SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

 

 

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		Number of Shares Percent of
Name of Beneficial Owner (1)		Beneficially Owned (2)		Common Stock (2)
Haim Tsuff, Chairman and CEO		1,354,041(3)		49.82%
Jackob Maimon, President and		38,819		1.43%
Director
Doron Avraham, Vice President (4)		--		*
Yossi Levy, Israeli Branch Manager		--		*
Max Pridgeon, Director		--		*
Donald L. Lovell, Director (5)		--		*
Frans Sluiter, Director		--		*
Michelle R. Cinnamon (6)		--		--
All directors and
officers as a group (7 persons)		1,392,860		51.25%

 

EXECUTIVE COMPENSATION

 

 

DIRECTOR COMPENSATION:

 

The following table sets forth information concerning the compensation of our directors for the fiscal year ended December 31, 2007:

 

		FEES
		EARNED
		OR PAID				OPTION
		IN CASH				AWARDS				TOTAL
NAME (1)		($)				($)(2)				($)
Donald Lovell (1)		$	5,250				--			$	5,250
Max Pridgeon		$	5,250				--			$	5,250
Frans Sluiter		$	5,250				--			$	5,250

 

1. Mr. Lovell died in February 2008.

 

INFORMATION RELATING TO EXECUTIVE OFFICERS WHO ARE NOT DIRECTOR NOMINEES

 

The following individuals are not directors or director nominees, but served as executive officers of the Company or its subsidiaries during 2007.

 

NAME	AGE	POSITION
Edy Francis	31	Chief Financial Officer
Yossi Levy	55	Branch Manager, Israel Branch

 

 

 

PROPOSAL NO. 1

ELECTION OF DIRECTORS

 

The Board of Directors of the Company currently consists of five (5) members. The persons named below have been nominated by the Board of Directors for election to hold office until the next annual meeting and until their successors are elected and have been qualified.

 

 

NAME	AGE	POSITION
Haim Tsuff	51	Chairman of the Board, Chief Executive
		Officer and Director
Jackob Maimon	52	President, Director
Max Pridgeon	40	Director
Frans Sluiter	40	Director
Michelle R. Cinnamon
Flores	33	Director

 

 

Haim Tsuff has been a director of the Company since January 1996 and the Chairman of the Board of Directors and Chief Executive Officer since May 1996. Mr. Tsuff is the sole director and owner of United Kingsway Ltd. and Chairman of YHK General Manager Ltd. (which entity effectively controls Equital Ltd., JOEL, Naphtha and Naphtha Holdings Ltd.) and may be deemed to control the Company.

 

Jackob Maimon has been President of the Company since November 1999. Mr. Maimon is the Chairman of the Board of Directors of Naphtha Israel Petroleum Corporation Ltd. ("Naphtha"), an Israeli entity, which holds indirectly through Naphtha Holdings, Ltd., another Israeli entity, approximately 48.4% of the issued and outstanding stock of the Company. Mr. Maimon has held the position at Naphtha since August 1996.

 

Max Pridgeon has been a director of the Company since April 2001. Since December 2002, Mr. Pridgeon has served as a director and executive officer of Griffin Decorations, a business which he founded. From March 1995 through December 2002, he served as director of MAXIM Wholesale and Marketing Co., a company which he founded. Concurrently, from February 1999, Mr. Pridgeon has also served as a manager of sales for Europe and the Middle East for Blenfin XI, Netherlands, a company that engages in the distribution of wooden picture frames. From April 1996 through January 1999, Mr. Pridgeon served as a property acquisitions consultant to M.A. Realistic Estate, Netherlands, a company engaged in the ownership and management of hotels in the Netherlands. From September 1989 through March 1995, Mr. Pridgeon served as account manager and then export manager at VERNO Holland, a company engaged in the marketing and distribution of oil paintings.

