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CERAGON NETWORKS LTD.
NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 26, 2001
Notice is hereby given that an Extraordinary General Meeting of Shareholders
(the "Extraordinary General Meeting" or the "meeting"), of Ceragon Networks Ltd.
(the "Company") will be held on Monday, February 26, 2001 at 10:00 A.M., at the
offices of the Company, 24 Raoul Wallenberg Street, Tel Aviv, Israel, for the
following purposes:
(A) To approve Yael Langer's appointment to the Board of
Directors of the Company;
(B) To appoint each of Zohar Gilon and Shmuel Levy as
external directors of the Company;
(C) To approve the grant of options to certain of the
Company's directors;
(D) To approve the increases in the number of ordinary
shares reserved for option grants under the Company's Key Employee
Share Incentive Plan and Affiliate Employees Option Plan; and
(E) To transact such other business as may properly come
before the meeting or any adjournment thereof.
Shareholders of record at the close of business on January 19, 2001, are
entitled to notice of and to vote at the meeting. All shareholders are cordially
invited to attend the Extraordinary General Meeting in person.
Whether or not you plan to attend the meeting, you are urged to promptly
complete, date and sign the enclosed proxy and to mail it in the enclosed
envelope, which requires no postage if mailed in the United States. Return of
your proxy does not deprive you of your right to attend the Extraordinary
General Meeting, to revoke the proxy or to vote your shares in person.
Joint holders of shares should take note that, pursuant to Article 69(b) of the
Articles of Association of the Company, a notice may be given by the Company to
the joint holders of a share by giving notice to one of the joint holders named
in the Register in respect of the shares. Pursuant to the Articles of
Association of the Company, a proxy will be effective only if it is received by
the Company at least 24 hours prior to the time of the Extraordinary General
Meeting.
By Order of the Board of Directors,
ZOHAR ZISAPEL SHRAGA KATZ
Chairman of the Board of Directors President and Chief Executive Officer
Date: January 30, 2001
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CERAGON NETWORKS LTD.
24 Raoul Wallenberg Street
Tel Aviv 69719, Israel
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PROXY STATEMENT
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EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished to the holders of Ordinary Shares, NIS 0.01
nominal value (the "Ordinary Shares") of Ceragon Networks Ltd. ("Ceragon" or the
"Company") in connection with the solicitation by the Board of Directors of
proxies for use at an Extraordinary General Meeting of Shareholders (the
"Extraordinary General Meeting" or the "meeting"), or at any adjournment
thereof, pursuant to the accompanying Notice of Extraordinary General Meeting of
Shareholders. The meeting will be held on Monday, February 26, 2001 at 10:00
A.M., at the offices of the Company, 24 Raoul Wallenberg Street, Tel Aviv,
Israel.
SOLICITATION OF PROXIES
It is proposed that at the Extraordinary General Meeting, Ordinary Resolutions
be adopted as follows: (a) to approve Yael Langer's appointment to the Board of
Directors of the Company; (b) to appoint each of Zohar Gilon and Shmuel Levy as
external directors of the Company; (c) to approve the grant of options to
certain of the Company's directors; (d) to approve the increases in the number
of Ordinary Shares reserved for option grants under the Company's Key Employee
Share Incentive Plan and Affiliate Employees Option Plan; and (e) to transact
such other business as may properly come before the meeting or any adjournment
thereof.
A form of proxy for use at the meeting and a return envelope for the proxy are
also enclosed. Shareholders may revoke the authority granted by their execution
of proxies at any time before the effective exercise thereof by filing with the
Company a written notice of revocation or duly executed proxy bearing a later
date, or by voting in person at the meeting. However, if a shareholder attends
the Extraordinary General Meeting and does not elect to vote in person, his or
her proxy will not be revoked. Unless otherwise indicated on the form of proxy,
if a proxy is properly executed and received by the Company prior to the
meeting, shares represented by the proxy in the enclosed form will be voted in
favor of all the matters to be presented to the meeting, as described above. If
specification is made by a shareholder on the form of proxy, the Ordinary Shares
represented thereby will be voted in accordance with such specification. On all
matters considered at the Extraordinary General Meeting, abstentions and broker
non-votes will be treated as neither a vote "for" nor "against" the matter,
although they will be counted in determining if a quorum is present.
Pursuant to the Articles of Association of the Company, a proxy will be
effective only if it is received by the Company at least 24 hours prior to the
time of the Extraordinary General Meeting.
The Company currently is not aware of any other matters which will come before
the Extraordinary General Meeting. If any other matters come before the
Extraordinary General Meeting, the persons designated as proxies intend to vote
thereon in accordance with their best judgment on such matters.
