Sec Form 5 Filing - SHEN AVIHAI @ AROTECH CORP - 2005-12-31

FORM 5 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person SHEN AVIHAI 2. Issuer Name and Ticker or Trading Symbol AROTECH CORP [ ARTX] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner X __ Officer (give title below) _____ Other (specify below) V.P. Finance (CFO) (Last) (First) (Middle) C/O AROTECH CORPORATION, 334 INDUSTRY DRIVE 3. Date of Earliest Transaction (MM/DD/YY) 12/31/2005 (Street) AUBURN, AL36832 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) __ X __ Form filed by One Reporting Person _____ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 40,500 D

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares STOCK OPTION (RIGHT TO BUY) $ 1.34 09/26/2000 I V 3,000 08/30/2001 10/15/2014 COMMON STOCK 3,000 $ 0 3,000 D STOCK OPTION (RIGHT TO BUY) $ 1.34 09/26/2000 I V 3,000 08/30/2002 10/15/2014 COMMON STOCK 3,000 $ 0 3,000 D STOCK OPTION (RIGHT TO BUY) $ 1.66 12/31/2001 I V 9,500 04/30/2002 10/15/2014 COMMON STOCK 9,500 $ 0 9,500 D STOCK OPTION (RIGHT TO BUY) $ 1.3 10/30/2001 I V 2,719 12/31/2001 10/15/2014 COMMON STOCK 2,719 ( 1 ) 2,719 D STOCK OPTION (RIGHT TO BUY) $ 1.11 06/05/2002 I V 4,800 10/30/2002 10/15/2014 COMMON STOCK 4,800 $ 0 4,800 D STOCK OPTION (RIGHT TO BUY) $ 1.11 06/05/2002 I V 3,600 10/30/2003 10/15/2014 COMMON STOCK 3,600 $ 0 3,600 D STOCK OPTION (RIGHT TO BUY) $ 1.11 06/05/2002 I V 3,600 10/30/2004 10/15/2014 COMMON STOCK 3,600 $ 0 3,600 D STOCK OPTION (RIGHT TO BUY) $ 1.42 04/01/2002 I V 8,153 04/01/2002 10/15/2014 COMMON STOCK 8,153 ( 1 ) 8,153 D STOCK OPTION (RIGHT TO BUY) $ 0.73 07/01/2002 I V 8,153 07/01/2002 10/15/2014 COMMON STOCK 8,153 ( 1 ) 8,153 D STOCK OPTION (RIGHT TO BUY) $ 0.85 10/01/2002 I V 8,153 10/01/2002 10/15/2014 COMMON STOCK 8,153 ( 1 ) 8,153 D STOCK OPTION (RIGHT TO BUY) $ 0.61 01/01/2003 I V 12,476 01/01/2003 10/15/2014 COMMON STOCK 12,476 ( 1 ) 12,476 D STOCK OPTION (RIGHT TO BUY) $ 0.43 02/24/2003 I V 40,000 01/01/2004 10/15/2014 COMMON STOCK 40,000 $ 0 5,000 D STOCK OPTION (RIGHT TO BUY) $ 0.43 02/24/2003 I V 40,000 01/01/2005 10/15/2014 COMMON STOCK 40,000 $ 0 40,000 D STOCK OPTION (RIGHT TO BUY) $ 0.85 07/09/2003 I V 20,000 12/30/2003 10/15/2014 COMMON STOCK 20,000 $ 0 20,000 D STOCK OPTION (RIGHT TO BUY) $ 0.85 07/09/2003 I V 20,000 07/09/2004 10/15/2014 COMMON STOCK 20,000 $ 0 20,000 D STOCK OPTION (RIGHT TO BUY) $ 0.85 07/09/2003 I V 40,000 01/01/2005 10/15/2014 COMMON STOCK 40,000 $ 0 40,000 D STOCK OPTION (RIGHT TO BUY) $ 0.85 07/09/2003 I V 40,000 05/01/2005 10/15/2014 COMMON STOCK 40,000 $ 0 40,000 D STOCK OPTION (RIGHT TO BUY) $ 1.28 10/13/2003 I V 48,750 10/13/2003 10/15/2014 COMMON STOCK 47,500 $ 0 47,500 D STOCK OPTION (RIGHT TO BUY) $ 1.28 10/13/2003 I V 47,500 07/09/2004 10/15/2014 COMMON STOCK 47,500 $ 0 47,500 D STOCK OPTION (RIGHT TO BUY) $ 1.28 10/13/2003 I V 47,500 07/09/2004 10/15/2014 COMMON STOCK 47,500 $ 0 47,500 D STOCK OPTION (RIGHT TO BUY) $ 1.28 10/13/2003 I V 47,500 06/09/2005 10/15/2014 COMMON STOCK 47,500 $ 0 47,500 D STOCK OPTION (RIGHT TO BUY) $ 1.28 10/13/2003 I V 142,500 06/30/2005 10/15/2014 COMMON STOCK 142,500 $ 0 142,500 D STOCK OPTION (RIGHT TO BUY) $ 1.2 08/09/2004 I V 6,250 08/09/2004 10/15/2014 COMMON STOCK 6,250 $ 0 6,250 D STOCK OPTION (RIGHT TO BUY) $ 1.2 08/09/2004 I V 6,250 08/09/2004 10/15/2014 COMMON STOCK 6,250 $ 0 6,250 D STOCK OPTION (RIGHT TO BUY) $ 1.2 08/09/2004 I V 6,250 08/09/2004 10/15/2014 COMMON STOCK 6,250 $ 0 6,250 D

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other SHEN AVIHAI C/O AROTECH CORPORATION 334 INDUSTRY DRIVE AUBURN, AL36832 V.P. Finance (CFO) Signatures /s/ Avihai Shen 02/14/2006 Signature of Reporting Person Date

Explanation of Responses:

( 1 )Between May 2001 and December 2002, Mr. Shen agreed to forego, each month, part of his base salary in exchange for, each month, options to purchase stock of the issuer, at a rate of 2.5 op-tions for each dollar of salary, on the terms specified above.

Remarks: Mr. Shen is not the CFO of Arotech as of the date of signing this form.

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).

** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).

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