Filed
by the Registrant
|
x | ||
Filed
by a Party other than the Registrant
|
o
|
||
Check
the appropriate box:
|
|||
x |
Preliminary
Proxy Statement
|
o
|
Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|
o
|
Definitive
Proxy Statement
|
||
o
|
Definitive
Additional Materials
|
||
o
|
Soliciting
Material under Rule 14a-12
|
(Exact
Name of Registrant as Specified in
Charter)
|
x |
No
fee required.
|
o
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
|
(1)
|
Title
of each class of securities to which transaction applies:
______________________
|
(2)
|
Aggregate
number of securities to which transaction applies:
_____________________
|
(3)
|
Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is
calculated and state how it was determined):
______________________________________________________
|
(4)
|
Proposed
maximum aggregate value of transaction:
_____________________________
|
(5)
|
Total
fee paid:
__________________________________________________________
|
o
|
Fee
paid previously with preliminary materials.
|
o
|
Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2) and identify the filing for which the offsetting fee
was paid
previously. Identify the previous filing by registration statement
number,
or the Form or Schedule and the date of its filing.
|
(1)
|
Amount
Previously Paid:
__________________________________________________
|
(2)
|
Form,
Schedule or Registration Statement No.
_________________________________
|
(3)
|
Filing
Party:
____________________________________________________________
|
(4)
|
Date
Filed:
_____________________________________________________________
|
Robert
S. Ehrlich
Chairman,
President and Chief Executive Officer
|
Arotech
Corporation
354
Industry Drive
Auburn, Alabama 36830 Tel: (334) 502-9001 Fax: (334) 502-3008 http://www.arotech.com Nasdaq
National Market: ARTX
|
***PRELIMINARY
COPY***
|
|
|
|
-
2
-
|
Sincerely,
|
|
Robert S. Ehrlich Chairman of the Board of Directors |
***PRELIMINARY
COPY***
|
|
354
Industry Drive
Auburn, Alabama 36830 |
1. | To consider and act upon a proposal to permit us to make scheduled principal payments on our outstanding senior secured convertible notes in stock as contemplated by the terms of the notes (beginning on page 2). | |
2. | To consider and act upon a proposal to permit us to adjust the exercise prices of certain of our outstanding warrants (beginning on page 4). | |
3. | To consider and act upon a proposal to ratify the appointment of Kost, Forer, Gabbay & Kasierer, independent certified public accountants in Israel and a member firm of Ernst & Young International, as our independent accountants for the fiscal year ending December 31, 2005 (beginning on page 5). | |
4. |
To
act upon all other business that may properly come before the meeting
or
any postponements or adjournments
thereof.
|
By
Order of the Board of Directors,
|
|
Yaakov
Har-Oz
Vice
President, General Counsel and Secretary
|
|
Auburn,
Alabama
November
9, 2005
|
|
***PRELIMINARY
COPY***
|
|
Q. | What proposals are stockholders being asked to consider at the upcoming special meeting? |
A. | We are seeking the approval of three proposals. |
The
first proposal relates to our ability, consistent with Nasdaq rules,
to
make scheduled principal payments on the outstanding senior secured
convertible notes issued in September 2005 in stock as contemplated
by the
terms of the notes. These payments, consisting of $1,458,333.33
due on
each of January 31, 2006, March 31, 2006, May 31, 2006, July 31,
2006,
September 30, 2006, November 30, 2006, May 31, 2007, July 31, 2007,
September 30, 2007, November 30, 2007, January 31, 2008 and March
31,
2008, can under the terms of our notes be made either in cash or
in stock
based on the value of the stock at the time of payment. Because
the market
value of our stock at the time of future payment may be less than
the
value of our stock on the date the notes were issued, Nasdaq rules
require
us to obtain stockholder approval in order to make such payments
in
stock.
|
|
The
second proposal would enable our management to adjust the exercise
price
of certain of our outstanding warrants. Because the adjusted exercise
price of the warrants might be lower than the market prices of
our stock
on the respective dates the warrants were issued, Nasdaq rules
require us
to obtain stockholder approval prior to any such
re-pricing.
|
|
Finally,
we are using the opportunity of this special meeting to solicit
stockholder ratification of our audit committee’s choice of Kost,
Forer, Gabbay & Kasierer,
independent certified public accountants in Israel and a member
firm of
Ernst
& Young International, as our independent accountants for the fiscal
year ending December 31, 2005.
|
|
Q. |
Why
is Arotech seeking stockholder approval for the first proposal?
