<PAGE>
================================================================================
SCHEDULE 14(a) INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
AURA SYSTEMS, INC.
- --------------------------------------------------------------------------------
Name of Registrant as Specified In Its Charter
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] 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:
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(2) Aggregate number of securities to which transaction applies:
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(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:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] 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.:
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(3) Filing Party
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(4) Date Filed:
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Notes:
<PAGE>
AURA SYSTEMS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 17, 1997
To the Shareholders of Aura Systems, Inc.:
The Annual Meeting of Shareholders of Aura Systems, Inc., a Delaware
corporation (the "Company"), will be held on September 17, 1997 at 3:00 p.m.,
PDT, near the Company's corporate offices at the Sheraton Gateway Hotel, 6101
West Century Blvd., Los Angeles, CA, for the following purposes:
(1) To elect a Board of Directors of 11 members;
(2) To approve an amendment to the Company's Certificate of Incorporation
increasing the number of authorized shares of Common Stock from 100,000,000 to
200,000,000; and
(3) To transact any other business which may properly come before the
meeting.
Shareholders of record at the close of business on July 21, 1997 will be
entitled to notice of and to vote at the meeting and any adjournments thereof.
All Shareholders are cordially invited to attend the meeting in person.
Whether or not you expect to attend the meeting, PLEASE COMPLETE AND SIGN THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. The giving of
your proxy will not affect your right to vote in person should you later decide
to attend the meeting.
The meeting will be conducted in a fair and impartial manner and will be
governed by the Chairperson. Any shareholder of record of the Company at the
close of business on July 21, 1997, may attend. Any beneficial owner of shares
with a letter of authorization from his recordholder may attend the meeting.
During the meeting, attendees will be given an opportunity to present matters
for consideration to the Chair of the meeting. Attendees may make a record of
the meeting at the conclusion of which they may ask questions of the Chair or of
Management.
By Order of the Board of Directors
/s/ Michael I. Froch
Michael I. Froch
Secretary
El Segundo, California
August 8, 1997
<PAGE>
AURA SYSTEMS, INC.
2335 Alaska Avenue
El Segundo, California 90245
(310) 643-5300
PROXY STATEMENT
August 8, 1997
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Aura Systems, Inc. ("Aura" or the
"Company") for the Annual Meeting of Shareholders to be held on September 17,
1997 (the "Annual Meeting") and any postponements or adjournments thereof. Any
Shareholder giving a proxy may revoke it before or at the meeting by providing a
proxy bearing a later date or by attending the meeting and expressing a desire
to vote in person. All proxies will be voted as directed by the Shareholder on
the proxy card; and, if no choice is specified, they will be voted (1) "FOR" the
directors nominated by the Board of Directors, (2) "FOR" the proposed amendment
to the Company's Certificate of Incorporation increasing the number of
authorized shares of Common Stock from 100,000,000 to 200,000,000, and in the
discretion of the persons acting as proxies, for any other matters.
Your cooperation in promptly returning the enclosed proxy will reduce
Aura's expenses and enable its management and employees to continue their normal
duties for your benefit with minimum interruption for follow-up proxy
solicitation.
Only Shareholders of record at the close of business on July 21, 1997
are entitled to receive notice of and to vote at the meeting. On that date,
Aura had outstanding 79,630,944 shares of Common Stock. The shares of Common
Stock vote as a single class. Holders of shares of Common Stock on the record
date are entitled to vote one vote for each share held. The presence at the
Annual Meeting, either in person or by proxy, of the holders of a majority of
the shares of Common Stock issued, outstanding and entitled to vote is necessary
to constitute a quorum for the transaction of business.
This Proxy Statement and the accompanying Notice of Annual Meeting and
form of Proxy are being mailed or delivered to Shareholders on or about August
8, 1997.
In the event that sufficient votes in favor of the proposals are not
received by the date of the Annual Meeting, the persons named as proxies may
propose one or more adjournments of the Annual Meeting to permit further
solicitations of proxies. Any such adjournment will require the affirmative
vote of the holders of a majority of the shares of Common Stock present in
person or by proxy at the Annual Meeting. The persons named as proxies will
vote in favor of such adjournment or adjournments.
The cost of preparing, assembling, printing and mailing the materials,
the Notice and the enclosed form of Proxy, as well as the cost of soliciting
proxies relating to the Annual Meeting, will be borne by the Company. The
Company will request banks, brokers, dealers, and voting trustees or other
nominees to forward solicitation materials to their customers who are beneficial
owners of shares, and will reimburse them for the reasonable out-of-pocket
expenses of such solicitations. The original solicitation of proxies by mail may
be supplemented by telephone, telegram, personal solicitation or other means by
officers and other regular employees or agents of the Company, but no additional
compensation will be paid to such individuals on account of such activities. The
Company has retained the proxy solicitation firm of Georgeson & Company, Inc. to
assist the Company in the solicitation of Proxies and will be paid a fee of
$6,500.00 plus its reasonable out-of-pocket expenses.
PLEASE MARK, DATE, AND SIGN THE ENCLOSED PROXY AND RETURN IT AT AN EARLY DATE IN
THE ENCLOSED POSTAGE-PREPAID RETURN ENVELOPE SO THAT, IF YOU ARE UNABLE TO
ATTEND THE ANNUAL MEETING, YOUR SHARES MAY BE VOTED.
1
<PAGE>
PROPOSAL NO. 1
ELECTION OF 11 NOMINEES FOR DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE SHAREHOLDERS VOTE
"FOR" THE ELECTION OF THE 11 NOMINEES FOR DIRECTOR.
NOMINEES AND VOTING
The Bylaws of the Company provide for a board of 11 directors.
Consequently, at the Annual Meeting, 11 directors will be elected to serve until
the next Annual Meeting and until their successors are elected and qualified.
Proxies may not be voted for more than 11 persons. The Company has nominated
for election as directors the 11 persons named below. Each of these nominees
have indicated that they are able and willing to serve as directors.
