SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
[X] Filed by the Registrant
[ ] 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 Rule 14a-11(c) or Rule 14a-12
ACCENT SOFTWARE INTERNATIONAL LIMITED
- --------------------------------------------------------------------------------
(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:
2) Aggregate number of securities to which transaction applies:
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.:
3) Filing Party:
4) Date Filed:
ACCENT SOFTWARE INTERNATIONAL LTD.
28 PIERRE KOENIG STREET
P.O. BOX 53063
JERUSALEM, 91530 ISRAEL
NOTICE OF ANNUAL
GENERAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 28, 1997
April 29, 1997
To Our Shareholders:
You are cordially invited to attend the Annual General Meeting of
Shareholders (the "Meeting") of Accent Software International Ltd. (the
"Company") to be held on Wednesday, May 28, 1997, at 10:00 A.M. local time, at
The Laromme Hotel, 11 Jabotinsky Street, Jerusalem, Israel:
1. To elect eight individuals to the Board of Directors.
2. To approve the compensation of Todd A. Oseth pursuant to Israeli law.
3. To appoint Luboshitz, Kasierer & Co., a member of the Andersen
Worldwide organization, as independent auditors to audit the Financial
Statements of the Company and its subsidiaries for the year ended December 31,
1997, and to authorize the Board of Directors of the Company to determine the
level of compensation of the independent auditors.
4. To transact such other business as may properly come before the Meeting
or any adjournments thereof.
The Israel Companies Ordinance confers upon the shareholders of an Israeli
company limited rights to receive and deliberate with respect to the Company's
financial statements for the year ended and as of December 31, 1996.
Concurrently herewith, the Company is mailing to its shareholders its Annual
Report to Shareholders which includes the audited financial statements referred
to above.
Only holders of record of the Ordinary Shares and Units at the close of
business on April 17, 1997, will be entitled to notice of and to vote at the
Meeting. Please sign, date and mail the enclosed proxy so that your shares may
be represented at the Meeting if you are unable to attend and vote in person.
By Order of the Board of Directors.
ROBERT TRACHTENBERG
Secretary
ACCENT SOFTWARE INTERNATIONAL LTD.
28 PIERRE KOENIG STREET
P.O. BOX 53063
JERUSALEM, 91530 ISRAEL
PROXY STATEMENT
ANNUAL GENERAL MEETING OF SHAREHOLDERS
April 29, 1997
This Proxy Statement is being furnished to the shareholders (the
"Shareholders") of Accent Software International Ltd., a corporation organized
under the laws of the State of Israel (the "Company"), in connection with the
solicitation of proxies by the Board of Directors for use at the Annual General
Meeting of Shareholders (the "Meeting") of the Company to be held on Wednesday,
May 28, 1997, at 10:00 A.M. local time, and at any adjournments thereof.
At the Meeting, Shareholders will be asked:
1. To elect eight individuals to the Board of Directors.
2. To approve the compensation of Todd A. Oseth pursuant to
Israeli law.
3. To appoint Luboshitz, Kasierer & Co., a member of the
Andersen Worldwide organization, as independent auditors
to audit the Financial Statements of the Company and its
subsidiaries for the year ended December 31, 1997, and
to authorize the Board of Directors of the Company to
determine the level of compensation of the independent
auditors.
4. To transact such other business as may properly come
before the Meeting or any adjournments thereof.
The Israel Companies Ordinance confers upon the shareholders
of an Israeli company limited rights to receive and deliberate with respect to
the Company's financial statements for the year ended and as of December 31,
1996. Concurrently herewith, the Company is mailing to its shareholders its
Annual Report to Shareholders which includes the audited financial statements
referred to above.