|
A. | As a Nasdaq-listed company, we are subject to the Marketplace Rules of the National Association of Securities Dealers. NASD Marketplace Rule 4350(i)(1)(D)(ii) requires stockholder approval for the issuance or potential issuance of securities representing more than 20% of a listed company’s outstanding securities at a price below the greater of book value or market value. The terms of the senior secured convertible notes provide that we may make required periodic payments of principal either in cash or in stock. If we choose to make a payment in stock, the price used to determine the number of shares to be issued will be calculated using an 8% discount to the average trading price of our common stock during 17 of the 20 consecutive trading days ending two days before the payment date. Because payments of principal could involve issuing stock at a stock price below the market price of our stock at the time we issued our notes, we would be required to obtain stockholder approval prior to any such issuance. |
It
is important in this connection to note that we are not presently
in
violation of any NASD rules in connection with our issuance of
the senior
secured convertible notes.
|
|
Q. | Why is Arotech seeking stockholder approval for the second proposal? |
A. | We have a total of number 22,801,000 warrants outstanding, of which 20,800,963 have exercise prices above the market value of our stock as of October 24, 2005. From time to time, our management may wish to raise funds by adjusting the exercise price of certain of these warrants in order to induce their immediate exercise. However, to the extent that the adjusted price would be lower than the market price of our stock on the date the warrants were issued, such an adjustment could be in violation of NASD Marketplace Rule 4350(i)(1)(D)(ii) in the absence of stockholder approval to the adjustment. Accordingly, and in order to give management flexibility with respect to future financing needs, we are requesting stockholder approval to enable us to adjust the exercise price of certain of our outstanding warrants in the future should we determine it to be in our best interests to do so. |
***PRELIMINARY
COPY***
|
|
Q. | Why is Arotech seeking stockholder approval for the third proposal? |
A. | We did not solicit stockholder ratification of our choice of auditors at our annual meeting because at that point in time our audit committee had not yet made a decision regarding our auditors for the fiscal year ending December 31, 2005. Although stockholder ratification of the selection of Kost, Forer, Gabbay & Kasierer as our independent accountants is not required by our by-laws or otherwise, we are submitting the selection of Kost, Forer, Gabbay & Kasierer to the stockholders for ratification as a matter of good corporate practice. |
Q. | What does our Board recommend? |
A. | Our Board of Directors has determined that is in the best interests of Arotech and its stockholders to approve all three proposals. Accordingly, our Board of Directors unanimously recommends that you vote “FOR”the proposals. |
Q. | What vote is required to approve the proposals? |
A. | Holders of a majority of the outstanding shares entitled to vote must be present, in person or by proxy, at the special meeting in order to have the required quorum for the transaction of business. The affirmative vote of a majority of the total votes cast on each of the three proposals, in person or by proxy, is required to approve the proposal. On all matters to be voted upon at the special meeting, each holder of record of common stock will be entitled to one vote for each common share held as of October 24, 2005. As of the record date, October 24, 2005, there were 90,204,708 shares of our common stock outstanding and entitled to vote. |
Q. | What happens if the proposals are approved? |
A. | If the first proposal is approved by our stockholders at the special meeting, we will have the flexibility to make principal payments on our senior secured convertible notes in stock rather than in cash, thereby preserving our working capital. |
If the second proposal is approved by our stockholders at the special meeting, we will have the flexibility to adjust the exercise prices of certain of our warrants in order to induce immediate exercise and thereby provide us with additional cash should it be needed in the future, while also reducing the market overhang of such unexercised warrants. | |
***PRELIMINARY
COPY***
|
|
If
the third proposal is approved by our stockholders at the special
meeting,
our Audit Committee will consider this as one factor in any future
decisions on retaining Kost, Forer, Gabbay and Kasierer as our
independent
auditors, but may still in its discretion direct the appointment
of a
different independent accounting firm at any time during the
year if it is
determined
that such a change would be in the best interests of Arotech
and its
stockholders.
|
|
Q. | What happens if the proposals are not approved? |
A. | If the first proposal is not approved, we would be required to make all payments of principal on our senior secured convertible notes (a total of $17.5 million) in cash. Depending on our cash situation at the time, this could strain our limited cash resources and could require us to take actions that we would prefer not to take, such as selling assets (which in any event would require the consent of our lenders), in order to raise cash. In the absence of such flexibility, we might be left with no ability to avoid defaulting on our notes. Additionally, if this proposal is not approved we are obligated, under the terms of our agreements with our investors, to continue to submit the proposal to our stockholders at special meetings to be held every six months until it is approved, with all the expense that this would entail. |
If
the second proposal is not approved, we will be unable to adjust
the
exercise price of our outstanding warrants to induce immediate
exercise of
these warrants. This would not only remove a potential financing
source
that may be needed in the future, but would also leave these
warrants as
outstanding and acting as an undesirable overhang on our issued
stock.