 

Frans Sluiter has been a director since December 12, 2006. Mr. Sluiter will also serve on the Company's audit committee. Mr. Sluiter, age 39, has over 15 years' experience successfully bringing business solutions to fortune 500 companies worldwide. He has held several senior management positions where he managed and delivered complex system implementation projects for clients in Europe, the Middle East, South America, and the U.S. From January 1, 2006 to the present time, he has been a managing partner of Singularity LLC, a Dallas based entity engaged in IT Services. From November 2004 to January 2006, he was senior vice president responsible for sales and delivery at Intelligroup, a New Jersey based company engaged in IT Consulting Services. From March 2003 to October 2004, Mr. Sluiter served as a Program Director at Intelligroup. From July 2000 to February 2003, he was Senior Project Manager for AtosOrigin in Saudi Arabia.

 

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Michelle R. Cinnamon Flores was appointed to the Company's Board of Directors on February 11, 2008. Since March 2007, been serving as Assistant Vice President of Finance for a private company engaged in property management. Previous to that position, from July 2005 to March 2007, she was Controller, Human Resources, for Stevens Hospitality, where she was primarily responsible for cash management and financial statement preparation. Between October 2003 and July 2005, she was at Emporio Turistico where she served as General Manager. Ms. Flores replaced Mr. Donald Lovell, who died in February 2008.

 

All officers serve until the next annual meeting of directors and until their successors are elected and qualified. There are no family relationships between any of the above director nominees, and there is no arrangement or understanding between any of the above director nominees and any other person pursuant to which he was selected as a director nominee.

 

INFORMATION ABOUT THE BOARD OF DIRECTORS

 

INDEPENDENCE AND MEETINGS

 

 

The Board does not have a formal policy with respect to Board members attendance at annual stockholder meetings, though it encourages directors to attend such meetings. None of the directors attended the 2007 annual meeting.

 

The Board of Directors reviewed the independence of each of the Company's directors in April 2008 on the basis of the standards adopted by Nasdaq. During this review, the Board considered transactions and relationships between the Company, on the one hand, and each director, members of his or her immediate family, and other entities with which he or she is affiliated, on the other hand. The purpose of this review was to determine which of such transactions or relationships were inconsistent with a determination that the director is independent under the Nasdaq rules. As a result of this review, the Board of Directors affirmatively determined that each of the Company's directors other than Messrs, Haim Tsuff and Jackob Maimon are "independent directors" within the meaning of the Nasdaq rules.

 

BOARD COMMITTEES

 

The Board of Directors has established three standing committees: the audit committee (the "Audit Committee"); the compensation committee (the "Compensation Committee"); and the nominating committee (the "Nominating Committee").

 

AUDIT COMMITTEE

 

The members of the Audit Committee are Max Pridgeon, Frans Sluiter and, as of February 11, 2008, Michelle R. Cinnamon Flores. Until his death in February 2008, Mr. Donald D. Lovell served on the audit committee. The Board of Directors has determined that each of Messrs. Pridgeon and Sluiter and Ms. Flores meet the independence criteria set out in Rule 4200(a)(14) of the Marketplace Rules of the National Association of Securities Dealers ("NASD"). Mr. Lovell was the chairman of the Audit Committee until his death in February 2008. The Board has determined that Ms. Floers is an "audit committee financial expert" as defined by the rules of the SEC. The Audit Committee met five times in 2007.

 

The Board has adopted a charter governing the duties and responsibilities of the Audit Committee. A copy of the Audit Committee charter is filed as Annex A to this Proxy Statement. The principal function of the Audit Committee is to assist the Board in its oversight responsibilities relating to the financial accounting, reporting and controls. The Audit Committee monitors and evaluates periodic reviews of the adequacy of the accounting and financial reporting processes and systems of internal control that are conducted by senior management and the independent auditors, is directly responsible for the appointment, compensation and oversight of the work of the Company's independent auditors, reviews and evaluates the qualifications, independence and performance of the independent auditors, monitors the Company's compliance with legal and regulatory requirements, monitors the performance of internal audit function and facilitates communication among independent auditors, senior management and the Board.

 

THE NOMINATING COMMITTEE

 

In April 2004, the Board of Directors formed the Nominating Committee to address Board development matters. The current members of the Nominating Committee are _ Frans Sluiter _ and Max Pridgeon. The Nominating Committee did not meet in 2007. The Board has adopted a charter governing the duties and responsibilities of the Nominating Committee and a copy of such charter is attached The duties of the Nominating Committee are fully set forth in the charter adopted by that committee, a copy of which was included as Annex B to this Proxy Statement.