The Board of Directors has fixed the close of business on
April 17, 1997, as the record date (the "Record Date") for the determination of
the holders of the Ordinary Shares and Units (consisting of one ordinary share
and one warrant to purchase one ordinary share) entitled to notice of and to
vote at the Meeting. Each such Shareholder will be entitled to one vote for each
Ordinary Share and/or Unit held on all matters to come before the Meeting and
may vote in person or by proxy authorized in writing. At the close of business
on April 17, 1997, there were 9,896,442 Ordinary Shares and 1,800,000 Units
outstanding and entitled to vote.
This Proxy Statement and the accompanying form of proxy are first
being sent to holders of the Ordinary Shares and Units on or about April 29,
1997.
THE MEETING
DATE, TIME AND PLACE
The Meeting will be held on Wednesday, May 28, 1997, at 10:00 A.M.,
local time, at The Laromme Hotel, 11 Jabotinsky Street, Jerusalem, Israel.
MATTERS TO BE CONSIDERED
At the Meeting, Shareholders will be asked to consider and vote upon
(i) the election of eight individuals to the Board of Directors; (ii) the
approval of the compensation for Todd A. Oseth pursuant to Israeli law; and
(iii) the appointment of independent auditors. See "ELECTION OF DIRECTORS,"
"APPROVAL OF COMPENSATION FOR TODD A. OSETH" and "APPOINTMENT OF INDEPENDENT
AUDITORS." The Board of Directors knows of no matters that are to be brought
before the Meeting other than as set forth in the Notice of Meeting. If any
other matters properly come before the Meeting or at any adjournment thereof,
the persons named in the enclosed form of proxy or their substitutes will vote
in accordance with their best judgment on such matters.
RECORD DATE; SHARES AND UNITS OUTSTANDING AND ENTITLED TO VOTE
Shareholders as of the Record Date (i.e., the close of business on
April 17, 1997) are entitled to notice of and to vote at the Meeting. As of the
Record Date, there were 9,896,442 Ordinary Shares and 1,800,000 Units
outstanding and entitled to vote, with each share and Unit entitled to one vote.
Pursuant to the Company's Articles of Association, the presence, in person or by
proxy, of two persons entitled to vote upon the business to be transacted in the
Annual General Meeting, each being a shareholder, a proxy for a shareholder or a
representative of a corporation, holding together more than 33-1/3% of the
outstanding Ordinary Shares (including Ordinary Shares that are part of Units),
is necessary to constitute a quorum at the Annual General Meeting.
REQUIRED VOTES
The affirmative vote of the holders of a majority of the Ordinary
Shares present and voting at the Meeting is required to approve each of the
matters that the Shareholders will be asked to vote upon, including the election
of directors. Under Israeli law, broker non-votes and abstentions will have no
effect on whether the requisite vote is obtained since they do not constitute
present and voting shares.
VOTING AND REVOCATION OF PROXIES
Shareholders are requested to complete, date, sign and promptly
return the accompanying form of proxy in the enclosed envelope. Ordinary Shares
and Units represented by properly executed proxies received by the Company and
not revoked will be voted at the Meeting in accordance with the instructions
contained therein. If instructions are not given, proxies will be voted FOR the
election of each nominee for director named herein, FOR the approval of the
compensation for Todd A. Oseth pursuant to Israeli law, and FOR the ratification
of the selection of independent auditors and authorization for the Board of
Directors to determine their compensation.
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Any proxy signed and returned by a Shareholder may be revoked at any
time before it is voted by filing with the Secretary of the Company, at the
address of the Company set forth herein, written notice of such revocation or a
duly executed proxy bearing a later date or by attending the Meeting and voting
in person. Attendance at the Meeting will not in and of itself constitute
revocation of a proxy.
PROXY SOLICITATION
The Company will bear the costs of solicitation of proxies for the
Meeting. In addition to solicitation by mail, directors, officers and employees
of the Company may solicit proxies from Shareholders by telephone, telegram,
personal interview or otherwise. Such directors, officers and employees will not
receive additional compensation, but may be reimbursed for out-of-pocket
expenses in connection with such solicitation. Brokers, nominees, fiduciaries
and other custodians have been requested to forward soliciting material to the
beneficial owners of Ordinary Shares and Units held of record by them, and such
custodians will be reimbursed for their reasonable expenses.
