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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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F O R M 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of February 2003
MAGIC SOFTWARE ENTERPRISES LTD.
(Name of Registrant)
5 HaPlada Street, Or-Yehuda, Israel 60218
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F ___
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1): ___
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7): ___
Indicate by check mark whether by furnishing the information contained in
this Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ___ No X
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- ____________
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MAGIC SOFTWARE ENTERPRISES LTD.
6-K Items
1. Magic Software Enterprises Ltd. Proxy Statement for 2002 Annual
General Meeting to be held February 23, 2003.
2. Magic Software Enterprises Ltd. Proxy Card.
Item 1
MAGIC SOFTWARE ENTERPRISES LTD.
January 24, 2003
NOTICE OF 2002 ANNUAL GENERAL MEETING OF SHAREHOLDERS
Magic Software Enterprises Ltd. Shareholders:
We cordially invite you to the Annual General Meeting of Shareholders. It
will be held at 9:00 a.m. on Sunday, February 23, 2003 at our offices at 5
HaPlada Street, Or Yehuda, Israel.
The purpose of the meeting is to consider and vote upon the following
matters:
1. The election of five directors for terms expiring at the 2003 Annual
General Meeting and one outside director for a term expiring in 2005;
2. Approval of the terms of compensation for our outside directors;
3. Ratification of the appointment of Kost, Forer & Gabbay as our
independent auditors for the year ending December 31, 2002 and
authorization for the board of directors to fix their remuneration;
and
4. Receipt and consideration of our Auditor's Report, Directors' Report
and Consolidated Financial Statements for the year ended December 31,
2001.
The board of directors recommends that you vote in favor of all of the
proposals, which are described in the attached Proxy Statement.
You can vote by proxy either by mail or in person. If voting by mail, the
proxy must be received by our transfer agent or at our registered office in
Israel at least 48 hours prior to the meeting to be validly included in the
tally of ordinary shares voted at the meeting. Detailed proxy voting
instructions are provided both in the Proxy Statement and on the enclosed proxy
card.
Sincerely,
/s/David Assia
David Assia, Chairman
BY ORDER OF THE BOARD OF DIRECTORS
Amit Birk, Corporate Secretary
PROXY STATEMENT
This statement is being furnished in connection with the solicitation of
proxies on behalf of the board of directors of Magic Software Enterprises Ltd.
to be voted at the Annual General Meeting of Shareholders, or the Meeting, to be
held on Sunday, February 23, 2003 and any adjournment thereof. Shareholders will
be asked to vote upon: (i) the election of five directors for terms expiring at
the 2003 Annual General Meeting and one outside director for a term expiring in
2005; (ii) approval of the terms of compensation for our outside directors;
(iii) ratification of the appointment of Kost, Forer & Gabbay as our independent
auditors for the year ending December 31, 2002 and authorization for the board
of directors to fix their remuneration; and (iv) receipt and consideration of
our Auditor's Report, Directors' Report and Consolidated Financial Statements
for the year ended December 31, 2001. Our 2001 Annual Report on Form 20-F,
including our audited financial statements for the fiscal year ended December
31, 2001, and the proxy card enclosed with this Proxy Statement are being mailed
to shareholders on or about January 27, 2003.
Shares eligible to be voted and for which a proxy card is properly signed
and returned at least 48 hours prior to the beginning of the Meeting will be
voted as directed. If directions are not given or directions are not in
accordance with the options listed on a signed and returned proxy card, such
shares will be voted FOR each proposition for which the board of directors
recommends a vote FOR. Unsigned or unreturned proxies, including those not
returned by banks, brokers, or other record holders, will not be counted for
quorum or voting purposes. You may revoke your proxy at any time prior to the
exercise of authority granted in the proxy by giving a written notice of
revocation to our Corporate Secretary, by submitting a subsequently dated,
validly executed proxy, or by voting in person.