 

The Nominating Committee will consider many factors when evaluating candidates for the nomination to the Board of Directors, with the goal of fostering a Board of Directors comprised of directors with a variety of experience and backgrounds. Important factors that will be considered as part of the Nominating Committee's evaluation include (without limitation) diversity, skill, specialized expertise, experience, business acumen, understanding of strategy and policy-setting. Depending upon the Company's then-current needs, certain factors may be weighed more or less heavily. In considering candidates for the Board of Directors, the Nominating Committee will consider the entirety of each candidate's credentials and does not have any specific minimum qualifications that must be met. However, the Nominating Committee does believe that all members of the Board of Directors should have the highest character and integrity and sufficient time to devote to Company matters.

 

The Nominating Committee will consider persons recommended by stockholders as candidates for nomination as a director. In evaluating such nominations, the Nominating Committee will use the same selection criteria the Nominating Committee uses to evaluate other potential nominees. Recommendations should be submitted to the Secretary of the Company. Each recommendation should include a personal biography of the suggested candidate, an indication of the background or experience that qualifies such person for consideration, and a statement that such person has agreed to serve if nominated and elected. Stockholders who wish to nominate a person for election to the Board of Directors themselves, rather than recommending a candidate to the Nominating Committee for potential nomination by the Board of Directors, must comply with applicable law.

 

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COMPENSATION COMMITTEE

 

In April 2004, the Board of Directors formed the Compensation Committee, which is responsible for reviewing the compensation arrangements in effect for the Company's executive officers. The Compensation Committee currently consists of Frans Sluiter and Max Pridgeon. The Board of Directors has determined that Messrs. Sluiter and Pridgeon meet the independence criteria set out in the NASD's Marketplace Rule 4200(a)(14). Mr. Pridgeon is the Chairman of the Compensation Committee. The Compensation Committee did not meet in 2007 but acted by unanimous written consent on two occasions.

 

The principal functions of the Compensation Committee are to review the Company's incentive compensation programs for executive officers and approve the annual compensation for executive officers.

 

CODE OF BUSINESS ETHICS AND CONDUCT

 

The Company has adopted a Code of Business Ethics and Conduct (the "Code of Conduct") that applies to all of its employees. A copy of the Code of Conduct has been filed as an exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2005. If the Company makes any substantive amendment to the Code of Conduct or grants any waiver from a provision of the Code of Conduct to any executive officer or director, the Company will promptly disclose the nature of the amendment or waiver.

 

 

 

 

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PROPOSAL NO. 2

 

RATIFICATION OF APPOINTMENT OF MALONE & BAILEY, PC

 

AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTING FIRM

 

FOR THE YEAR ENDING DECEMBER 31, 2006

 

The Audit Committee has selected Malone & Bailey, PC ("M&B") as the Company's independent public accounting firm for the year ending December 31, 2008. The Board has directed that such appointment be submitted for ratification by the shareholders at the Annual Meeting.

 

It is anticipated that a member of M&B will be present at the Annual Meeting and will be available to respond to questions.

 

 

FEES

 

The following table presents fees for professional audit services rendered by M&B for the audit of the Company's annual financial statements for fiscal years 2007 and 2006 and fees billed for other services rendered during 2007 and 2006.

 

Type of Service/Fee		Fiscal 2007a				Fiscal 2006
Audit Fees (1)		$	230,000			$	89,500
Audit Related Fees (2)			--				--
Tax Fees (3)		$	20,000			$	25,000
All Other Fees (4)			--				--

 

(1) Audit Fees consist of fees for professional services rendered for the audit of the Company's consolidated financial statements included in its Annual Report on Form 10-K and the review of the interim financial statements included in its Quarterly Reports on Form 10-Q, and for the services that are normally provided in connection with regulatory filings or engagements.

 

(2) Includes fees associated with assurance and related services that are reasonably related to the performance of the audit or review of the Company's financial statements. This category includes fees related to consultation regarding generally accepted accounting principles.

 

(3) Tax Fees consist of fees for tax compliance, tax advice and tax planning.