Unless otherwise instructed, the Company's proxy holders intend to
vote the shares of Common Stock represented by the proxies in favor of the
election of these nominees. If for any reason any of these nominees will be
unable or unwilling to serve, the shares represented by the enclosed proxy will
be voted for the election of the balance of those named and such other person or
persons as the Board of Directors may recommend. The Board of Directors has no
reason to believe that any such nominee will be unable or unwilling to serve.
Directors are elected by a plurality of the votes cast.
The Company's nominees and directors are listed below, together with
their ages, principal occupations, offices with the Company and year in which
each became a director of the Company.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE SHAREHOLDERS VOTE
"FOR" THE ELECTION OF THE 11 NOMINEES FOR DIRECTOR.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE TITLE
- ----------------------------------- --- -------- -------------------------------------------
<S> <C> <C> <C>
Zvi (Harry) Kurtzman 50 1987 Chief Executive Officer and Director
Arthur J. Schwartz 49 1987 Executive Vice President
and Director
Cipora Kurtzman Lavut 41 1989 Senior Vice President,
Corporate Communications and Director
Harvey Cohen 64 1993 Director
Norman Reitman 74 1989 Director
Neal B. Kaufman 52 1989 Senior Vice President, Management
Information Systems and Director
Ashok Dewan 58 Nominee
Salvador Diaz-Verson, Jr. 45 Nominee
Gerald S. Papazian 42 President, Chief Operating Officer, Nominee
Steven C. Veen 41 Senior Vice President,
Chief Financial Officer, Nominee
Peter Liu 49 Nominee
</TABLE>
2
<PAGE>
Cipora Kurtzman Lavut, a Senior Vice President and director, is the sister
of Zvi Kurtzman, who is the Chief Executive Officer and a director of the
Company. There are no other family relationships between any director or
executive officer.
BUSINESS EXPERIENCE OF DIRECTORS AND NOMINEES DURING THE PAST FIVE YEARS
ZVI KURTZMAN has been the Chief Executive Officer and a director of the Company
since February 1987 and devotes his full time to the Company. Between February
1987 and July 1997 Mr. Kurtzman also served as the President and Chief Operating
Officer of the Company. Mr. Kurtzman has served as the President of Innovative
Information Services, Inc. (IIS), whose business was primarily computer assisted
control systems, since 1982 and served as a director of IIS and CMI since 1982
and 1984, respectively. Mr. Kurtzman obtained his B.S. and M.S. degrees in
physics from California State University, Northridge in 1970 and 1971,
respectively, and completed all course requirements for a Ph.D. in theoretical
physics at the University of California, Riverside. He was employed as a senior
scientist with the Science Applications International Corp., a scientific
research company in San Diego, from 1984 to 1985 and with Hughes Aircraft
Company, a scientific and aerospace company, from 1983 to 1984. Prior thereto,
Mr. Kurtzman was a consultant to major defense subcontractors in the areas of
computer, automation and engineering.
In October, 1996, the Securities and Exchange Commission ("Commission") issued
an order (Securities Act Release No. 7352) instituting an administrative
proceeding against Aura Systems, Zvi Kurtzman, and an Aura former officer. The
proceeding was settled on consent of all the parties, without admitting or
denying any of the Commission's findings. In its order, the Commission found
that Aura and the others violated the reporting, recordkeeping and anti-fraud
provisions of the securities laws in 1993 and 1994 in connection with its
reporting on two transactions in reports previously filed with the Commission.
The Commission's order directs that each party cease and desist from committing
or causing any future violation of these provisions. The Commission did not
require Aura to restate any of the previously issued financial statements or
otherwise amend any of its prior reports filed with the Commission. Also, the
Commission did not seek any monetary penalties from Aura, Mr. Kurtzman or anyone
else. Neither Mr. Kurtzman nor anyone else personally benefited in any way from
these events. For a more complete description of the Commission's Order, see
the Commission's release referred to above.
ARTHUR J. SCHWARTZ, PH.D. has been the Executive Vice President and a director
of the Company since February 1987 and the Executive Vice President and a
director of CMI since 1984. Dr. Schwartz devotes his full time to the Company.
Dr. Schwartz was appointed President of IIS in 1988 after having served as its
Executive Vice President since 1984. Dr. Schwartz has also served as a director
of IIS since 1984. Dr. Schwartz obtained his M.S. degree in physics from the
University of Chicago in 1971 and a Ph.D. in physics from the University of
Pittsburgh in 1978. Dr. Schwartz was employed as a Technical Director with
Science Applications International Corp., a scientific research company in San
Diego, California, from 1983 to 1984 and was a senior physicist with Hughes
Aircraft Company, a scientific and aerospace company, from 1980 to 1984. While
at Hughes, he was responsible for advanced studies and development where he
headed a research and development effort for new technologies to process optical
signals detected by space sensors.
CIPORA KURTZMAN LAVUT was appointed Senior Vice President Corporate
Communications in December 1991. She previously served as Vice President in
charge of Marketing and Contracts for the Company since 1988 and was appointed
director of the Company in 1989. Ms. Kurtzman-Lavut was the Director of
Contracts and Marketing for CMI, a computer software company, where she served
from 1985 to 1988. She graduated in 1984 from California State
3
<PAGE>
University at Northridge with a B.S. degree in Business Administration. Ms.
Kurtzman-Lavut is the sister of Zvi Kurtzman.
HARVEY COHEN has been a director of the Company since August 1993. Mr. Cohen is
President of Margate Advisory Group, Inc., an investment advisor registered with
the Securities and Exchange Commission, and a management consultant since August
1981. Mr. Cohen has consulted the Company on various operating and growth
strategies since June 1989 and assisted in the sale of certain of the Company's
securities. From December 1979 through July 1981, he was President and Chief
Operating Officer of Silicon Systems, Inc., a custom integrated circuit
manufacturer which made its initial public offering in February 1981 after
having raised $4 million in venture capital in 1980. From 1975 until 1979, Mr.
Cohen served as President and Chief Executive Officer of International
Communication Sciences, Inc., a communications computer manufacturing start-up
company for which he raised over $7.5 million in venture capital. From 1966
through 1975, Mr. Cohen was employed by Scientific Data Systems, Inc.