INDEPENDENT AUDITORS
The Company has been advised that representatives of Luboshitz,
Kasierer & Co. (a member of the Andersen Worldwide organization), the Company's
independent auditors for 1996, will attend the Meeting, will have an opportunity
to make a statement if they desire to do so, and will be available to respond to
appropriate questions.
ELECTION OF DIRECTORS
At the Meeting, eight directors are to be elected to serve until the
next Meeting or until their successors are elected and qualified. Unless
authority to vote is withheld, the persons named in the enclosed form of proxy
have advised that they intend to vote FOR the eight nominees named below and
described in the following table, all of whom have consented to being named in
this proxy statement and to serve if elected. The Board of Directors does not
expect that any of the nominees will be unavailable for election as a director.
However, if, by reason of an unexpected occurrence, one or more of the nominees
is not available for election, the persons named in the form of proxy have
advised that they will vote for such substitute nominees as the Board of
Directors of the Company may propose. The following information is as of April
17, 1997.
Roger R. Cloutier, II Mr. Cloutier, 43, has served as a Director of the
Company since May 1994, as Chairman since October
1996 and as Co- Chairman since February 1997. He
currently serves as a Vice President of Jacobs
Investors, Inc. and IMR General, Inc. and is a
limited partner of IMR Management Partners, L.P.,
the general partner of the IMR Fund, L.P. In
addition, in February 1996, Mr. Cloutier began
serving as Executive Vice President and Chief
Financial Officer of Genmar Holdings, Inc., a
power boat manufacturing company controlled by
Irwin L. Jacobs. Mr. Cloutier began working with
companies affiliated with Mr. Jacobs in April
1990. Mr. Cloutier previously served in various
executive capacities at CVN
3
Companies, Inc., a television direct marketing
company, from 1984 to 1990. He began his career
with Arthur Andersen & Co., and is a certified
public accountant.
Robert S. Rosenschein Mr. Rosenschein, 44, served as President, Chief
Executive Officer and a Director of the Company
since its inception in 1988, until February 1997,
when he became Co-Chairman of the Board of
Directors and Chief Technology Officer for
Language Technologies. Prior to his employment
with Accent, Mr. Rosenschein worked as an
independent consultant to clients including Ashton
Tate, the World Bank and Efrat Future Technology.
He holds a B.S. degree from the Massachusetts
Institute of Technology. Robert S. Rosenschein and
Dr. Jeffrey S. Rosenschein are brothers.
Todd A. Oseth Mr. Oseth, 35, was appointed President and Chief
Executive Officer of the Company on February 6,
1997. He also serves as Acting Chief Executive
Officer of AgentSoft, Ltd., the Company's
majority-owned subsidiary. He is a nominee to
serve as a Director of the Company. Prior to
joining the Company, Mr. Oseth served as Vice
President, Business Development of Sony
Information Technologies of America. From 1989 to
1995, he served in various senior managerial
capacities, including two years as President of
Enhanced Memory Systems, Inc., a subsidiary of
Ramtron International Corp. Prior to Ramtron, he
started two different software companies that were
subsequently sold to investors. Mr. Oseth began
his career with Honeywell, where he held various
managerial positions from 1980 to 1988. He holds a
B.S. degree in Electrical Engineering and Computer
Science from the University of Minnesota and an
M.B.A. degree from the University of St. Thomas.
Dr. Jeffrey S. Rosenschein Dr. Rosenschein, 40, served as Senior Vice
President, Engineering of the Company since July
1995, and prior thereto, as the Vice President,
Engineering since 1988. In addition, he has been
Chief Scientist and a Director of the Company
since its inception in 1988. In February 1997, Dr.
Rosenschein assumed the position of Chief
Technology Officer for Intelligent Agent
Technology. Dr. Rosenschein also serves as the
Chairman of the Board of Directors of AgentSoft, a
majority-owned subsidiary of the Company. In
addition, he was a Lecturer in Computer Science at
the Hebrew University of Jerusalem from 1989 to
1992, and has been a Senior Lecturer since 1992.