|
|
If
the third proposal is not approved, the Audit Committee will
reconsider
whether or not to retain Kost, Forer, Gabbay & Kasierer. Even if the
selection is ratified, the Audit Committee in its discretion
may direct
the appointment of a different independent accounting firm at
any time
during the year if it is determined that such a change would
be in the
best interests of Arotech and its stockholders
|
|
Q. |
What
should I do now?
|
A. | You should read this proxy statement carefully and promptly submit your proxy card or vote by telephone or over the Internet as provided on the proxy card to ensure that your vote is counted at the special meeting. |
Q. | How do I vote if I hold shares directly? |
A. | You may vote your shares by attending the special meeting in person and completing a ballot or returning your validly executed proxy card at the meeting. The special meeting will begin promptly at 10:00 a.m. local time on Wednesday, December 14, 2005, at the offices of our subsidiary Electric Fuel Ltd., One HaSolela Street, Beit Shemesh, Israel. Attendance at the special meeting will not, by itself, result in the revocation of a previously submitted proxy. Even if you are planning to attend the special meeting, we encourage you to submit your proxy in advance to ensure the representation of your shares at the special meeting. |
If
you do not want to attend the special meeting and you hold your
shares
directly, you may vote by granting a proxy. To grant a proxy,
mail your
signed proxy card in the enclosed return envelope or vote by
telephone as
provided on the proxy card as soon as possible so that your shares
may be
represented at the special meeting.
|
|
Q. | How do I vote if I hold shares in street name? |
A. | If you do not want to attend the special meeting and hold your shares in a stock brokerage account or if your shares are held by a bank or nominee (i.e., in “street name”), you must provide your broker with directions on how to vote your shares. Your broker will provide you with instructions regarding how to direct your broker to vote your shares. It is important to follow these instructions carefully to ensure your shares are represented at the special meeting. If you do not provide directions to your broker, your shares will not be voted at the special meeting on the first two proposals. |
If
you want to attend the special meeting and hold your shares in
street
name, you must obtain a signed proxy card from your broker, bank
or other
nominee acting as record holder that gives you the right to vote
the
shares. Your broker will provide you with instructions regarding
how to
obtain a signed proxy card from the bank or other nominee acting
as record
holder in order to enable you to vote your shares in person at
the special
meeting.
|
|
Q. | What if I do not vote? |
A. | If you fail to respond, your shares will neither be voted nor count for purposes of obtaining a quorum. If you respond and abstain from voting, your shares will count for purposes of obtaining a quorum and will have the same effect as a vote against the proposals. If you respond by returning a properly executed proxy card without instructions, your shares will be voted “FOR”adoption of the proposals. |
Q. | How can I change my vote after I have mailed my proxy card? |
A. | If you are a holder of record, you may generally change your vote by delivering a later-dated proxy or written notice of revocation to our Corporate Secretary before the special meeting, or by attending the special meeting and voting in person. If your shares are held in “street name” by your broker, you must follow the instructions received from your broker regarding how to change your vote. |
***PRELIMINARY
COPY***
|
|
354
Industry Drive
Auburn, Alabama 36830 |
***PRELIMINARY
COPY***
|
|
***PRELIMINARY
COPY***
|
|
|
***PRELIMINARY
COPY***
|
|
***PRELIMINARY
COPY***
|
|
Ø |
Audit
Fees. Audit
fees billed or expected to be billed to us by Kost, Forer, Gabbay
&
Kassierer for the audit of the financial statements included in our
Annual
Report on Form 10-K, and reviews of the financial statements included
in
our Quarterly Reports on Form 10-Q, for the years ended December
31, 2003
and 2004 totaled approximately $177,000 and $594,924, respectively.
|
Ø |
Audit-Related
Fees.
Kost, Forer, Gabbay & Kassierer billed us $34,500 and $214,659 for the
fiscal years ended December 31, 2003 and 2004, respectively, for
assurance
and related services that are reasonably related to the performance
of the
audit or review of our financial statements and are not reported
under the
caption “Audit Fees,” above.
|
Ø |
Tax
Fees.