("S.D.S."), a computer manufacturing and service company, which became Xerox
Data Systems, Inc. ("X.D.S.") after its acquisition by Xerox in 1979. During
that time, he held several senior management positions, including Vice
President-Systems Division of S.D.S. and Senior Vice President-Advanced Systems
Operation of the Business Planning Group.
NORMAN REITMAN has been a director of the Company since January 1989. Mr.
Reitman currently serves as an independent consultant to Kroll Associates, Inc.,
an international investigative firm. Mr. Reitman obtained his B.B.A. degree in
business administration from St. Johns University in 1946 and became licensed as
a public accountant in New York in 1955. Mr. Reitman is the retired Chairman of
the Board and President of Norman Reitman Co., Inc., insurance auditors, where
he served from 1979 until June 1990. Mr. Reitman was a senior partner in Norman
Reitman Co., a public accounting firm, where he served from 1952 through 1979.
Mr. Reitman served on the Board of Directors and was a Vice President of
American Family Life Assurance Co., a publicly held insurance company, from 1966
until April 1991.
NEAL B. KAUFMAN appointed as a director in 1989, is Senior Vice President of
Aura, where he has served since 1988. Prior thereto, he has served as President
and Vice President of CMI since 1984 and 1988, respectively. Mr. Kaufman has
also been a director of CMI since 1984. Mr. Kaufman graduated from the
University of California, Los Angeles, in 1967 where he obtained a B.S. in
engineering. He was employed as a software project manager with Abacus
Programming Corp., a software development firm, from 1975 to 1985 where he
headed a team of software specialists on the Gas Centrifuge Nuclear Fuel
enrichment program for the United States Department of Energy and developed
software related to the Viking and Marine projects for the California Institute
of Technology Jet Propulsion Laboratory in Pasadena, California.
ASHOK DEWAN is the founder and Chairman of K&K Enterprises of India (K&K), since
its formation in 1986. K&K is engaged in the manufacture, sale and distribution
of consumer electronics, and has been an OEM supplier to companies such as
Philips, ASM, JBL and Infinity Systems. In 1995, Aura and K&K formed a joint
venture, Dewan-Aura, which manufactures and sells Aura's speakers and Bass
Shakers in the Republic of Taiwan, the Indian subcontinent, Middle East and
Europe. In 1989, Mr. Dewan founded Chand International, which is engaged in the
manufacture and sale of garments, and has served as its Chairman since its
formation.
SALVADOR DIAZ-VERSON, JR. is the founder, and since 1991 has been the Chairman
and President of Diaz-Verson Capital Investments, Inc., an Investment Adviser
registered with the Securities and Exchange Commission. Mr. Diaz-Verson served
as president and member of the Board of Directors of American Family Corporation
(AFLAC Inc.) a publicly held insurance holding company, from 1979 until 1991.
Mr. Diaz-Verson also served as Executive Vice President and Chief Investment
Officer of American Family Life Assurance Company, a subsidiary of AFLAC, Inc.
from 1976 through 1991. Mr. Diaz-Verson is a graduate of Florida State
University. He is currently a director of the board of Miramar Securities,
Clemente Capital Inc., Regions Bank of Georgia and The Phillipine Strategic
Investment Holding Limited.
4
<PAGE>
GERALD S. PAPAZIAN was appointed President and Chief Operating Officer of Aura
in July 1997. Prior to his appointment as President, Mr. Papazian served as the
Company's Senior Vice President of Administration. He has been with Aura
Systems for over eight years and has been involved in the day-to-day operations
of the Company with direct responsibility for contract administration,
purchasing, inventory control, logistics, warehousing, shipping and receiving
and human resources. He joined the Company in August 1988 from Bear, Stearns &
Co., an investment banking firm, where he served from 1986 as Vice President,
Corporate Finance. His responsibilities there included valuation of companies
for potential financing, merger or acquisition. Prior to joining Bear Stearns,
Mr. Papazian was an Associate in the New York law firm of Stroock & Stroock &
Lavan, where he specialized in general corporate and securities law with
extensive experience in public offerings. His educational qualifications
include a BA, Economics (magna cum laude) from the University of Southern
California in 1977 and a JD and MBA from the University of California, Los
Angeles in 1981. He currently serves as a trustee of the University of Southern
California.
PETER LIU is the Chairman and CEO of W I Harper Group. As Chairman and co-
founder of W I Harper Group, Mr. Liu directs and implements both W I Harper
Group corporate and client Asia-Pacific market and business development
strategies. Mr. Liu has established relationships with prominent, key officials
and executives in both the private and public sectors of China, as well as
throughout other major Asian economic communities. Mr. Liu was a General
Partner of the Walden Group of Venture Capital Funds and the Executive Vice
President and Director of IVCIC, Walden's fund based in Taiwan. Before co-
founding IVCIC, Mr. Liu served as the President of Marsquare International, an
international trade and merchandising company based in San Francisco. Mr. Liu
was a co-founder of California National Bank and served as a partner of Chester
International, a management consulting firm focused on international business
development. Mr. Liu earned a Bachelor of Science Degree and a Masters Degree
in Business Administration from the University of California at Berkeley,
California USA.
STEVEN C. VEEN a certified public accountant, was appointed Chief Financial
Officer in March 1994. He joined the Company as its Controller in December
1992. Prior to that, he had over 12 years experience in varying capacities in
the public accounting profession. Mr. Veen served from 1983 to December 1992
with Muller, King, Black, Mathys & Acker, Certified Public Accountants. He
received a B.A. in accounting from Michigan State University in 1981.
5
<PAGE>
MANAGEMENT
Listed below are Executive Officers of the Company who are not directors or
nominees, their ages, titles and background information. All the officers
listed below hold their offices at the pleasure of the Board of Directors.