Proxies for use at the meeting are being solicited by the Board of Directors of
the Company. Proxies are being mailed to shareholders on or about February 1,
2001 and will be solicited chiefly by mail; however, certain officers,
directors, employees and agents of the Company, none of whom will receive
additional compensation therefor, may solicit proxies by telephone, telegram or
other personal contact. The Company will bear the cost for the solicitation of
the proxies, including postage, printing and handling, and will reimburse the
reasonable expenses of brokerage firms and others for forwarding material to
beneficial owners of shares.
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RECORD DATE; OUTSTANDING VOTING SECURITIES; VOTING RIGHTS
Only shareholders of record at the close of business on January 19, 2001 will be
entitled to notice of and to vote at the Extraordinary General Meeting and any
adjournments or postponements thereof. On January 19, 2001, the Company had
20,517,521 Ordinary Shares issued and outstanding, each of which is entitled to
one vote upon each of the matters to be presented at the meeting. Two or more
persons, each being a shareholder, a proxy for a shareholder or a representative
of a corporation, holding together Ordinary Shares conferring in the aggregate
33.3% of the voting power of the Company, present in person or by proxy and
entitled to vote, will constitute a quorum at the meeting.
SECURITY OWNERSHIP BY CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 31, 2000, the number of Ordinary
Shares owned beneficially by (i) all persons known to the Company to own
beneficially more than 5% of the Company's Ordinary Shares, and (ii) all
directors and officers as a group.
The information contained herein has been obtained from the Company's records,
or from information furnished by the individual or entity to the Company.
PERCENTAGE OF OUTSTANDING
NAME NUMBER OF ORDINARY SHARES ORDINARY SHARES
---- ------------------------- ---------------
Yehuda Zisapel 2,838,000 13.83%
Zohar Zisapel 2,544,500 12.40%
Apax Group (1) 1,958,750 9.55%
HarbourVest International
Private Equity Partners III -
Direct Fund, L.P.(2) 1,565,750 7.63%
Evergreen Group(3) 1,306,500 6.37%
All directors and officers as a
group (10 persons) (4) 4,712,850 21.67%
(1) Consists of 1,710,000 Ordinary Shares owned by Apax Israel II, L.P. and
248,750 ordinary shares owned by Apax Israel II, Israeli Partnership.
(2) The sole general partner of HarbourVest International Private Equity
Partners III-Direct Fund, L.P. is HIPEP III-Direct Associates L.L.C., the
managing member of which is HarbourVest Partners, LLC. The members of HIPEP III
Direct Associates L.L.C. and HarbourVest Partners LLC may be deemed to have an
indirect pecuniary interest (within the meaning of Rule 16a-1 under the Exchange
Act) in an indeterminate portion of the shares beneficially owned by HarbourVest
International Private Equity Partners III-Direct Fund, L.P. Such members
disclaim beneficial ownership of these shares within the meaning of Rule 13d-3
of the Exchange Act.
(3) Consists of 37,750 Ordinary Shares held by Evergreen Canada Israel
Management Ltd. in trust for Drumwood Securities Limited, 327,250 Ordinary
Shares held by IJT Technologies Ltd., 749,250 Ordinary Shares held by Periscope
I Fund, LP, Delaware Partnership and 192,250 Ordinary Shares held by Periscope I
Fund LP, an Israeli limited partnership. The general partner of the two
Periscope funds and the management company of IJT Technologies Ltd. and
Evergreen Canada Israel Management Ltd. are indirectly owned by Evergreen Canada
Israel Investments Ltd. The controlling shareholders and directors of Evergreen
Canada Israel Investments Ltd. disclaim beneficial ownership of such shares
except to the extent of any pecuniary interest therein.
(4) Includes only those options that are vested on or before February 28,
2001.
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ITEM A
APPROVAL OF APPOINTMENT OF DIRECTOR
Under the Company's Articles of Association, the Board of Directors is to
consist of at least five and not more than nine directors, unless otherwise
determined by resolution of the Company's shareholders. The Company's Articles
of Association further provide that any director appointed by the Board of
Directors to serve as a member of the Board of Directors shall be approved by
resolution of the shareholders of the Company at the first shareholders' meeting
following the date upon which such person was appointed to serve as a director.
On December 18, 2000, each of Yehuda Zisapel, Allan Barkat and Alex Rogers
resigned as a member of the Board of Directors of the Company, effective
immediately. Allan Barkat and Alex Rogers were independent directors under the
Nasdaq rules, and together with Zohar Gilon, served as members of the Company's
Audit Committee (the "Audit Committee"). On December 18, 2000, the Board of
Directors appointed Yael Langer to serve as a director of the Company until the
next Annual General Meeting of the Shareholders of the Company and until her
respective successor is duly elected and qualified.