As of January 24, 2003, the record date for determination of shareholders
entitled to vote at the Meeting, there were outstanding 29,644,364 ordinary
shares. Each ordinary share entitles the holder to one vote. The ordinary shares
have a par value of NIS 0.1 per share. The presence of two shareholders, holding
at least one third of our share capital voting rights, represented in person or
by proxy at the Meeting, will constitute a quorum. An affirmative majority of
the votes cast is required to approve each of the proposals to be presented at
the Annual General Meeting, except Item 1 with respect to the election of Ms.
Shlomit Golan as an outside director which requires either (i) the affirmative
vote of the holders of a majority of the ordinary shares represented at the
Annual General Meeting, in person or by proxy and voting thereon, provided that
at least one third of the non-controlling shareholders represented and voting at
the Annual General Meeting are included in the majority; or (ii) that the total
shareholdings of those who have no controlling interest who vote against her
election as outside director do not represent more than 1% of the voting rights
in our company. Under the Israeli Companies Law, Item 1 with respect to the
election of Ms. Shlomit Golan as an outside director requires that our
shareholders notify us prior to the vote at the Annual General Meeting, or if
such vote is made by proxy on the proxy card, whether or not they have a
personal interest with respect to he election. The term "personal interest" is
defined as "a person's personal interest in an act or transaction of the
company, including the personal interest of his relatives and of any other
corporation in which he or his relatives is an interested party, and exclusive
of personal interest that stems from the fact of holding shares in the company."
If a shareholder fails to notify us as to whether he or she has a personal
interest in this item, the shareholder may not vote and his vote will not be
counted with respect to such item. There will be a specific place on the front
of the proxy card to indicate if you have a personal interest in Item 1 with
respect to the election of Ms. Shlomit Golan as our outside director.
A broker who is the record owner of ordinary shares beneficially owned by a
customer will have discretionary authority to vote such ordinary shares in the
election of directors and other proposals herein, if the broker has not received
voting instructions from the beneficial owner by the tenth day before the
Meeting, provided that this Proxy Statement was transmitted to the beneficial
owner at least 15 days before the Meeting. Abstentions and broker "non-votes"
are not counted in determining outcomes of matters being acted upon. They are
counted only for determining a meeting quorum. A broker "non-vote" occurs when a
nominee holding ordinary shares of our company for a beneficial owner does not
vote on a particular proposal because the nominee does not have discretionary
voting power with respect to that proposal and has not received instructions
from the beneficial owner.
We have received indications from our principal shareholder, Formula
Systems (1985) Ltd., which holds approximately 52.68% of our issued and
outstanding ordinary shares, that it presently intends to vote for all of the
nominees for director and in favor of all of the proposals to be acted upon at
the Meeting.
We will bear the cost of soliciting proxies from our shareholders. Proxies
will be solicited by mail and may also be solicited personally or by telephone
by our directors, officers and employees. We will reimburse brokerage houses and
other custodians, nominees and fiduciaries for their expenses in accordance with
the regulations of the Securities and Exchange Commission concerning the sending
of proxies and proxy material to the beneficial owners of stock.
You may vote by submitting your proxy with voting instructions by mail if
you promptly complete, sign, date and return the accompanying proxy card in the
enclosed self-addressed envelope to our transfer agent or to our registered
office in Israel at least 48 hours prior to the Meeting.
ELECTION OF DIRECTORS
(Item 1 on the Proxy Card)
Our board of directors proposes the election of Dan Goldstein, David Assia,
Gad Goldstein, Jacob Tanenbaum and Naamit Salomon as directors, to hold office
for one year until the 2003 Annual General Meeting and until their successors
are elected and qualified, and the election of Ms. Shlomit Golan as an outside
director (as defined by the Israeli Companies Law), to hold office for three
years until our Annual General Meeting of 2005 and until her successor is
elected and qualified. Each nominee is currently serving as a member of our
board of directors, except for Ms. Naamit Salomon and Ms. Shlomit Golan.
Should any of the nominees be unavailable for election, the proxies will be
voted for a substitute nominee designated by the board of directors. None of the
nominees are expected to be unavailable.