<TABLE>
<CAPTION>
Name Age Title
- ---------------------- --- ----------------------------------
<S> <C> <C>
Gregory Um, Ph.D. 49 President Aura Display
Keith O. Stuart 41 President Tech Center
Ronald J. Goldstein 56 President Aura Automotive
Sultan Khan 52 President NewCom
Jacob Mail 47 Vice President Operations Planning
Yoshikazu Masayoshi 56 President MYS Corporation
</TABLE>
GREGORY UM, PH.D. is President of the Display Division. Dr. Um is in charge of
transforming technological ideas into commercial products. Dr. Um has 15 years
of experience in project management and industrial technical experience in the
fields of scene projection systems, sensor systems and analysis signal
processing algorithms, wavefront sensors, high energy laser pointing and
tracking systems, physics of thermodynamics and thermal properties. He is the
principal inventor of the Aura Systems scene projectors and has directed all of
the scene projector development efforts within the company. Prior to joining
Aura. Dr. Um was a Senior Scientist at Hughes Aircraft Co., a scientific and
aerospace company, with major achievements in the areas of sensors, optics, and
algorithms. Dr. Um has over 20 professional publications.
KEITH O. STUART was appointed President of the Research Center in 1995.
Previously he served as Vice President in charge of Hardware Development for
Aura since 1988 and as a Program manager for IIS in 1987. Mr. Stuart obtained
his B.S. and M.S. degrees in electrical engineering from the University of
California Los Angeles in 1978 and 1980, respectively. Mr. Stuart worked for
CMI during 1986 and was employed by Hughes Aircraft Company, a scientific and
aerospace company, prior thereto. Mr. Stuart has designed and fabricated
digitally controlled, magnetically supported gimbals that isolate the seeker
portion of a United States Space Defense Initiative and has also developed a
multi-computer automated test station for the evaluation of sophisticated
electro-optical devices.
RONALD J. GOLDSTEIN was appointed President of Automotive and joined Aura in
1989. He holds two M.S. degrees in Computing Technology and the Management of R
& D from George Washington University and has completed course work for a Ph.D.
in Nuclear Engineering from North Carolina State University. Mr. Goldstein has
over 25 years of experience in high technology both in government and industry.
Since 1989 Mr. Goldstein has been responsible for all marketing and business
development activities for the Company. Prior to joining Aura Mr. Goldstein was
Manager of Space Initiatives at Hughes Aircraft Company, a scientific and
research company, where he was responsible for the design, production and
marketing of a wide variety of aerospace systems and hardware. Prior to joining
Hughes in 1982, Mr. Goldstein was the Special Assistant for National programs in
the Office of the Secretary of Defense, and before that held high level program
management positions with the Defense Department and Central Intelligence
Agency.
SULTAN KHAN has been President of NewCom, Inc. since 1994. Prior thereto he was
founder and President of Nuvo Corporation of America, Inc. ("Nuvo"), a
developer, manufacturer and marketer of PC peripheral products. Nuvo was
liquidated in 1994 when Mr. Khan was its President pursuant to a petition under
the U.S. Bankruptcy Code, and certain assets of Nuvo were acquired by the
Company and contributed to NewCom. Prior to his involvement with Nuvo, Mr. Khan
successfully founded and grew Computer Peripherals, Inc. to a multi-million
dollar sales company before his departure. Under his leadership, the Company
was at one time an industry leader in modem communication products. Prior, at
Texas Instrument he was given the award for the most sales in one year and at
Data Products was responsible for development of a high
6
<PAGE>
speed band printer family of product. Mr. Khan received his B.S.E.E. at Cal
Polytechnic Institute San Luis Obispo and a M.B.A. at Cal Lutheran College.
JACOB MAIL joined the Company in May 1995 and was appointed Vice President,
Operational Planning. Mr. Mail served over 20 years at Israeli Aircraft
Industries, starting as a Lead Engineer and progressing to Program manager.
He was responsible for the development and production of hydraulic actuation,
steering control systems, rotor brake systems and other systems and subsystems
involved in both commercial and military aircraft. Systems designed by Mr. Mail
are being used today all over the western world. In addition, Mr. Mail has
extensive experience in the preparation of technical specifications planning and
in organizing production in accordance with customer specifications at full
quality assurance.
YOSHIKAZU MASAYOSHI is President of MYS Corporation, joining the Company in 1996
as part of Aura's acquisition of MYS and its subsidiaries. Mr. Masayoshi has
been with MYS since its founding in 1986 and has, during that time, extended the
Japan based R&D center and created the MYS factory in Malaysia. Prior to
joining MYS, he served as the Senior Vice President of Jyoto Works Co., Ltd.,
from 1963 to 1986, where he marketed speaker components to loudspeaker
manufacturers worldwide. Mr. Masayoshi holds a B.A. from Kinki University of
Osaka, Japan.
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the Company's
Common Stock owned as of May 31, 1997 (i) by each person who is known by Aura to
be the beneficial owner of more than five percent (5%) of its outstanding Common
Stock, (ii) by each of the Company's directors and nominees and those executive
officers named in the Summary Compensation Table, and (iii) by all directors and
executive officers as a group:
<TABLE>
<CAPTION>
Shares of Percent of
Common Stock Common Stock
Name Beneficially Owned Beneficially Owned
<S> <C> <C>
Zvi (Harry) Kurtzman 1,674,896 (1)(2) 2.1%
Arthur J. Schwartz 1,389,062 (1)(3)(4) 1.8%
Cipora Kurtzman Lavut 1,306,382 (5) 1.7%
Neal B. Kaufman 1,371,434 (1)(9) 1.7%
Gregory Um 458,542 (7) *
Norman Reitman 587,142 (6) *
Harvey Cohen 393,942 (8) *
Yoshikazu Masayoshi 283,455 (10) *
Ashok Dewan -- --
Salvador Diaz-Verson, Jr. 10,000 *
Peter Liu -- --
Gerald S. Papazian 119,282 (11) *
Steven C. Veen 73,199 (12) *
All executive officers 8,137,606 10.6%
and directors as a group
(17 persons)
</TABLE>
- ------------------------
* Less than 1% of outstanding shares.
(1) Includes 175,000 shares held of record by Advanced Integrated Systems, Inc.
(2) Includes 400,000 shares which may be purchased pursuant to options and
convertible securities exercisable within 60 days of May 31, 1997.
(3) Includes 275,000 shares which may be purchased pursuant to options and
convertible securities exercisable within 60 days of May 31, 1997.
(4) Includes 32,000 shares held by Dr. Schwartz as custodian for his children,
to which Dr. Schwartz disclaims any beneficial ownership.