Under the Companies Law, the board of directors of any Israeli company whose
shares are publicly traded must appoint an audit committee comprised of at least
three directors including all of the external directors, but excluding:
- - the chairman of the board of directors; and
- - a controlling party, or his relative, and any director employed by the
company or who provides services to the company on a regular basis.
The role of the Audit Committee is to examine accounting, reporting and
financial control practices, in consultation with the internal auditor and the
Company's independent accountants, and to exercise the powers of the Board of
Directors with respect to such practices. Following the resignations of Messrs.
Barkat and Rogers, the Board of Directors appointed Shmuel Levy, an independent
director, to serve as a member of the Audit Committee. In addition, the Board of
Directors appointed Yael Langer to serve as an interim member of the Audit
Committee. Ms. Langer is not currently an employee of the Company, nor is she an
immediate family member of an employee of the Company. From July 1998 until
December 2000, Ms. Langer served as the Company's general counsel and secretary.
Since July 1998, she has served as general counsel and Secretary of Rad Data
Communications Ltd. and other companies in the RAD-BYNET group of companies.
From December 1995 to July 1998, Ms. Langer served as assistant general counsel
to companies in the RAD-BYNET group. As a result, Ms. Langer may not qualify as
an independent director under Nasdaq rules. Nevertheless, Nasdaq rules permit
the appointment to the Audit Committee of one director who does not meet the
independent director requirement, provided that such director is not a current
employee nor an immediate family member of such employee, upon determination by
the Board of Directors that the director is required by the best interests of
the Company and its shareholders. In view of the concurrent resignations of
Messrs. Barkat and Rogers, the Board of Directors believes that it is in the
best interests of the Company and its shareholders to appoint Ms. Langer as an
interim Audit Committee member, while the Board of Directors continues to search
for a third independent director. The Company intends to appoint a third
independent director prior to the next Annual General Meeting.
It is intended that proxies (other than those directing the proxy holders to
vote against Ms. Langer or to abstain) will be voted for the election of Yael
Langer to serve as a director of the Company.
It is proposed that at the Extraordinary General Meeting the following Ordinary
Resolution will be adopted:
"RESOLVED, that the appointment of Yael Langer to serve as a member of
the Board of Directors of the Company until the next Annual General
Meeting of the Shareholders of the Company and until her successor is
duly elected and qualified is hereby approved."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THIS PROPOSED
ORDINARY RESOLUTION.
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ITEM B
APPOINTMENT OF EXTERNAL DIRECTORS
On December 18, 2000, the Board of Directors nominated Zohar Gilon and Shmuel
Levy to each serve as an external director pursuant to Chapter I of Part 6,
Article 5 of the Israel Companies Law, 5759-1999 (the "Companies Law") and as an
independent director pursuant to the Nasdaq rules.
Under the Companies Law, companies incorporated under the laws of Israel whose
shares have been offered to the public in or outside of Israel are required to
appoint two external directors. The Companies Law provides that a person may not
be appointed as an external director if he or his relative, partner, employer or
any entity under his control has or had during the two years preceding the date
of appointment any affiliation with:
- - the company;
- - any entity controlling the company; or
- - any entity controlled by the company or by a controlling entity.
The term affiliation includes:
- - an employment relationship;
- - a business or professional relationship maintained on a regular basis;
- - control; and
- - service as an office holder, excluding service as an office holder during
the three-month period in which the company first offers its shares to the
public.
No person can serve as an external director if the person's position or other
business creates, or may create, conflicts of interests with the person's
service as an external director, or, if his position or business might interfere
with his ability to serve as a director.
External directors are to be elected by a majority vote at a shareholders'
meeting, provided that either:
- - a majority of the shares voted at the meeting, including at least one third
of the shares of non-controlling shareholders voted at the meeting, vote in
favor of the election; or
- - the total number of shares voted against the election of the external
director does not exceed one percent of the aggregate voting rights in the
company.
The initial term of an external director is three years and may be extended for
three additional years. Each committee of a company's board of directors is
required to include at least one external director.
The following information is supplied with respect to each external director
nominee and is based on the records of the Company and information furnished to
it by the nominees.
NAME AGE POSITION
---- --- --------
Zohar Gilon 53 External Director Nominee
Shmuel Levy 46 External Director Nominee
ZOHAR GILON has served as a director of the Company since June 1999.
Mr. Gilon is a General Partner and Managing Director of Tamar Technology
Investors Venture Capital Fund, which he founded in 1998 together with C.E.