He holds an A.B. degree from Harvard University in
Applied Mathematics and M.Sc. and Ph.D. degrees in
Computer Science from Stanford
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University. Dr. Rosenschein has been granted a
leave of absence from Hebrew University for the
two-year period commencing October 1995. Dr.
Jeffrey S. Rosenschein and Robert S. Rosenschein
are brothers.
Elliott B. Broidy Mr. Broidy, 39, has served as a Director of the
Company since July 1993. He has been an
independent investor since May 1991. From 1982 to
May 1991, Mr. Broidy was Managing Director of Bell
Enterprises, a private investment company. He
began his career with Arthur Andersen & Co., and
is a certified public accountant. Mr. Broidy is
also a Director of Intellicell Corporation
(Nasdaq: FONE).
Esther Dyson Ms. Dyson, 44, has served as a Director of the
Company since June 1996. Ms. Dyson has been
President of EDventure Holdings, Inc., a
diversified holding company which publishes
newsletters and sponsors conferences for the
software industry, for more than the past five
years. Ms. Dyson is a member of the advisory
boards of the Software Entrepreneurs Forum, the
Poynter Institute for Media Studies, the Institute
for Research on Learning and the Cyberspace Law
Institute. Ms. Dyson is a limited partner of the
Mayfield Software Fund. Ms. Dyson is also a
Director of Thinking Tools, Inc.
Meldon E. Levine Mr. Levine, 53, has served as a Director of the
Company since May 1996. He has been a partner at
the law firm Gibson, Dunn & Crutcher since
February 1993. From 1983 to 1993, he served as a
member of the United States House of
Representatives, representing Los Angeles and
certain suburbs thereof. Mr. Levine is a U.S.
government appointee to the U.S.-Israel Science
and Technology Advisory Commission.
Mark A. Tebbe Mr. Tebbe, 35, has served as a Director of the
Company since May 1996. He has been the President
of Lante Corporation, a Chicago-based
microcomputing consulting and integration firm,
since 1984. Mr. Tebbe is a member of the Advisory
Board of Comdex.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ABOVE NAMED NOMINEES.
APPROVAL OF COMPENSATION FOR TODD A. OSETH
Todd A. Oseth was appointed as President and Chief Executive Officer
of the Company, effective February 6, 1997. He is also a nominee for appointment
to the Company's Board of Directors. Israeli law requires shareholder approval
of the compensation of directors, including compensation received by a director
in his role as an officer of the Company. The Board
5
of Directors recommends that the shareholders approve the compensation of Mr.
Oseth as set forth below.
ANNUAL COMPENSATION
Mr. Oseth's annual compensation has been set at $200,000. In
addition, his employment agreement provides that the Company will reimburse him
for the reasonable costs involved in relocating from California to Colorado.
GRANT OF OPTIONS
The Board of Directors also approved a plan on April 29, 1997,
entitled the CEO Share Option Plan (1977) (the "Plan"), granting Mr. Oseth
options to purchase Ordinary Shares of the Company. A copy of the plan is
attached to this Proxy Statement as Annex A.
The Plan is administered by a committee of the Board of Directors
(the Compensation and Share Option Committee) consisting of at least two
directors appointed by the Board of Directors. The Committee is vested with
complete authority to administer and interpret the CEO Share Option Plan. The
current members of the Committee are Messrs. Broidy and Cloutier and Ms. Dyson.
Grants under the Plan are as follows:
An option to purchase 300,000 shares of the Company's Ordinary Shares at
the Fair Market Value as of the Board of Director's adoption of the Plan.
100,000 of these options shall vest on each of the three following
anniversary dates of this grant.