(5) Includes 275,000 shares which may be purchased pursuant to options
exercisable within 60 days of May 31, 1997.
8
<PAGE>
(6) Includes 345,000 shares which may be purchased pursuant to options
exercisable within 60 days of May 31, 1997 and 12,500 shares owned by Mr.
Reitman's wife, as to which 12,500 shares he disclaims any beneficial ownership.
(7) Includes 336,000 shares which may be purchased pursuant to options
exercisable within 60 days of May 31, 1997.
(8) Includes 155,000 shares beneficially owned, of which 145,000 shares may be
purchased pursuant to options and convertible securities within 60 days of May
31, 1997. In connection with his investment advisory business, this amount also
includes 31,250 shares and 207,692 shares which may be purchased upon conversion
of 7% Secured Convertible Notes over which Mr. Cohen has voting and investment
control and as to which Mr. Cohen disclaims beneficial ownership.
(9) Includes 248,000 shares which may be purchased pursuant to options and
convertible securities exercisable within 60 days of May 31, 1997.
(10) Includes 283,455 shares which were received as part of the MYS acquisition
purchase consideration.
(11) Includes 100,000 shares which may be purchased pursuant to options
exercisable within 60 days of May 31, 1997.
(12) Includes 50,000 shares which may be purchased pursuant to options
exercisable within 60 days of May 31, 1997.
The mailing address for each of these individuals is c/o Aura Systems,
Inc., 2335 Alaska Avenue, El Segundo, CA 90245.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
Aura's Board of Directors held eight meetings during the year ended
February 28, 1997. Each director whose term is expected to continue attended
more than 75% of the Board meetings during Fiscal 1997. During the last fiscal
year the Company did not maintain a nominating committee. Since August 1993,
the Company has maintained a Compensation Committee consisting of Messrs.
Reitman and Cohen. The Compensation Committee did not meet during Fiscal 1997.
Since January 1989, the Company has maintained an Audit Committee which
currently consists of Messrs. Reitman and Cohen. The Audit Committee approves
the selection and engagement of independent accountants and reviews with them
the plan and scope of their audit for each year, the results of the audit when
completed, and their fees for services performed. The Audit Committee met six
times during the fiscal year ended February 28, 1997 and has not met in the
current fiscal year.
9
<PAGE>
EXECUTIVE COMPENSATION
CASH COMPENSATION FOR EXECUTIVES
The following table summarizes all compensation paid to the Company's Chief
Executive Officer, and to the four most highly compensated executive officers of
the Company other than the Chief Executive Officer whose total compensation
exceeded $100,000 during the fiscal year ended February 28, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Long Term All Other
Compensation(1) Compensation Awards Compensation(2)
-------------- ------------------- ---------------
<CAPTION>
Name and
Principal Position Year Salary Options/SARs
- ----------------------------- ---- -------- -------------------
<S> <C> <C> <C>
Zvi Kurtzman /(1)/ 1997 $212,549 0 $1,839
Chief Executive Officer 1996 191,791 0
1995 155,673 0
Arthur J. Schwartz /(1)/ 1997 $163,971 0 $1,965
Ph.D., Executive 1996 153,216 0
Vice President 1995 141,220 0
Neal B. Kaufman /(1)/ 1997 $151,654 0 $1,921
Senior Vice President 1996 146,350 0
1995 140,342 0
Gregory Um, Ph.D. /(1)/ 1997 $150,596 0 $1,712
President, Aura Display 1996 123,210 0
1995 119,579 0
Yoshikazu Masayoshi 1997 $270,000 0 $ 0
President, MYS Corporation 1996 0 0
1995 0 0
</TABLE>
- --------------------------
/(1)/ The amounts shown are the amounts actually paid to the named officers
during the respective fiscal years. Because of the timing of the payments, these
amounts do not represent the actual salary accrued by each individual during the
period. The actual salary rate for these individuals which was accrued during
fiscal year ended February 1997, 1996 and 1995, respectively, were as follows:
Zvi Kurtzman - $200,000, $200,000, $150,000; Arthur J. Schwartz, Ph.D., -
$160,000; $160,000, $140,000; Neal Kaufman - $149,000, $149,000, $139,000; Greg
Um - $150,000, $123,750, (Dr. Um's salary was adjusted to $135,000 on November
1995), $120,000.
/(2)/ Such compensation consisted of total Company contributions made to the
plan account of each individual pursuant to the Company's Employees Stock
Ownership Plan during the fiscal year ended February 28, 1997.
No cash bonuses or restricted stock awards were granted to the above
individuals during the fiscal years ended February 28, 1997, February 29, 1996
and February 28, 1995. Effective December 1992, the Company elected to begin to
compensate non-officer directors at the rate of $5,000 per year. Effective
September 1997, each non-employee director will receive $30,000 per year for
serving as a director, and $5,000 per year for each director who serves on the
audit committee.
10
<PAGE>
The following table summarizes certain information regarding the number and
value of all options to purchase Common Stock of the Company held by the Chief
Executive Officer and those other executive officers named in the Summary
Compensation Table.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options/SARs at Fiscal In-the-Money Options/
Name Year End SARs at Fiscal Year End*
- ---- --------------------------- --------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Zvi Kurtzman 400,000 70,000 $187,125 $ 0
Arthur Schwartz 275,000 40,000 $ 87,325 $ 0
Neal Kaufman 248,000 22,000 $ 87,325 $ 0
Cipora Kurtzman Lavut 275,000 40,000 $ 87,325 $ 0
Gregory Um 336,000 84,000 $ 0 $ 0
Yoshikazu Masayoshi 0 0 $ 0 $ 0
</TABLE>
*Based on the average high and low reported prices of the Company's Common Stock
on the last day of the fiscal year ended February 28, 1997.
No options were exercised by the above individuals during the fiscal year ended
February 28, 1997.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Option Repricing
In July 1997 the Board of Directors approved the repricing of stock options
granted prior to 1997 to the Company's two current outside directors, Harvey
Cohen and Norman Reitman, to $2.06 per share. The repriced options for Mr. Cohen
consist of 50,000 options granted in April 1993 and 50,000 options granted in
July 1995 at original exercise price of $5.50 and $3.50, respectively.