Under the Companies Law, the affirmative vote of the holders of a majority
of the ordinary shares represented at the Annual General Meeting in person or by
proxy and entitled to vote and voting thereon will be necessary for shareholder
approval of the election as directors of Dan Goldstein, David Assia, Gad
Goldstein, Jacob Tanenbaum and Naamit Salomon. The approval of the election as
an outside director of Ms. Shlomit Golan shall require the affirmative vote of
the holders of a majority of the ordinary shares represented at the Annual
General Meeting in person or by proxy and voting thereon, provided that either
(i) at least one third of the non-controlling shareholders represented and
voting at the Annual General Meeting are included in the majority; or (ii) that
the total shareholdings of the non-controlling shareholders who vote against her
election do not represent more than 1% of the voting rights in our company.
Set forth below is information about each nominee, including age,
position(s) held with our company, principal occupation, business history and
other directorships held.
Name Age Position
---- --- --------
David Assia.................. 51 Chairman of the Board of Directors
Dan Goldstein................ 48 Director
Gad Goldstein................ 43 Director
Jacob Tanenbaum.............. 45 Director
Naamit Salomon............... 38 Director
Shlomit Golan................ 52 Outside Director
Nominees For Election As Director For Terms Expiring In 2003
David Assia, a co-founder of our company, has served as a director since
our inception in 1983. He was chairman of our board of directors from 1986 until
October 2000 and served as vice chairman of our board of directors from October
2000 until reassuming the position of chairman of our board of directors in
January 2002.
2
From 1986 until September 1997, he served as our chief executive officer. Mr.
Assia has served as the chairman of the board of directors of Mashov Computers
Ltd. since 1989. Mr. Assia also serves as a director of Aladdin Knowledge
Systems Ltd., Radview Software Ltd. and Enformia Ltd. Mr. Assia holds a B.A.
degree in economics and statistics and an M.B.A. degree from Tel Aviv
University.
Dan Goldstein has served as a director of our company since April 1998 and
he served as the chairman of our board of directors from October 2000 until
January 2002. Mr. Goldstein has served as chairman of the board of directors and
chief executive officer of Formula Systems since January 1985. Mr. Goldstein is
also the chairman of the board of directors of other companies in the Formula
Systems group, including New Applicom Software Industries (1990) Ltd., and is a
director of Crystal Systems Solutions Ltd. Mr. Goldstein holds a B.A. degree in
mathematics and computer sciences and an M.B.A. degree from Tel Aviv University.
Gad Goldstein has served as a director of our company since December 1998.
Mr. Goldstein has been president of Formula Systems since April 1995. Prior
thereto and since 1985, he was vice president-finance and a director of Formula
Systems. Mr. Goldstein is also a director of other companies within the Formula
Systems group, including New Applicom Software Industries, and is chairman of
the board of directors of Crystal Systems Solutions. Mr. Goldstein holds a B.A.
degree in economics and an M.B.A. degree from Tel Aviv University. Gad Goldstein
and Dan Goldstein are brothers.
Jacob Tanenbaum has served as a director of our company since July 18,
2002. Mr. Tanenbaum is the founder and CEO of IT Net Investments Ltd., a
privately held investment company, since June 2000 and as a director of Mainsoft
Inc., a privately held company, since December 1999. Mr. Tanenbaum has served in
various management positions in several private and public companies, among them
Formula Systems (1985) Ltd., Sintec Advanced Technologies, Aman Computers, Malal
Group, Noyotec Ltd. and Sabratech Ltd. Mr. Tanenbaum holds a B.Sc. in Management
and Industrial Engineering from Tel-Aviv University.
Naamit Salomon has served as a vice president finance of Formula Systems
(1985) Ltd. since August 1997. Ms. Salomon also serves as a director of Liraz
Systems Limited, a global provider of software products and support services for
the modernization of existing information systems. Ms. Salomon holds a B.A.
degree in economics and business administration from Ben Gurion University.