An additional grant of an option to purchase 50,000 shares of the
Company's Ordinary Shares as of the date of the Option Grant set forth in
subparagraph (a), above, at the same exercise price applicable to such
grant (the "First Option"). The First Option shall vest three days after
the closing bid quotation of the Company's Ordinary Shares on the ten
preceding business days was equal to or greater than 200% of such exercise
price (the "First Vesting"). Upon the First Vesting, the Committee shall
grant an option to purchase 50,000 additional shares of the Company's
Ordinary Shares at an exercise price equal to 200% of the exercise price
applicable to the First Option Grant (the "Second Option Grant"). The
Second Option Grant shall vest three days after the closing bid quotation
of the Company's Ordinary Shares on the ten preceding business days was
equal to or greater than 300% of the initial exercise price (the "Second
Vesting"). Upon the Second Vesting, the Committee shall grant an option to
purchase 50,000 additional shares of the Company's Ordinary Shares at an
exercise price of 300% of the exercise price applicable to the First
Option Grant (the "Third Option Grant"). The Third Option Grant shall vest
three days after the closing bid quotation of the Company's Ordinary
Shares on the ten preceding business days was equal to or greater than
400% of such exercise price (the "First Vesting").
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Options granted pursuant to the Plan are not qualified options. They
shall be exercisable for a period of five years from the date of grant. The
number of options being granted is subject to adjustment for stock splits,
mergers, consolidations, reorganizations and recapitalizations. Options are
non-assignable except by will or by the laws or descent or distribution. Options
which have vested may be exercised at any time until their expiration, so long
as the grantee is still employed by the Company. In the event of a change in
control of the Company (defined as a new entity gaining control of fifty-one or
more percent of the outstanding shares eligible to be voted), all options under
the Plan which have been granted but have not yet vested shall vest immediately.
Should the grantee's employment with the Company be terminated, any vested
options must be exercised within 90 days of such termination unless otherwise
determined by the Board of Directors. If the grantee dies, becomes disabled or
retires, the right to exercise the option will be determined by the Compensation
and Share Option Committee in its sole discretion. The grantee is responsible
for all personal tax consequences of the grant and the exercise thereof. The
grantee is entitled to certain piggyback registration rights fully described in
Annex A.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors recommends that the shareholders appoint
Luboshitz, Kasierer & Co., a member of the Andersen Worldwide organization,
certified public accountants, as independent auditors to audit the accounts of
the Company and its subsidiaries for 1997, and to authorize the Board of
Directors of the Company to determine the level of compensation of the
independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
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DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The directors and executive officers of the Company as of the date
of this filing and their respective ages and positions with the Company are set
forth below. Biographical information for those individuals not included on
pages 3, 4 and 5 is are also set forth below.
NAME AGE POSITION
- ---- --- --------
Todd A. Oseth 35 President, Chief Executive Officer and Director
Robert J. Behr 46 Chief Financial Officer
Moshe Kranc 41 Senior Vice President, Product Development
Herbert Zlotogorski 44 Senior Vice President, Business Development
Robert Trachtenberg 40 Senior Vice President, Administration and Legal Affairs
Dr. Jeffrey S. Rosenschein 40 Chief Technology Officer (Intelligent Agents) and Director
Robert S. Rosenschein 43 Co-Chairman and Chief Technology Officer (Languages)
Roger R. Cloutier, II 43 Co-Chairman of the Board
Elliott B. Broidy 39 Director
Esther Dyson 44 Director
Meldon E. Levine 53 Director
Mark A. Tebbe 35 Director
ROBERT J. BEHR has been Chief Financial Officer of the Company since
March, 1997. Prior thereto, Mr. Behr was a consultant to Jacobs Management
Corporation since January, 1997. From 1995 to 1996, Mr. Behr was Corporate
Controller of AmeriData, Inc., a computer value added reseller headquartered in
Minneapolis. From 1985 to 1995, Mr. Behr held various positions in the corporate
offices of the General Dynamics Corporation (a defense and aerospace company
headquartered in Falls Church, Virginia) including Corporate Director of
Finance, Corporate Director of Accounting and Corporate Director of Strategic
Planning. He holds a B.B.A. degree in Accounting from the University of Notre
Dame and an M.B.A. degree from Northeastern University.