The repriced options for Mr. Reitman consist of 100,000 options granted in
June 1990, 100,000 options granted in May 1993, 50,000 options granted in April
1995 and 50,000 options granted in July 1995. The original exercise price for
these options was $3.43, $4.00, $4.50 and $4.50, respectively.
The Board of Directors also determined in July 1997 that the Company should
consider reducing the exercise price of options granted to employees under the
Company's 1989 Employee Stock Option Plan on a case-by-case basis.
11
<PAGE>
Business Consulting Agreement
Since 1996 Norman Reitman, a Director of the Company has been retained by
the Company as a part-time business consultant. Mr. Reitman is entitled to
receive a consulting fee of $50,000 per year, less any fees received by Mr.
Reitman as either a director of the Company or for serving on any committee of
the Board of Directors. During the fiscal year ended February 28, 1997, Mr.
Reitman received consulting fees of $37,500. The consulting agreement is
terminable at any time by the Company.
Officer Loans
During Fiscal 1997, Zvi (Harry) Kurtzman, Arthur J. Schwartz, Ph.D. and
Cipora Kurtzman Lavut were indebted to the Company for the loans described
below. These were interest bearing at a rate of 9% and were fully collateralized
by a combination of stock and a certificate of deposit. They were made in the
second and third quarters of Fiscal 1997. Repayment started in the third
quarter and by January 8, 1997 the Company was repaid in full for both principal
and interest. The loans were approved and ratified by all disinterested board
members.
The Company loaned Ms. Lavut $131,000 during the second quarter and an
additional $682,055 during the third quarter. In the fourth quarter the entire
principal amount plus interest was fully paid. Ms. Lavut is a Senior Vice
President of the Company and a member of the Board of Directors.
The Company loaned Dr. Schwartz $180,000 during the second quarter of
Fiscal 1997 and an additional $95,000 during the third quarter. In the fourth
quarter the entire principal amount plus interest was fully paid. Dr. Schwartz
is the Executive Vice President of the Company and is a member of the Board of
Directors.
The Company loaned Mr. Kurtzman $59,000 during the second quarter of fiscal
1997 and an additional $425,285 during the third quarter. Also during the third
quarter Mr. Kurtzman paid back $6,000 of the loan. In the fourth quarter the
remaining balance of the principal amount plus interest was fully paid. Mr.
Kurtzman is the Chief Executive Officer of the Company and Chairman of the
Board.
Aura-Dewan Joint Venture
Ashok Dewan, a nominee for director, is the Chairman and principal
shareholder of K&K Enterprises of India ("K&K"). In 1995, the Company entered
into an agreement with K&K for the formation of a joint venture to manufacture
and sell speakers using Aura's proprietary technology. K&K acquired a license to
the Company's technology and granted an exclusive sub-license to the joint
venture. The joint venture ("Dewan-Aura") has the exclusive right to build and
sell speakers using Aura's technology in the Republic of Taiwan, Indian
Subcontinent, Middle East and the European market. The Company owns 49% of the
joint venture. As consideration for the license, the Company will receive a
$1,000,000 fee, $400,000 of which was received in Fiscal 1996. The joint
venture began shipping product in late 1995.
In 1995 the Company also entered into an agreement with K&K for the
formation of a joint venture to manufacture Aura's Bass Shaker/TM/. The joint
venture, established to operate and manufacture within India, is owned 49% by
the Company. In connection with the agreement, Aura granted K&K an exclusive
license to use Aura's patented and proprietary technology. As consideration for
the license to K&K, the Company is entitled to receive license fee payments
quarterly over the life of the patent. Scheduled payments for the first five
years total approximately $2.9 million, of which $500,000 was received in Fiscal
1996.
Without any changes to its terms, the two joint ventures were merged in
fiscal 1996 into one joint venture encompassing both. The new venture was
renamed Dewan Aura.
K&K Enterprises Auragen/TM/ Agreement
In February 1997, the Company entered into a license agreement with K&K to
commercialize the AuraGen/TM/ in the Indian, Nepal, Sri Lanka and Bangladesh
markets. The license agreement calls for a license fee of $3,500,000 to be paid
in payments over a 24 month period starting in June 1997 and a fixed per unit
royalty for every unit build and shipped in the licensed territory after
December 1998. Furthermore, all units will be identified on the product by an
Aura trademark ("AuraGen"). Royalty payments per unit will be on a scheduled
basis every quarter after December 1, 1998.
12
<PAGE>
COMPENSATION COMMITTEE REPORT
Following the Annual Meeting of Shareholders on August 17, 1993, the Board
of Directors appointed a Compensation Committee (the "Committee"), consisting of
two outside directors who are not employees or former employees of the Company.
The Committee approves salary practices for the Chief Executive Officer, sets
performance objectives and establishes the compensation of the Chief Executive
Officer. The compensation of other executive officers is reviewed by and set by
the Chief Executive Officer, after review and consultation with the Committee.
Decisions regarding executive compensation for the fiscal year ended
February 28, 1997 were made by the Company's Chief Executive Officer after
consultation with the Compensation Committee. The Company's policy in
compensating executive officers is to establish methods and levels of
compensation that will provide strong incentives to promote the profitability
and growth of the Company and reward superior performance. Compensation of
executive officers includes salary, as well as stock-based programs. During
Fiscal 1997, salary accounted for all the executive officers' direct
compensation and no stock awards were granted. The Board believes that
compensation of the Company's key executives should be sufficient to attract and
retain highly qualified personnel and also provide meaningful incentives for
measurably superior performance. The Company has required significant capital
infusions to fund major expansion of its operations. As a result, the Company
places special emphasis on equity-based compensation, particularly in the form
of options, to preserve its cash for operations. This approach also serves to
match the interests of the executive officers with the interest of the
shareholders. The Company seeks to reward achievement of long and short-term
performance goals which are measured by improvements in revenue and the
elimination of losses and achieving net income. Special equity based awards are
designed to compensate for the achievement of superior goals in specific areas,
such as research and development or marketing.
