8-K

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 19, 2009

AROTECH CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	0-23336	95-4302784
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

1229 Oak Valley Drive, Ann Arbor, Michigan	48108
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (800) 281-0356

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

SEC 873 (02/08)

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Item 3.02 Unregistered Sales of Equity Securities.

See description of transactions under Item 5.02.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(a)         On April 19, 2009, Arotech Corporation (the “Registrant”) agreed with its Chairman and Chief Executive Officer, Mr. Robert S. Ehrlich, to modify Mr. Ehrlich’s Amended and Restated Employment Agreement. Under the terms of Mr. Ehrlich’s employment agreement, the Registrant was obligated to pre-fund Mr. Ehrlich’s severance agreement into a trust, in cash. The Registrant is not currently in compliance with this obligation. By agreement with Mr. Ehrlich, the Registrant will fund $240,000 of Mr. Ehrlich’s severance package in shares of the Registrant’s stock rather than in cash, to be held in a trust until such time as Mr. Ehrlich shall be entitled to payment of his severance package pursuant to the terms of his employment agreement.

Based on the closing price of the Registrant’s stock ($0.73) on the Nasdaq Stock Market on April 17, 2009 (the date on which the Registrant’s Board of Directors and Mr. Ehrlich agreed to this arrangement), it was agreed that a total of 328,767 shares would be issued and given over to the trust, to remain there until such time as Mr. Ehrlich shall be entitled to his severance package pursuant to the terms of his employment agreement. The economic risk of gain or loss on these shares is to be borne by Mr. Ehrlich. Should Mr. Ehrlich leave the Registrant’s employ under circumstances in which he is not entitled to his severance package (primarily, termination for Cause as defined in his employment agreement), these shares would be returned to the Registrant for cancelation.

The foregoing description is modified in its entirety by reference to the terms of the letter agreement dated April 19, 2009 between Mr. Ehrlich and the Registrant, a copy of which is filed as Exhibit 10.1 hereto.

(b)         On April 19, 2009, Arotech Corporation (the “Registrant”) agreed with its President and Chief Operating Officer, Mr. Steven Esses, to modify Mr. Esses’s Amended and Restated Employment Agreement. Under the terms of Mr. Esses’s employment agreement, the Registrant was obligated to pre-fund Mr. Esses’s severance agreement into a trust, in cash. The Registrant is not currently in compliance with this obligation. By agreement with Mr. Esses, the Registrant will fund $200,000 of Mr. Esses’s severance package in shares of the Registrant’s stock rather than in cash, to be held in a trust until such time as Mr. Esses shall be entitled to payment of his severance package pursuant to the terms of his employment agreement.

Based on the closing price of the Registrant’s stock ($0.73) on the Nasdaq Stock Market on April 17, 2009 (the date on which the Registrant’s Board of Directors and Mr. Esses agreed to this arrangement), it was agreed that a total of 273,973 shares would be issued and given over to the trust, to remain there until such time as Mr. Esses shall be entitled to his severance package pursuant to the terms of his employment agreement. The economic risk of gain or loss on these shares is to be borne by Mr. Esses. Should Mr. Esses leave the Registrant’s employ under circumstances in which he is not entitled to his severance package (primarily, termination for Cause as defined in his employment agreement), these shares would be returned to the Registrant for cancelation.

The foregoing description is modified in its entirety by reference to the terms of the letter agreement dated April 19, 2009 between Mr. Esses and the Registrant, a copy of which is filed as Exhibit 10.2 hereto.

Item 9.01 Financial Statements and Exhibits.

As described above, the following Exhibits are furnished as part of this Current Report on Form 8-K:

Exhibit Number	Description
10.1	Amendment letter dated April 19, 2009 between the Registrant, Electric Fuel Ltd. and Robert S. Ehrlich
10.2	Amendment letter dated April 19, 2009 between the Registrant, Electric Fuel Ltd. and Steven Esses

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:                       April 20, 2009	AROTECH CORPORATION
	(Registrant)
		/s/ Robert S. Ehrlich
		Name:	Robert S. Ehrlich
		Title:	Chairman and CEO

  - 2 -

EX-10.1

	Arotech Corporation 1229 Oak Valley Drive Ann Arbor, Michigan 48108 Tel:  (800) 281-0356   Fax:  (734) 761-5368 http://www.arotech.com Nasdaq Global Market: ARTX Writer’s direct dial: +972-2-990-6618 Writer’s direct fax: +972-2-990-6688 Writer’s e-mail: esses@arotech.com
Steven Esses President and Chief Operating Officer