Mr. Behr is a Certified Public Accountant.
MOSHE KRANC has been Senior Vice President, Product Development
since November, 1996. He was a founder of Applix, Inc., a market leader in
multi-language, multi-platform, real-time decision software. He previously
served as the Technical Director of Research and Development for News Datacom
Research, a division of News Corporation, responsible for digital television
systems, broadcast data systems and interactive TV applications. Mr. Kranc holds
an M.S. degree in computer science from the University of California at
Berkeley.
HERBERT ZLOTOGORSKI has been Senior Vice President, Business
Development of the Company since February 1997. Prior thereto he served as
Senior Vice President, Operations of the Company since July, 1995, and as the
Company's Vice President, Administration and Finance from
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March, 1993 to June, 1995. From 1991 to 1993, Mr. Zlotogorski was an independent
computer consultant providing services to The Bankers Trust Company. In
addition, Mr. Zlotogorski was a Vice President of Bankers Trust from 1987 until
1991, where he managed the development and installation of the bank's funds
transfer systems.
ROBERT TRACHTENBERG has been Senior Vice President, Administration
and Legal Affairs since February, 1997. He joined the Company in June, 1994, as
the General Counsel and served as Vice President and General Counsel from
February, 1996. Prior to joining the Company, Mr. Trachtenberg was an Assistant
Chief in the General Litigation Division of the New York City Corporation
Counsel, where he acted as lead counsel in major federal and state litigation on
behalf of New York City. Mr. Trachtenberg graduated with a J.D. degree from New
York University School of Law in 1981 and is admitted to practice law before the
bars of the State of New York and Israel.
Pursuant to the Shareholders' Agreement (as defined below), IMR has
the right to appoint one member to the Company's Board of Directors. Roger R.
Cloutier, II, currently serves as IMR's designee to the Company's Board of
Directors.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
AND BOARD COMMITTEES
MEETINGS AND COMMITTEES
During 1996, the Board of Directors held four meetings. All members
of the Board of Directors attended all of the meetings of the Board, except
Meldon Levine who missed one meeting.
The Board of Directors has a standing Executive Committee, an Audit
Committee and a Compensation and Share Option Committee.
The functions of the Executive Committee are to carry out the
general oversight functions of the Board of Directors and act as a board-level
resource for the management of the Company between formal Board meetings, and to
undertake, from time to time, such other tasks as are delegated to it by the
full Board. The Executive Committee met once during 1996.
The functions of the Audit Committee are to recommend to the Board
independent auditors for the Company, to review the financial statements and any
transactions between the Company and interested parties, to analyze the
recommendations of the auditors, and to review internal audit procedures and
controls. The Audit Committee represents the Board of Directors in discharging
its responsibilities relating to the accounting, reporting and financial control
practices of the Company. The Audit Committee met twice during 1996.
The functions of the Compensation and Share Option Committee are to
determine and review the compensation of the Company's executive officers, and
to establish and review the Company's employee benefit plans and to present
recommendations thereon to the Board. The Compensation and Share Option
Committee also has complete authority to administer and interpret the Company's
share option plans, subject to the terms thereof, including determining the
persons to
9
whom options will be granted, the number of options to be granted and the terms
of such options. The Compensation and Share Option Committee met twice during
1996.
The current members of the Executive Committee are Elliott Broidy,
Roger Cloutier and Mark Tebbe. The current members of the Audit Committee are
Messrs. Broidy, Cloutier and Meldon Levine. The current members of the
Compensation and Share Option Committee are Messrs. Broidy, Cloutier and Esther
Dyson. All members attended all of the meetings of such committees.
The Board of Directors does not have a Nominating Committee.