Included in the factors considered by the Committee in setting the
compensation of the Company's Chief Executive Officer are the growth in the
Company's commercial sales, the development of commercial applications for the
Company's technology, progress towards reduced losses and the effective
allocation of capital resources. During Fiscal 1997, the Company made
significant progress in connection with its efforts to expand the commercial
applications of its technology, commercial sale of its products and progress
towards reducing losses.
Although the Company made substantial progress in the growth of its
business, Mr. Kurtzman the Chief Executive Officer, voluntarily elected to
forego any increase in his compensation for Fiscal 1997, as did Messrs. Schwartz
and Kaufman, in order to conserve the Company's working capital. Only one of the
named executive officers, Gregory Um, received an in increase in Fiscal 1997 of
15% as his prior compensation did not adequately reflect his contribution to the
Company. Cash compensation increases to other executive officers in 1997 were
granted based on individual experience, performance, and breadth of
responsibility within the Company and to maintain competitive levels. A listing
of the salary and stock options granted to the Chief Executive Officer and for
the most highly compensated executive officers can be found in the Summary
Compensation Table.
Committee Members
-----------------
Norman Reitman
Harvey Cohen
13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of outside directors Messrs. Norman
Reitman and Harvey Cohen. Decisions regarding compensation of executive
officers for the fiscal year ended February 28, 1997 were made by Zvi Kurtzman,
President of the Company, after review and consultation with the Committee.
Decisions regarding option grants under the 1989 Option Plan for the fiscal year
ended February 28, 1997 are made by the Option Committee, which consists of
individuals who are not members of the Board of Directors or affiliated with the
Company, after recommendations by Mr. Kurtzman. There were no options granted
under this Plan in Fiscal 1997.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and beneficial
owners of more than ten percent of the Common Stock, to file with the Securities
and Exchange Commission and the National Association of Securities Dealers, Inc.
reports of ownership and changes in ownership of the Common Stock. Copies of
such reports are required to be furnished to the Company. Based solely on its
review of the copies of such reports furnished to the Company, or written
representations that no reports were required, the Company believes that during
its fiscal year ended February 28, 1997, all filing requirements applicable to
its officers, directors, and ten percent beneficial owners were satisfied.
14
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return of the
Company with the cumulative total return on the NASDAQ Stock Market Index (U.S.)
and the S & P High Tech Composite Index. The comparisons in the graph are
required by the Securities and Exchange Commission and are not intended to
forecast or be indicative of possible future performance of the Company's common
stock.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG AURA SYSTEMS, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE S&P TECHNOLOGY SECTOR INDEX
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Cumulative Total Return
-------------------------------------------------
2/92 2/93 2/94 2/95 2/96 2/97
<S> <C> <C> <C> <C> <C> <C>
Aura Systems, Inc. AURA 100 42 77 38 60 30
NASDAQ STOCK MARKET (U.S.) INAS 100 106 126 128 178 212
S&P TECHNOLOGY SECTOR ITES 100 104 127 148 218 299
</TABLE>
15
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and beneficial
owners of more than ten percent of the Common Stock, to file with the Securities
and Exchange Commission and the National Association of Securities Dealers, Inc.
reports of ownership and changes in ownership of the Common Stock. Copies of
such reports are required to be furnished to the Company. Based solely on its
review of the copies of such reports furnished to the Company, or written
representations that no reports were required, the Company believes that during
its fiscal year ended February 28, 1997, all filing requirements applicable to
its officers, directors, and ten percent beneficial owners were satisfied.
The Board of Directors of the Company recommends that the Shareholders vote
"FOR" election of the 11 nominees for director.
16
<PAGE>
PROPOSAL NO. 2
PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF iNCORPORATION TO INCREASE THE
NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE.
On July 9, 1997, the Board of Directors adopted resolutions approving an
amendment to the Company's Certificate of Incorporation to increase the number
of shares of Common Stock, $.005 par value per share, authorized for issuance
from 100,000,000 to 200,000,000 (the "Amendment"), and directing that the
Amendment be presented to the Shareholders for approval at the Company's Annual
Meeting. The Amendment to the Certificate of Incorporation is set forth as
Exhibit A to this Proxy Statement.
As of July 21, 1997, the Company had 79,630,944 shares of Common Stock
outstanding. In addition, on such date the Company had reserved for issuance
approximately 15 million shares of Common Stock for future issuance upon the
possible future conversion or exercise of outstanding warrants, options and
convertible indebtedness of the Company.
Management believes it is both necessary and appropriate to increase the
number of its authorized shares of common Stock from 100,000,000 to 200,000,000.
The increase in authorized shares will provide a source for working capital and
capital expenditure financing to maintain the Company's current and projected
rate of growth and to fund acquisitions.
At fiscal year ended February 28, 1994, ("Fiscal 1994") the Company had net
revenues of $16.4 million, with total assets and net stockholders' equity at
$37.6 million and $18 million respectively. At the end of Fiscal 1994 the
Company had approximately 33.8 million shares outstanding.
Since Fiscal 1994 the Company's business and operations have expanded, with
net revenues of $110 million for the fiscal year ended February 28, 1997
("Fiscal 1997"), and total assets and net stockholders' equity of $182 million
and $125 million respectively. During this three year period the number of full
time employees increased from 139 to more than 500, available facilities
increased from 103,000 square feet to 335,000 square feet, and property, plant
and equipment, net of depreciation, increased from $10.6 million to $43.2
million.
Because cash flow from operations during the past three fiscal years has
not been sufficient to sustain this growth, the Company has financed its growth
from external sources of financing. These sources have included, principally,
the sale of its Common Stock and private indebtedness convertible into Common
Stock. Access to conventional bank financing, although increasing, has been
limited. At February 28, 1997, the Company had approximately 79 million shares
issued and outstanding.
Management believes that current and projected cash flow from operations
and conventional bank financing and the sale of available authorized shares may
not be sufficient to sustain its projected growth. Absent an increase in the
number of authorized shares of its Common Stock, the Company may be limited in
its ability to implement its planned future growth and expansion.
