We cordially invite you to the 2006 Annual General Meeting of Shareholders to be held at 10 a.m. on Tuesday, August 15, 2006 at our offices at 7 Giborei Israel Street, Netanya, Israel, for the following purposes:
(1) To elect two Class A directors for terms expiring in 2009;
(2) To elect two outside directors for terms expiring in 2009;
(3) To approve the compensation of our outside directors;
(4) To amend our 2003 Stock Option Plan to provide for the issuance thereunder of an additional 1,500,000 ordinary shares;
(5) To increase our authorized ordinary share capital;
(6) To amend our Articles of Association to add Article 46(c), according to which we will not be required to distribute copies of our annual audited financial statements to our shareholders;
(7) To authorize Mr. Herzle Bodinger, the Chairman of our Board of Directors, to serve concurrently as our Chief Executive Officer;
(8) To ratify the reappointment of Kost Forer Gabbay & Kasierer, independent certified public accountants in Israel, a member firm of Ernst & Young Global, as our independent registered public accountants for the year ending December 31, 2006 and to authorize our Board of Directors to determine their compensation based on the recommendation of our Audit Committee; and
(9) To review and discuss our auditor's report, and consolidated financial statements for the year ended December 31, 2005.
The Board of Directors recommends that you vote in favor of all of the items, which are described in the attached Proxy Statement.
Shareholders of record at the close of business on June 16, 2006 are entitled to notice of and to vote at the Meeting. You can vote by proxy either by mail or in person. If voting by mail, the proxy must be received by our transfer agent or at our registered office in Israel at least forty-eight (48) hours prior to the appointed time of the Meeting to be validly included in the tally of ordinary shares voted at the Annual General Meeting. Detailed proxy voting instructions are provided both in the Proxy Statement and on the enclosed proxy card.