April 19, 2009

Mr. Robert S. Ehrlich

c/o Arotech Corporation

1229 Oak Valley Road

Ann Arbor, Michigan 48108

Dear Bob:

Re:           Your Employment Agreement dated April 15, 2007

In connection with your Fourth Amended and Restated Employment Agreement with Arotech Corporation and Electric Fuel (E.F.L.) Ltd. (collectively, the “Company”) dated April 15, 2007 (the “Agreement”), as amended, we wish to amend the Agreement in certain respects. All capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Agreement.

Section 7(b)(ii) of the Agreement requires us to fund into the Account the entire Retirement Payment of $1,625,400. We acknowledge that we have not done so. You have informed us that you will allow us to pay $240,000 of the Retirement Payment into the Account by issuing in your name 328,767 shares of our common stock (the “Shares”), such Shares being valued for this purpose at the closing price of our common stock on the Nasdaq Stock Market on April 17, 2009, which was $0.73 per share. The Shares will be held by us or our nominee in trust for you and will be either released to you or returned to us at the same time and under the same circumstances as the other funds in the Account; provided, however, that the issuance to you of the Shares will fulfill the obligation of the Company to deposit $240,000 into the Trust irrespective of any changes in the value of the Shares from this day forward. For the avoidance of doubt, we hereby specifically clarify that the Shares will be returned to us in the event that you are terminated for Cause.

In all other respects, the terms of the Agreement will govern the relationship between us.

If the foregoing is acceptable to you, kindly sign this letter in the space provided for your signature below, whereupon this letter will become a binding amendment to the Agree­ment.

Sincerely yours,

AROTECH CORPORATION

By:  _______________________________

Steven Esses

President and Chief Operating Officer

ELECTRIC FUEL (E.F.L.) LTD.

By:  _______________________________

Steven Esses

Chairman

ACCEPTED AND AGREED:

____________________________________

                Robert S. Ehrlich

EX-10.2

	Arotech Corporation 1229 Oak Valley Drive Ann Arbor, Michigan 48108 Tel:  (800) 281-0356   Fax:  (734) 761-5368 http://www.arotech.com Nasdaq Global Market: ARTX Writer’s direct dial: +972-2-990-6612 Writer’s direct fax: +972-2-990-6688 Writer’s e-mail: ehrlich@arotech.com
Robert S. Ehrlich Chairman and Chief Executive Officer

April 19, 2009

Mr. Steven Esses

c/o Arotech Corporation

1229 Oak Valley Road

Ann Arbor, Michigan 48108

Dear Steven:

Re:           Your Employment Agreement dated April 14, 2008

In connection with your Amended and Restated Employment Agreement with Electric Fuel (E.F.L.) Ltd. (the “Company”) dated April 14, 2008 (the “Agreement”), as amended, we wish to amend the Agreement in certain respects. All capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Agreement.

Section 7(b)(iv) of the Agreement requires us to fund into the Trust the entire Base Termination Pay of approximately $360,000. We acknowledge that we have not done so. You have informed us that you will allow us to pay $200,000 of the Retirement Payment into the Trust by issuing in your name 273,973 shares of our common stock (the “Shares”), such Shares being valued for this purpose at the closing price of our common stock on the Nasdaq Stock Market on April 17, 2009, which was $0.73 per share. The Shares will be held by us or our nominee in trust for you and will be either released to you or returned to us at the same time and under the same circumstances as the other funds in the Trust; provided, however, that the issuance to you of the Shares will fulfill the obligation of the Company to deposit $200,000 into the Account irrespective of any changes in the value of the Shares from this day forward. For the avoidance of doubt, we hereby specifically clarify that the Shares will be returned to us in the event that you are terminated for Cause.

In all other respects, the terms of the Agreement will govern the relationship between us.

If the foregoing is acceptable to you, kindly sign this letter in the space provided for your signature below, whereupon this letter will become a binding amendment to the Agree­ment.

Sincerely yours,

ELECTRIC FUEL (E.F.L.) LTD.

By:  _______________________________

Ronen Badichi

General Manager

AROTECH CORPORATION

By:  _______________________________

Robert S. Ehrlich

Chairman and Chief Executive Officer

ACCEPTED AND AGREED:

____________________________________

                Steven Esses