Kost, Forer, Gabbay & Kassierer billed us an aggregate of $24,320 and
$9,491 for the fiscal years ended December 31, 2003 and 2004,
respectively, for tax services, principally advice regarding the
preparation of income tax returns.
|
***PRELIMINARY
COPY***
|
|
Ø |
All
Other Fees. The
Audit Committee of the Board of Directors has considered whether
the
provision of the Audit-Related Fees, Tax Fees and all other fees
are
compatible with maintaining the independence of our principal accountant.
|
Name
and Address of Beneficial Owner(1)
|
Shares
Beneficially Owned(2)(3)
|
Percentage
of Total Shares
Outstanding(3)
|
|||||
Robert
S. Ehrlich
|
3,217,213
|
(4)
|
3.5
|
%
|
|||
Steven
Esses
|
1,035,140
|
(5)
|
|
1.1
|
%
|
||
Avihai
Shen
|
528,904
|
(6)
|
*
|
||||
Dr.
Jay M. Eastman
|
106,668
|
(7)
|
*
|
||||
Jack
E. Rosenfeld
|
108,668
|
(8)
|
*
|
||||
Lawrence
M. Miller
|
555,247
|
(9)
|
*
|
||||
Edward
J. Borey
|
56,001
|
(10)
|
*
|
||||
Seymour
Jones
|
0
|
|
*
|
||||
All
of our directors and executive officers as a group (8
persons)
|
5,607,841
|
(11)
|
5.9
|
%
|
*
|
Less
than one percent.
|
|
(1)
|
The
address of each named beneficial owner is in care of Arotech Corporation,
354 Industry Drive, Auburn, Alabama 36830.
|
|
(2)
|
Unless
otherwise indicated in these footnotes, each of the persons or
entities
named in the table has sole voting and sole investment power with
respect
to all shares shown as beneficially owned by that person, subject
to
applicable community property laws.
|
|
(3)
|
Based
on 90,204,708 shares of common stock outstanding as of October
24, 2005.
For purposes of determining beneficial ownership of our common
stock,
owners of options exercisable within sixty days are considered
to be the
beneficial owners of the shares of common stock for which such
securities
are exercisable. The percentage ownership of the outstanding common
stock
reported herein is based on the assumption (expressly required
by the
applicable rules of the Securities and Exchange Commission) that
only the
person whose ownership is being reported has converted his options
into
shares of common stock.
|
***PRELIMINARY
COPY***
|
|
(4)
|
Includes
50,000 shares held by Mr. Ehrlich’s wife (in which shares Mr. Ehrlich
disclaims beneficial ownership), 161,381 shares held in Mr. Ehrlich’s
pension plan, 3,000 shares held by children sharing the same household
(in
which shares Mr. Ehrlich disclaims beneficial ownership), and 2,403,667
shares issuable upon exercise of options exercisable within 60
days.
|
|
(5)
|
Includes
870,140 shares issuable upon exercise of options exercisable within
60
days.
|
|
(6)
|
Includes
488,404 shares issuable upon exercise of options exercisable within
60
days.
|
|
(7)
|
Consists
of 106,668 shares issuable upon exercise of options exercisable
within 60
days.
|
|
(8)
|
Includes
106,668 shares issuable upon exercise of options exercisable within
60
days.
|
|
(9)
|
Includes
441,665 shares held by Leon S. Gross and Lawrence M. Miller as
co-trustees
of the Rose Gross Charitable Foundation, and 101,668 shares issuable
upon
exercise of options exercisable within 60 days.
|
|
(10)
|
Includes
40,001 shares issuable upon exercise of options exercisable within
60
days.
|
|
(11)
|
Includes
4,117,216 shares issuable upon exercise of options exercisable
within 60
days.
|
· |
our
Annual Report on Form 10-K for the year ended December 31, 2004,
as filed
with the Securities and Exchange Commission on March 31, 2005, as
amended
by our amended Annual Reports on Form 10-K/A for the year ended December
31, 2004, as filed with the Securities and Exchange Commission on
May 2,
2005 and August 15, 2005;
|
· |
our
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2005
and
June 30, 2005, as filed with the Securities and Exchange Commission
on May
16, 2005 and August 15, 2005,
respectively;
|
· |
our
current reports on Form 8-K filed with the Securities and Exchange
Commission on May 17, 2005, May 23, 2005 and September 30, 2005;
and
|
· |
our
definitive proxy statement on Schedule 14A, as filed with the Securities
and Exchange Commission on June 7, 2005.