 

 

The Audit Committee reviewed the non-audit services rendered for fiscal 2007 and fiscal 2006 as set forth in the above table and concluded that such services were compatible with maintaining the public accounting firm's independence. The Audit Committee's policy is to pre-approve all audit services and all non-audit services that Company's independent public accounting firm is permitted to perform for Company under applicable federal securities regulations. As permitted by the applicable regulations, the Audit Committee's policy utilizes a combination of specific pre-approval on a case-by-case basis of individual engagements of the independent public accounting firm and general pre-approval of certain categories of engagements up to predetermined dollar thresholds that are reviewed annually by the Audit Committee. Specific pre-approval is mandatory for the annual financial statement audit engagement, among others.

 

BOARD RECOMMENDATION

 

 

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OTHER MATTERS

 

 

STOCKHOLDER PROPOSALS

 

 

ANNUAL REPORT

 

Enclosed is the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007. This Annual Report on Form 10-K does not form any part of the material for the solicitation of proxies.

 

SOLICITATION OF PROXIES

 

The Company will pay the cost of the solicitation of proxies. Solicitation of proxies may be made in person or by mail, telephone, or telecopy by directors, officers, and employees of the Company. The Company may also engage the services of others to solicit proxies in person or by telephone or telecopy. In addition, the Company may also request banking institutions, brokerage firms, custodians, nominees, and fiduciaries to forward solicitation material to the beneficial owners of Common Stock held of record by such persons, and the Company will reimburse such persons for the costs related to such services.

 

It is important that your shares be represented at the Annual Meeting. If you are unable to be present in person, you are respectfully requested to sign the enclosed proxy and return it in the enclosed stamped and addressed envelope as promptly as possible.

 

BY ORDER OF THE BOARD OF DIRECTORS

 

Haim Tsuff

 

Chairman of the Board

 

Chief Executive Officer

 

 

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE

COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON JUNE 26, 2008

 

The undersigned hereby constitutes and appoints HAIM TSUFF, YOSSI LEVY AND EDY FRANCIS and each of them, with full power of substitution, attorneys and proxies to represent and to vote all the shares of common stock, par value $.001 per share, of ISRAMCO, INC. (the "Company"), that the undersigned would be entitled to vote, with all powers the undersigned would possess if personally present, at the 2008 Annual Meeting of Stockholders of the Company, to be held on June 26, 2008, and at any adjournment thereof, on the matters set forth on the reverse side and such other matters as may properly come before the meeting.

 

1. ELECTION OF DIRECTORS. Nominees: HAIM TSUFF, JACKOB MAIMON, MAX PRIDGEON,

 FRANS SLUITER AND MICHELL R. CINNAMON FLORES (Mark only one of the following boxes.)

 

|_| VOTE FOR ALL NOMINEES LISTED ABOVE, EXCEPT VOTE WITHHELD AS TO THE FOLLOWING NOMINEES (IF ANY): ______________________

 

|_| VOTE WITHHELD FROM ALL NOMINEES

 

2. PROPOSAL TO RATIFY THE APPOINTMENT OF MALONE & BAILEY, PC AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2008.

 

|_| FOR |_| AGAINST |_| ABSTAIN

 

3. In Their Discretion, Upon Any Other Business That May Properly Come Before the Meeting or Any Adjournment Thereof.

 

This proxy when properly executed will be voted in the manner directed herein by the undersigned stockholder. If no direction is made, this proxy will be voted FOR the election as directors of the nominees of the Board of Directors; FOR the ratification of the appointment of Malone & Bailey, PC as the Company's independent public accounting firm for the fiscal year ended December 31, 2008; and in the discretion of the proxies named herein on any other proposals to properly come before the Annual Meeting.

 

The undersigned acknowledges receipt of the accompanying Proxy Statement dated May 9, 2008.

 

Dated: _________________

 

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SIGNATURE OF SHAREHOLDER(S)

 

(When signing as attorney, trustee, executor, administrator, guardian, corporate officer, etc., please give full title. If more than one trustee, all should sign. Joint owners must each sign.)

 

Please date and sign exactly as name appears above.

 

I plan |_| I do not plan |_| to attend the Annual Meeting.