Nominee For Election As An Outside Director For Term Expiring In 2005
Shlomit Golan has been nominated to serve as an outside director of our
company. Ms. Golan is currently a freelance accountant for Sotheby's Israel
Ltd., a subsidiary of Sotheby's Ltd., an international auction company, and for
Everest Funds, limited partnerships that invest in Israeli and Israeli related
companies. From 1996 until 2000, Ms. Golan served as a director of Dovrat Shrem
& Co. Investment Management LTD and in 1999 as a director of FCT Formula
Computer Technologies LTD. From 1992 until 1995, Ms. Golan served as an
accounting manager at Braude & Co. Ms. Golan holds a B.A degree in Economics and
Accounting and an Executive MBA from Tel Aviv University. She is a Certified
Public Accountant.
The Board of Directors recommends a vote FOR the election of each nominee
for Director named above.
Outside Director Continuing in Office
Yigal Berman has served as an outside director of our company since October
1997. Since 1981 he has served as vice president-finance of Intergama Investment
Ltd., an Israeli holding company. Mr. Berman serves as a director of Rapac
Electronics Ltd., an Israeli company operating in the electronics industry whose
shares are traded on the Tel Aviv Stock Exchange. Until June 1997, Mr. Berman
served as a director of Mashov Computers. Mr. Berman holds a B.A. degree in
economics and statistics and an M.B.A. degree from Tel Aviv University.
3
BOARD OF DIRECTORS AND COMMITTEES
Outside Directors
Under the Israeli Companies Law, 1999 public companies which have offered
shares to the public in or outside of Israel are required to elect two outside
directors who must meet specified standards of independence. The outside
directors may not have any economic relationship with us. Among other
limitations, controlling shareholders of a company, 25% shareholders, and their
relatives or employees cannot serve as outside directors. Outside directors are
elected by shareholders. The shareholders voting in favor of their election must
include at least one-third of the shares of the non-controlling shareholders of
the company who are present at the meeting. This minority approval requirement
need not be met if the total shareholdings of those non-controlling shareholders
who vote against their election represent 1% or less of all of the voting rights
in the company.
Outside directors serve for a three-year term, which may be renewed for
only one additional three-year term. Mr. Yigal Berman has served as an
independent director since October 1997 and was elected to serve as an outside
director for an additional period of three years until October 2003. Ms. Maya
Liquornik served as our outside director from December 2000 until her
resignation on October 20, 2002. Subject to her election by our shareholders at
this Meeting, Ms. Shlomit Golan will serve as our outside director for a period
of three years until the Annual General Meeting of Shareholders to be held in
2005 and until her successor is elected and qualified. Outside directors can be
removed from office only by the same percentage of non-controlling shareholders
as can elect them, or by a court, and then only if the outside directors cease
to meet the statutory qualifications with respect to their appointment or if
they violate their duty of loyalty to the company. If, when an outside director
is elected, all members of the board of directors of a company are of one
gender, the outside director to be elected must be of the other gender.
Any committee of the board of directors must include at least one outside
director. An outside director is entitled to compensation as provided in
regulations adopted under the Companies Law and is otherwise prohibited from
receiving any other compensation, directly or indirectly, in connection with
such service.
Audit Committee
The Israeli Companies Law provides that public companies must appoint an
audit committee, which must consist of at least three members and include all of
the company's outside directors. The chairman of the board of directors, any
director employed by the company or providing services to the company on a
regular basis, any controlling shareholder and any relative of a controlling
shareholder may not be a member of the audit committee. An audit committee may
not approve an action or a transaction with a controlling shareholder, or with
an office holder, unless at the time of approval two outside directors are
serving as members of the audit committee and at least one of the outside
directors was present at the meeting in which an approval was granted.
Messrs. Yigal Berman and Gad Goldstein currently serve on our audit
committee. Subject to her election by our shareholders at our Annual Meeting,
Ms. Shlomit Golan will qualify both as an independent director under the Nasdaq
National Market requirements and as an outside director under the Israeli
Companies Law and will be the third member of our audit committee following her
election at this Meeting. It is currently contemplated that the audit committee
will meet at least twice a year. The responsibilities of the audit committee
include: (i) finding any defects in the business management of our company, for
which purpose the audit committee may consult with our independent auditors and
internal auditor, and proposing to the board of directors ways to correct such
defects, and (ii) approving related-party transactions as required by Israeli
law.