|
***PRELIMINARY
COPY***
|
|
By
Order of the Board of Directors,
|
|
Yaakov
Har-Oz
Vice
President, General Counsel and Secretary
|
|
Auburn,
Alabama
November
9, 2005
|
|
***PRELIMINARY
COPY***
|
|
Name
of Holder
|
Number
|
Expires
|
Price
|
|||
Alpha
Capital Aktiengesellschaft
|
121,212
|
05/08/06
|
$3.22
|
|||
Cleveland
Overseas Ltd.
|
103,800
|
06/18/09
|
$2.20
|
|||
Cranshire
Capital L.P.
|
797,872
|
07/07/07
|
$1.88
|
|||
Cranshire
Capital L.P.
|
225,000
|
12/31/06
|
$1.8125
|
|||
Cranshire
Capital L.P.
|
155,700
|
06/18/09
|
$2.20
|
|||
Cranshire
Capital, L.P.
|
274,748
|
06/30/09
|
$1.45
|
|||
Cranshire
Capital, L.P.
|
64,557
|
10/28/08
|
$1.20
|
|||
Portside
Growth and Opportunity Fund
|
750,000
|
*
|
$1.10
|
|||
EDJ
Limited
|
33,333
|
05/08/06
|
$3.22
|
|||
Elliot
Associates, L.P.
|
121,212
|
05/08/06
|
$3.22
|
|||
Elliot
International, L.P.
|
121,212
|
05/08/06
|
$3.22
|
|||
Euram
Cap Strategies “A” Fund Limited
|
72,727
|
05/08/06
|
$3.22
|
|||
First
Investors Holding Co.
|
282,829
|
06/30/09
|
$1.45
|
|||
First
Investors Holding Co.
|
66,456
|
10/28/08
|
$1.20
|
|||
I.E.S.
Electronic Industries, Ltd.
|
250,000
|
02/04/09
|
$1.91
|
|||
Iroquois
Master Fund Ltd.
|
600,000
|
*
|
$1.10
|
|||
Lindsay
A. Rosenwald, M.D.
|
121,212
|
05/08/06
|
$3.22
|
|||
Mainfield
Enterprises Inc.
|
1,063,829
|
07/07/07
|
$1.88
|
|||
Mainfield
Enterprises Inc.
|
155,700
|
06/18/09
|
$2.20
|
|||
Mainfield
Enterprises Inc.
|
225,000
|
07/14/09
|
$1.38
|
|||
Montrose
Investments, Ltd.
|
80,808
|
06/30/09
|
$1.45
|
|||
Montrose
Investments, Ltd.
|
18,987
|
10/28/08
|
$1.20
|
|||
Omicron
Master Trust
|
125,000
|
09/30/06
|
$1.4375
|
|||
Omicron
Master Trust
|
103,800
|
06/18/09
|
$2.20
|
|||
Omicron
Master Trust
|
1,063,829
|
07/14/09
|
$1.38
|
|||
Omicron
Master Trust
|
150,000
|
07/14/09
|
$1.38
|
|||
Omicron
Master Trust
|
1,050,000
|
*
|
$1.10
|
|||
PEAK6
Capital Management LLC
|
531,914
|
07/07/07
|
$1.88
|
|||
Porter
Partners, L.P.
|
33,334
|
05/08/06
|
$3.22
|
|||
Portside
Growth and Opportunity Fund
|
155,700
|
06/18/09
|
$2.20
|
|||
Portside
Growth and Opportunity Fund
|
1,063,829
|
07/14/09
|
$1.38
|
|||
Portside
Growth and Opportunity Fund
|
225,000
|
07/14/09
|
$1.38
|
|||
Portside
Growth and Opportunity Fund
|
750,000
|
*
|
$1.10
|
|||
Smithfield
Fiduciary LLC
|
363,300
|
06/18/09
|
$2.20
|
|||
Smithfield
Fiduciary LLC
|
3,989,367
|
07/14/09
|
$1.38
|
|||
Smithfield
Fiduciary LLC
|
525,000
|
07/14/09
|
$1.38
|
|||
Smithfield
Fiduciary LLC
|
2,400,000
|
*
|
$1.10
|
|||
Special
Situations Cayman Fund, L.P.
|
17,166
|
12/31/08
|
$2.25
|
|||
Special
Situations Cayman Fund, L.P.
|
49,840
|
06/30/08
|
$1.45
|
|||
Special
Situations Fund III, L.P.
|
58,075
|
12/31/08
|
$2.25
|
|||
Special
Situations Fund III, L.P.