For example, the Company intends to aggressively expand its product lines
and market presence in the speaker area through acquisitions of speaker
companies and increases in the
17
<PAGE>
Company's facilities and personnel. In addition, the anticipated launch of
production, distribution and marketing of the AuraGen generator will require
sizable sustained expenditures of capital in the near term. The Company
anticipates that in order to achieve its business goals, it will be required to
expend larger dollar amounts for equipment, facilities and personnel than have
been required in the past.
Limitations on working capital could impair the Company's ability to
achieve sustained growth and profitability. Therefore, management believes it is
essential that the Shareholders vote in favor of the proposal to increase the
number of authorized shares of Common Stock from 100,000,000 to 200,000,000.
Although the Company has no plans to utilize all of the increased authorized
shares which would be available if the Amendment is approved, management
believes that it is important that the Company have the flexibility to issue
additional shares without further authorization from the Shareholders. At
present, the Company has no specific plans to utilize any of the increased
authorized shares which would be available if the Amendment is approved.
If the Amendment is approved by the Shareholders, the Company will not seek
further authorization from the Shareholders prior to any issuances of common
Stock, except as may be required by law or applicable rules of the Nasdaq Stock
Market.
The holders of Common Stock have equal rights to dividends when, as and if
declared by the Board of Directors and are entitled to share ratably in all of
the assets of the Company available for distribution to holders of Common Stock
upon the liquidation, dissolution or winding up of the affairs of the Company.
Holders of Common Stock do not have preemptive rights. Holders of Common Stock
are entitled to one vote per share on all matters which Shareholders are
entitled to vote upon at all meetings of Shareholders.
The affirmative vote of the holders of shares representing a majority of
the outstanding shares on the record date is required to authorize the
Amendment.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION.
INDEPENDENT AUDITORS
Pannell Kerr Forster has been selected to serve as the Company's
independent auditors for the fiscal year ending February 28, 1998.
Representatives of Pannell Kerr Forster are expected to be present at the
meeting and will have the opportunity to make a statement if they so desire,
and will be available to respond to appropriate questions. Pannell Kerr Forster
has served as the Company's independent auditors since 1992.
ANNUAL REPORT
The Shareholders are referred to the financial information about the
Company contained in the Company's Annual Report on Form 10-K which accompanies
this Proxy Statement as the Company's Annual Report to Shareholders, including
the financial statements under Item 8, and Management's Discussion and Analysis
of Financial Condition and Results of Operation under Item 7.
MISCELLANEOUS
SHAREHOLDER PROPOSALS
Shareholder proposals complying with the applicable rules under the
Securities Exchange Act of 1934 intended to be presented at the 1998 Annual
Meeting of Shareholders must be
18
<PAGE>
received at the offices of the Company by April 15, 1998 to be considered by
Aura for inclusion in Aura's proxy statement and form of proxy relating to that
meeting. Such proposals should be directed to the attention of the Secretary,
Aura Systems, Inc., 2335 Alaska Avenue, El Segundo, California 90245.
OTHER MATTERS
Neither Aura nor any of the persons named as proxies knows of matters other
than those above stated to be voted on at the Annual Meeting. However, if any
other matters are properly presented at the meeting, it is the intention of the
persons named as proxies to vote in accordance with their judgment on such
matters, subject to direction by the Board of Directors.
The 1997 Annual Report to Shareholders accompanies this Proxy Statement,
but is not to be deemed a part of the proxy soliciting material.
WHILE YOU HAVE THE MATTER IN MIND, PLEASE COMPLETE, SIGN AND RETURN THE
ENCLOSED PROXY CARD PROMPTLY.
19
<PAGE>
EXHIBIT A
---------
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
AURA SYSTEMS, INC.
(Under Section 242 of the General Corporation Law)
AURA SYSTEMS, INC., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), does hereby
certify that:
FIRST: The name of the Corporation is AURA SYSTEMS, INC.
SECOND: The Certificate of Incorporation of the Corporation is hereby
amended by striking out Article "FOURTH" thereof in its entirety and by
substituting in lieu of said Article the following provisions:
"FOURTH". The total number of shares of stock which this corporation
is authorized to issue is: Two Hundred Million (200,000,000) shares of the par
value of $.005 each, amounting to One Million Dollars ($1,000,000.00)."
THIRD: The Amendment to the Certificate of Incorporation herein certified
has been duly adopted in accordance with the provisions of Sections 222 and 242
of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the undersigned has executed this Certificate this day
of , 1997.
---------------
--------------------------------------
Zvi (Harry) Kurtzman, Chairman of
the Board and Chief Executive Officer
ATTEST:
- ------------------------
<PAGE>
PROXY
AURA SYSTEMS, INC.
2335 ALASKA AVENUE
EL SEGUNDO, CA 90245
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Zvi (Harry) Kurtzman and Michael I. Froch as
Proxies, each with the power to appoint their substitutes and with full power to
act alone, and hereby authorizes them to represent and to vote as designated
below, all shares of common Stock of Aura Systems, Inc. held of record by the
undersigned on July 21, 1997, at the Annual Meeting of Shareholders to be held
on September 17, 1997, including any adjournments or continuances thereof.
1. Election of Directors
[_] FOR all nominees listed below (except as marked to the contrary below)
[_] WITHHOLD AUTHORITY to vote for all nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual nominee strike a
line through the nominee's name below).
<TABLE>
<S> <C> <C> <C>
Zvi (Harry) Kurtzman Norman Reitman Neal B. Kaufman Arthur J. Schwartz
Cipora Kurtzman Lavut Harvey Cohen Salvador Diaz-Verson, Jr. Ashok Dewan
Steven C. Veen Gerald S. Papazian
</TABLE>
2. Approval of an amendment to the Certificate of Incorporation to increase the
number of shares of authorized Common Stock.
[_] FOR [_] AGAINST [_] ABSTAIN
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTOR IS MADE, THE PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2.
Dated: ___________, 1997
Please sign exactly as the name appears below. When shares
are held by joint tenants, both should sign. When signing
as attorney, as executor, administrator, trustee or
guardian, please give full title as such. If a
corporation, please sign in full corporate name by
President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
_______________________________
Signature
_______________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
