinger to purchase an aggregate
261,000 ordinary shares in such amounts and in accordance with the terms
and conditions set forth in the proxy statement for the extraordinary
general meeting of shareholders, be and is hereby approved.
Under the Companies Law 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 APPROVAL OF THE FOREGOING
RESOLUTION.
By Order of the Board of Directors,
Herzle Bodinger,
President and Chairman of the Board of Directors
Dated: April 15, 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
Extraordinary General Meeting of Shareholders of the Company to be held on
Wednesday, May 21, 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 Extraordinary 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 PROPOSALS SET FORTH ON THE REVERSE.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS OF
RADA ELECTRONIC INDUSTRIES LIMITED
MAY 21, 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" 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]
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1. To approve a loan agreement by and between the Company and Mr. Howard P.L.
Yeung, the Company's controlling shareholder or an entity owned by Mr.
Yeung
[_] FOR [_] AGAINST [_] ABSTAIN
2. To approve a joint venture between the Company and Mr. Howard P.L. Yeung,
the Company's controlling shareholder, or an entity owned by Mr. Yeung, for
the commercialization of certain of the Company's technologies for
non-military/commercial use.
[_] FOR [_] AGAINST [_] ABSTAIN
3. To approve the grant of options to four of the Company's directors to
purchase an aggregate 261,000 ordinary shares.
[_] 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
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Herzle Bodinger
President and Chairman
Date: April 16, 2008