The audit committee is authorized generally to investigate any matter
within the scope of its responsibilities and has the power to obtain from the
internal auditing unit, our independent auditors or any other officer or
employee any information that is relevant to such investigations.
4
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of January 24, 2003
regarding the beneficial ownership by (i) all shareholders known to us to own
beneficially more than 10% of our ordinary shares, (ii) each director and (iii)
all directors and executive officers as a group:
Number of Ordinary Shares Percentage of
Name Beneficially Owned (1) Ownership (2)
---- ---------------------- -------------
Formula Systems (1985) Ltd. (3)............... 15,619,215 52.68%
David Assia (4).............................. 1,319,372 4.43%
Dan Goldstein (5)............................ -- --
Gad Goldstein (5)............................ -- --
Jacob Tanenbaum.............................. -- --
Yigal Berman (6)............................. 21,000 *
All directors and executive officers as a
group (8 persons) (7)................. 1,713,461 5.67%
----------------
* Less than 1%
(1) Ordinary shares beneficially owned include shares that may be acquired
pursuant to options that are currently exercisable or which will first
become exercisable within 60 days of the record date.
(2) Based on 29,644,364 ordinary shares outstanding as of the record date.
Ordinary shares deemed beneficially owned by virtue of the right of
any person or group to acquire such shares within 60 days of the
record date are treated as outstanding only for purposes of
determining the percent owned by such person or group.
(3) The address of Formula Systems (1985) Ltd. is 3 Hagalim Boulevard,
Herzliya Pituach, Israel.
(4) Includes 136,113 ordinary shares subject to currently exercisable
options granted under our stock option plans, at an exercise price of
$1.625 per share. Such options expire in March 2011.
(5) Dan Goldstein, an officer and a director of Formula Systems (1985)
Ltd. and a director of our company, and Gad Goldstein, a director of
Formula Systems (1985) Ltd. and a director of our company, disclaim
beneficial ownership of the 15,619,215 ordinary shares held by Formula
Systems (1985) Ltd.
(6) All such 21,000 ordinary shares are subject to currently exercisable
options granted under our stock option plan, at exercise prices
between $5.00 - $10.625 per share. Such options expire in October
2011.
(7) Includes 530,202 ordinary shares issuable upon the exercise of
currently exercisable options or which will first become exercisable
within 60 days of the record date.
5
Executive Compensation
The following table sets forth all compensation we paid with respect to all
of our directors and executive officers as a group for the year ended December
31, 2001.
Salaries, fees, Pension,
commissions and retirement and
bonuses similar benefits
------- ----------------
All directors and executive
officers as a group, consisting
of seven persons................ $725,369 $62,775
During the year ended December 31, 2001, we paid to each of our outside and
independent directors an annual fee of approximately $10,000 and a per meeting
attendance fee of approximately $254. Those fees are paid based on the fees
detailed in a schedule published semi-annually by the Committee for Public
Directors under the Israeli Securities Law.
As of December 31, 2001, our directors and executive officers as a group,
consisting of seven persons, held options to purchase an aggregate of 623,294
ordinary shares, at exercise prices ranging from $1.46 to $10.56 per share, with
vesting over a three-year term. Of such options 13,290 options expire in 2009,
45,000 options expire in 2010 and 565,004 options expire in 2011. All options
were issued under our 1991 and 2000 Employee Stock Option Plans.
Stock Option Plan
1991 Stock Option Plan
In 1991, we adopted our 1991 Employee Stock Option Plan, or the 1991 Plan.
The 1991 Plan, as amended, authorized the grant of options to purchase an
aggregate of 6,750,000 ordinary shares. The 1991 Plan had a 10-year term which
ended on July 31, 2001.