Unterberg, Towbin. Mr. Gilon is a private entrepreneur and serves as a director
of other companies in the RAD-BYNET group, including RADCOM, RIT Technologies
and SILICOM. Between November 1993 and June 1995, Mr. Gilon served as president
of W.S.P. Capital Holdings, an investment firm traded on the Tel Aviv Stock
Exchange. Mr. Gilon received a B.S.E.E. from the Technion, Israel Institute of
Technology, and an M.B.A. from Tel Aviv University.
SHMUEL LEVY has served as a director of the Company since June 2000.
From August 1998 until July 2000, Mr. Levy was employed by Lucent Technologies,
Inc., as president, enterprise internetworking systems. From June 1997 to July
1998, Mr. Levy was the president and chief executive officer of Lannet Data
Communications Ltd. From July 1992 to June 1997, Mr. Levy held various executive
positions with Madge
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Networks Ltd. and Lannet Data Communications. Mr. Levy received a B.S. degree in
electrical engineering from Ben Gurion University.
It is proposed that at the Extraordinary General Meeting the following Ordinary
Resolution will be adopted:
"RESOLVED, that each of Zohar Gilon and Shmuel Levy is hereby appointed
to serve as an external director of the Company in accordance with the
Israeli Companies Law, for a period of three years."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THIS PROPOSED
ORDINARY RESOLUTION.
ITEM C
APPROVAL OF THE GRANT OF OPTIONS TO CERTAIN OF THE COMPANY'S DIRECTORS
At a meeting of the Board of Directors on December 21, 2000, Zohar Zisapel,
Chairman of the Board of Directors, was granted options to purchase 75,000
Ordinary Shares to be vested over a period of three years, at an exercise price
of US$11.75 per share, one third to be vested at the end of each year, provided
he is still a director of the Company. Shraga Katz, Chief Executive Officer and
a director of the Company, in his capacity as a director of the Company, was
granted options to purchase 50,000 Ordinary Shares, to be vested over a period
of three years, at an exercise price of US$11.75 per share, one third to be
vested at the end of each year, provided he is still a director of the Company.
Zohar Gilon, a director and External Director Nominee of the Company, was
granted options to purchase 50,000 Ordinary Shares to be vested over a period of
three years, at an exercise price of US$11.75 per share, one third to be vested
at the end of each year, provided he is still a director of the Company. Yael
Langer, a Director of the Company, was granted options to purchase 37,500
Ordinary Shares, to be vested over a period of three years, at an exercise price
of US$11.75 per share, one third to be vested at the end of each year, provided
she is still a director of the Company. The option grants to the directors
described above followed approval by the Audit Committee and the exercise price
of these grants was equal to the closing price of the Company's Ordinary Shares
on the Nasdaq National Market on December 21, 2000.
It is proposed that at the Extraordinary General Meeting the following Ordinary
Resolution will be adopted:
"RESOLVED, to approve the grant of options to the Company's directors,
Messrs. Zohar Zisapel, Shraga Katz, Zohar Gilon and Ms. Yael Langer."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THIS PROPOSED
ORDINARY RESOLUTION.
ITEM D
APPROVAL OF INCREASES IN THE NUMBER OF ORDINARY SHARES RESERVED FOR OPTION
GRANTS UNDER THE COMPANY'S KEY EMPLOYEE SHARE INCENTIVE PLAN AND AFFILIATE
EMPLOYEES OPTION PLAN
On August 10, 2000, the Board of Directors increased by 1,000,000 the number of
Ordinary Shares reserved, in the aggregate, for option grants under the
Company's Key Employee Share Incentive Plan and Affiliate Employees Option Plan
(collectively, the "Plans"). On January 24, 2001, the Board of Directors
increased by 1,100,000 the number of Ordinary Shares reserved, in the aggregate,
for option grants under the Plans. As of January 30, 2001, a total of 7,196,500
Ordinary Shares are reserved, in the aggregate, for option grants under the
Plans.
It is proposed that at the Extraordinary General Meeting the following Ordinary
Resolution will be adopted:
"RESOLVED, that the increases by the Board of Directors on August 10,
2000 and January 24, 2001 of the number of Ordinary Shares reserved, in
the aggregate, for option grants under the Company's Key Employee
Incentive Stock Option Plan and Affiliate Employees Option Plan be and
hereby are, approved."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THIS PROPOSED
ORDINARY RESOLUTION.
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OTHER BUSINESS
Management knows of no other business to be transacted at the meeting, other
than as set forth in the Notice of Extraordinary General Meeting; but, if any
other maters are properly presented to the meeting, the persons named in the
enclosed form of proxy will vote upon such matters in accordance with their best
judgment.
By Order of the Board of Directors,
ZOHAR ZISAPEL SHRAGA KATZ
Chairman of the Board of Directors President and Chief Executive Officer
Dated: January 30, 2001
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