|
132,667
|
06/30/08
|
$1.45
|
|||
Special
Situations Private Equity Fund, L.P.
|
82,331
|
12/31/08
|
$2.25
|
|||
Special
Situations Private Equity Fund, L.P.
|
35,680
|
06/30/08
|
$1.45
|
|||
Special
Situations Technology Fund II, L.P.
|
30,451
|
12/31/08
|
$2.25
|
|||
Special
Situations Technology Fund II, L.P.
|
40,500
|
06/30/08
|
$1.45
|
|||
Special
Situations Technology Fund, L.P.
|
5,917
|
12/31/08
|
$2.25
|
|||
Special
Situations Technology Fund, L.P.
|
7,980
|
06/30/08
|
$1.45
|
|||
Vertical
Ventures LLC
|
531,914
|
07/14/09
|
$1.38
|
|||
Vertical
Ventures.Com LLP
|
24,243
|
05/08/06
|
$3.22
|
|||
WEC
Asset Management LLC
|
60,606
|
05/08/06
|
$3.22
|
|||
ZLP
Master Fund, Ltd.
|
145,454
|
07/14/09
|
$1.38
|
|||
ZLP
Master Technology Fund, Ltd.
|
2,000,057
|
12/31/07
|
$0.64
|
|||
ZLP
Master Technology Fund, Ltd.
|
797,872
|
07/14/09
|
$1.38
|
***PRELIMINARY
COPY***
|
|
THIS
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSALS 1, 2 AND
3.
PLEASE
SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK
YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE x
|
FOR
|
AGAINST
|
ABSTAIN
|
||||
1. | To permit us to make scheduled principal payments on our outstanding senior secured convertible notes in stock as contemplated by the terms of the notes |
o
|
o
|
o
|
||
2. |
To
permit us
to adjust the exercise prices of certain of our outstanding
warrants
|
o
|
o
|
o
|
||
3. | To ratify the appointment of Kost, Forer, Gabbay & Kasierer, independent certified public accountants in Israel and a member firm of Ernst & Young International, as our independent accountants for the fiscal year ending December 31, 2005 |
o
|
o
|
o
|
||
PLEASE SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED ENVELOPE. | ||||||
Mark
here if
you plan to attend the meeting. o
|
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.
|
o
|
||||||
Signature
of Stockholder
|
Date:
|
Signature
of Stockholder
|
Date:
|
Note: | Please sign exactly as name appears on this Proxy. When shares are held by joint tenants, both should sign. If signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If you are signing for a corporation, please sign in the full corporate name by President or other authorized officer. If you are signing for a partnership, please sign in the partnership name by authorized person. |
***PRELIMINARY
COPY***
|
|
***PRELIMINARY
COPY***
|
|
PROXY
VOTING
INSTRUCTIONS
|
MAIL
- Date,
sign and mail your proxy card in the envelope provided as soon as
possible.
|
|||||
-
OR -
|
|||||
|
COMPANY
NUMBER
|
||||
TELEPHONE - Call toll-free 1-800-PROXIES (1-800-776-9437) from any touch-tone telephone and follow the instructions. Have your proxy card available when you call. |
ACCOUNT
NUMBER
|
||||
|
|||||
-
OR -
|
|||||
INTERNET
- Access
“www.voteproxy.com”
and follow
the on-screen instructions. Have your proxy card available
when you access the web page.
|
THIS
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSALS 1, 2 AND
3.
PLEASE
SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK
YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE x
|
FOR
|
AGAINST
|
ABSTAIN
|
||||
1. | To permit us to make scheduled principal payments on our outstanding senior secured convertible notes in stock as contemplated by the terms of the notes |
o
|
o
|
o
|
||
2. |
To
permit us
to adjust the exercise prices of certain of our outstanding
warrants
|
o
|
o
|
o
|
||
3. | To ratify the appointment of Kost, Forer, Gabbay & Kasierer, independent certified public accountants in Israel and a member firm of Ernst & Young International, as our independent accountants for the fiscal year ending December 31, 2005 |
o
|
o
|
o
|
||
PLEASE SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED ENVELOPE. | ||||||
Mark
here if
you plan to attend the meeting. o
|
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.
|
o
|
||||||
Signature
of Stockholder
|
Date:
|
Signature
of Stockholder
|
Date:
|
Note: | Please sign exactly as name appears on this Proxy. When shares are held by joint tenants, both should sign. If signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If you are signing for a corporation, please sign in the full corporate name by President or other authorized officer. If you are signing for a partnership, please sign in the partnership name by authorized person. |