As of January 24, 2003, options to purchase 1,012,406 shares were
outstanding at an average exercise price of $3.56 per share. In 2001, 272,280
options were granted at an average exercise price of $1.75 per share and 266,268
options were exercised into ordinary shares, at an average exercise price of
$1.33 per share.
As of January 24, 2003, our executive officers and directors as a group,
consisting of seven persons, held options to purchase 72,089 ordinary shares, at
an average exercise price of $4.42 per share. In 2001, 25,004 options were
granted to our executive officers and directors as a group, at an average
exercise price of $1.62 per share and no options were exercised into ordinary
shares by such persons.
2000 Stock Option Plan
Our 2000 Employee Stock Option Plan, or the 2000 Plan, authorizes the grant
of options to purchase up to 3,000,000 ordinary shares. Employees, officers,
directors and consultants of our company and its subsidiaries are eligible to
participate in the 2000 Plan. Awards under the 2000 Plan may be granted in the
forms of incentive stock options as provided in Section 422 of the U.S. Internal
Revenue Code of 1986, as amended, non-qualified stock options, options granted
pursuant to Section 102 of the Israeli Tax Ordinance and options granted
pursuant to Section 3.9 of the Israeli Tax Ordinance. The 2000 Plan has a term
of ten years and will terminate in November 2010. No award of options may be
made after such date.
At January 24, 2003, options for the purchase of 1,601,227 ordinary shares
having an average exercise price of $1.63 per share had been granted. Of such
options, options to purchase 1,080,528 ordinary shares are currently
exercisable. Options for the purchase of 1,398,773 ordinary shares are available
for future grant under the 2000 Plan. Of such outstanding options, 540,000
options were granted to our executive officers and directors at an average
exercise price of $1.625 per share and no options were exercised into ordinary
shares by such persons.
6
Certain Transactions
Agreements with Enformia Ltd.
In October 2001, we entered into an agreement with Enformia Ltd., a company
which is controlled by Mr. David Assia, our chairman of the board of directors,
pursuant to which we sublet to Enformia approximately 2,900 square feet on the
third floor of our building at 3 Haplada Street for a monthly rent of $6,583
(based on $22.70 per square meter including maintenance expenses) plus value
added tax. The term of the lease was one year and subject to renewal for
additional terms of one year each. The terms of the lease provided for
termination with 90 days prior notice. In February 2002, the parties agreed to
terminate the lease.
In March 2002, we entered into another agreement with Enformia pursuant to
which we sublet to Enformia the first floor (approximately 2,440 square feet) of
a building located at 3 Haplada Street in Or Yehuda at a monthly rent of $2,200,
which rent does not include maintenance expenses, plus value added tax. The term
of the lease is one year and subject to renewal for additional terms of one year
each. The parties may terminate the lease upon providing the other party with 90
days prior notice.
In May of 2001, we entered into an agreement with Enformia pursuant to
which Enformia will maintain our website for a fee of NIS 50,835 ($12,000) per
year.
In November 2001, we entered into an agreement with Enformia pursuant to
which we acquired certain software known as Weblogic Technology which is
required to operate our website for a fee of NIS 192,094 ($45,000).
We believe that the terms of the transactions with Enformia Ltd. were
beneficial and no less favorable to us than the terms which might be available
to us from unaffiliated third parties. Because of our chairman's personal
interest in Enformia, any future transactions and arrangements with Enformia
will require approval of our audit committee and board of directors and may
require approval by our shareholders.
COMPENSATION FOR THE COMPANY'S OUTSIDE DIRECTORS
(Item 2 on the Proxy Card)
Pursuant to the Companies Law, an outside director is entitled to
compensation and to reimbursement of expenses as provided in the Companies
Regulations (Rules Regarding Compensation to an Outside Director), 5760-2000, or
the Companies Regulations, promulgated under the Companies Law. The Companies
Regulations provide that an outside director is entitled to receive from the
company an annual fee and a per meeting attendance fee for his or her
participation at a meeting of the board of directors or any board committee up
to the amounts specified in the Companies Regulations. Nevertheless, a company
may decide that instead of the compensation specified above, an outside director
may receive compensation which shall be determined in proportion to the
compensation of the other directors of the company. In addition to any cash
compensation, a company may also issue to its outside directors securities of
the company that will be awarded in the framework of the company's option plan
for directors and other officers of the company and in proportion to the
securities awarded to the other directors of the company. An outside director is
otherwise prohibited from receiving any other consideration, directly or
indirectly, in connection with his or her service as an outside director. Our
audit committee and board of directors determined to compensate Mr. Yigal Berman
and Ms. Shlomit Golan, our outside directors, by paying them an annual fee and a
per meeting attendance fee equal to the compensation received by our other
non-employee directors.
The Israeli Companies Law requires that the terms of compensation to
directors be approved by the audit committee, the board of directors, and
thereafter, the General Meeting of Shareholders.
We propose to pay our outside directors annual remuneration of US $7,108
and a per meeting attendance fee of US $264.
"RESOLVED, that the decision of the audit committee and board of
directors of the Company to pay our Outside Directors annual
remuneration of US $7,108 and a per meeting attendance fee of US $264
is hereby approved."
7
Under the Companies Law the affirmative vote of the holders of a majority
of the ordinary shares represented at the Annual General Meeting in person or by
proxy and entitled to vote and voting thereon will be necessary for shareholder
approval of the foregoing resolution.
The Board of Directors recommends a vote FOR the foregoing resolution.
APPOINTMENT OF AUDITORS
(Item 3 on the Proxy Card)
Our board of directors first appointed Kost, Forer & Gabbay, Certified
Public Accountants (Israel), a member of Ernst & Young International, as our
auditors in 1983 until they resigned as our auditors on May 5, 1999 as a result
of their entering into an agreement with our parent, Formula Systems, which
could have affected Kost, Forer & Gabbay's independence as our auditors. This
agreement is no longer in effect and since July 2000 Kost, Forer & Gabbay has
not had any relationships with us or any of our affiliates except as auditors.
Before re-engaging Kost, Forer & Gabbay as our auditors for the year ended
December 31, 2001, we had not consulted with them with respect to accounting
principles. As a result of Kost, Forer & Gabbay's knowledge of our operations
and reputation in the auditing field, the board of directors is convinced that
this firm has the necessary personnel, professional qualifications and
independence to act as our auditors. The board of directors has again selected
Kost, Forer & Gabbay as our auditors for the fiscal year ending December 31,
2002 and recommends that the shareholders ratify and approve the selection. The
remuneration of Kost, Forer & Gabbay shall be fixed by the board of directors
according to the volume and nature of their services.
The following resolution will be offered by the board of directors at the
Meeting:
"RESOLVED, that the appointment of Kost, Forer & Gabbay by our board
of directors to conduct the annual audit of our financial statements
for the year ending December 31, 2002, and to authorize the board of
directors to fix their remuneration is ratified, confirmed and
approved."
The affirmative vote of the holders of a majority of the ordinary shares
represented at the Meeting in person or by proxy and entitled to vote and voting
thereon will be necessary for shareholder approval of the foregoing resolution.
In the event this resolution does not receive the necessary vote for
adoption, or if for any reason Kost, Forer & Gabbay cease to act as our
auditors, the board of directors will appoint other independent public
accountants as our auditors.
8
The Board of Directors recommends a vote FOR the foregoing resolution.
RECEIVE AND CONSIDER THE AUDITOR'S REPORT, DIRECTORS'
REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
(Item 4 on the Proxy Card)
At the Meeting, our Auditor's Report, Directors' Report and the
Consolidated Financial Statements for the year ended December 31, 2001 will be
presented. The affirmative vote of the holders of a majority of the ordinary
shares represented at the Meeting in person or by proxy and entitled to vote
will be necessary to consider and receive our Auditors' Report, Directors'
Report and the Consolidated Financial Statements for the year ended December 31,
2001.
The Board of Directors recommends a vote FOR the consideration and receipt
of the Auditor's Report, Directors' Report and Consolidated Financial Statements
for the year ended December 31, 2001.
By Order of the Board of Directors,
/s/Amit Birk
Amit Birk
Secretary
Dated: January 24, 2003
9
Item 2
MAGIC SOFTWARE ENTERPRISES LTD. VOTE BY MAIL
C/O PROXY SERVICES Mark, sign and date your proxy card
P.O. BOX 9112 and return it in the postage-paid
FARMINGDALE, NY 11735 envelope we have provided or
return it to Magic Software Enterprises,
Ltd., c/o ADP, 51 Mercedes Way,
Edgewood, NY 11717
AUTO DATA PROCESSING
INVESTOR COMM SERVICES
ATTENTION:
TEST PRINT
51 MERCEDES WAY
EDGEWOOD, NY
11717
CONTROL NUMBER
ACCOUNT NUMBER
PAGE 1 OF 2
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: X KEEP THIS
PORTION FOR YOUR RECORDS
--------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
MAGIC SOFTWARE ENTERPRISES LTD.
Vote On Directors
1. The election of five directors for terms expiring at the 2003 Annual
General Meeting and one outside director for a term expiring in 2005.
Directors:
01) David Assia, 02) Dan Goldstein, 03) Gad Goldstein,
04) Jacob Tanenbaum, 05) Naamit Salomon
To withhold
authority to
vote, mark "For
All Except" and
write the
nominee's name
on the line
below
[ ] For All [ ] Withhold All [ ] For All Except _______________
Pursuant to Israeli law, in order to ensure specific majority requirements we
are required to inquire of you as to whether you have a personal interest in the
Company (as described in the proxy statement) with respect to the election of
the nominee for outside director.
Do you have a personal interest with respect to the election of Ms. Shlomit
Golan as an outside director? YES [ ] No [ ]
1a. Outside Director:
Shlomit Golan [ ] For [ ] Withhold
Vote On Proposals
2. Approval of the terms of compensation for the Company's outside directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Ratification of the appointment of Kost, Forer & Gabbay as the Company's
independent auditors for the year ending December 31, 2002 and
authorization for the Board of Directors to fix their remuneration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Receipt and consideration of the Company's Auditor's Report, Directors'
Report and Consolidated Financial Statements for the year ended December
31, 2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Please sign exactly as name(s) appear(s) hereon. When signing as attorney,
executor, administrator, trustee, guardian, or as an officer signing for a
corporation, please give full title under signature.)
[_____________________________][_______] [______________________][_____]
Signature (PLEASE SIGN WITHIN BOX)Date Signature (Joint Owners)Date
MAGIC SOFTWARE ENTERPRISES LTD.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints David Assia and Amit Birk, or either of
them, attorneys or attorney of the undersigned, for and in the names(s) of the
undersigned, with power of substitution and revocation in each to vote any and
all ordinary shares, par value NIS 0.1 per share, of Magic Software Enterprises
Ltd. (the "Company"), which the undersigned would be entitled to vote as fully
as the undersigned could if personally present at the Annual General Meeting of
Shareholders of the Company to be held on February 23, 2003 at 9:00 a.m. at the
offices of the Company, 5 HaPlada Street, Or Yehuda, Israel, and at any
adjournment or adjournments thereof, hereby revoking any prior proxies to vote
said shares, upon the following items of business more fully described in the
notice of and proxy statement for such Annual General Meeting (receipt of which
is hereby acknowledged):
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE. UNLESS OTHERWISE
INDICATED, THIS PROXY WILL BE VOTED FOR (i) the ELECTION OF THE FIVE NOMINEES
FOR DIRECTOR aND THE ONE NOMINEE FOR OUTSIDE DIRECTOR, AND (ii) APPROVAL OF
PROPOSALS 2, 3 AND 4 SET FORTH ON THE REVERSE SIDE.
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, thereunto duly authorized.
MAGIC SOFTWARE ENTERPRISES LTD.
(Registrant)
By /s/ Menachem Hasfari
--------------------
Menachem Hasfari
Chief Executive Officer
Date: February 7, 2003