PRESENT BENEFICIAL OWNERSHIP OF ORDINARY SHARES
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Set forth below is certain information with respect to the
beneficial ownership of Ordinary Shares as of April 17, 1997 by (i) each person
who, to the knowledge of the Company, is the beneficial owner of more than 5% of
the outstanding Ordinary Shares (the Company's only class of voting securities),
(ii) each director and named executive officer of the Company and (iii) all
executive officers and directors of the Company as a group. As of April 17,
1997, there were 9,896,442 Ordinary Shares (not including ordinary shares that
are part of Units) and 1,800,000 Units outstanding.
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
--------------------
NAME OF BENEFICIAL OWNER(1)(2) NUMBER PERCENT
- ------------------------------ ------ -------
Group consisting of IMR Investments V.O.F. 2,894,705(3) 23.5%
and IMR Fund, L.P...................................
St. Michielshaam 50
Brussels 1040, Belgium
Elliott B. Broidy..................................... 1,010,232(4) 8.5%
10100 Santa Monica Blvd, Suite 300
Los Angeles, California 90067
Robert S. Rosenschein................................. 593,000(5) 5.0%
Dr. Jeffrey Rosenschein............................... 515,196(6) 4.4%
Herbert Zlotogorski................................... 112,500(7) 1.0%
KZ Overseas Holding Corp.............................. 78,839(8) 0.7%
c/o Wyszogrod
522 West End Avenue
New York, New York 10024
10
Roger R. Cloutier, II................................. 27,000(9) 0.2%
100 South Fifth Street, Suite 2500
Minneapolis, Minnesota 55402
Meldon E. Levine...................................... 24,750(10) 0.2%
333 South Grand Avenue, 50th Floor
Los Angeles, California 90071-3197
Mark A. Tebbe......................................... 22,500(11) 0.2%
161 North Clark Street, Suite 4900
Chicago, Illinois 60601
Todd A. Oseth......................................... 11,000 0.1%
Robert Trachtenberg................................... 5,500(12) *
Robert J. Behr........................................ 5,000 *
Moshe Kranc........................................... 1,000 *
Esther Dyson.......................................... 0 0.0%
Edventure Holdings, Inc.
104 Fifth Avenue
New York, New York 10011
All Executive Officers and Directors as a Group....... 2,451,769(13) 19.9%
(11 persons)
- -------------------------------------------------------
*Less than 0.1%
(1) Unless otherwise indicated the address of each beneficial owner identified
is 28 Pierre Koenig Street, Jerusalem 91530, Israel.
(2) Unless otherwise noted, the Company believes that all persons named in the
table have sole voting and investment power with respect to all Ordinary
Shares beneficially owned by them. Each beneficial owner's percentage
ownership is determined by assuming that options or warrants that are held
by such person (but not those held by any other person) and which are
exercisable within 60 days of December 31, 1996 have been exercised.
(3) Includes warrants to purchase an aggregate of 456,750 Ordinary Shares.
(4) Includes: (i) 841,857 Ordinary Shares directly owned by Mr. Broidy; (ii)
options to purchase 27,000 Ordinary Shares; and (iii) warrants to purchase
141,375 Ordinary Shares.
(5) Includes options to purchase 79,875 Ordinary Shares and warrants to
purchase 41,875 Ordinary Shares.
(6) Includes options to purchase 87,750 Ordinary Shares and warrants to
purchase 24,375 Ordinary Shares.
(7) Includes options to purchase 112,500 Ordinary Shares.
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(8) Includes warrants to purchase 8,125 Ordinary Shares. KZ Overseas Holdings
Corp. is an affiliate of Mr. Zlotogorski, Senior Vice President, Business
Development of the Company.
(9) Includes options to purchase 27,000 Ordinary Shares. Roger R. Cloutier, II
is a Vice President of IMR General, Inc., one of the partners of IMR
Investments and the general partner of IMR Management Partners, L.P.
which, in turn, is the general partner of IMR. Mr. Cloutier disclaims
beneficial ownership of the equity securities owned by IMR and IMR
Investments.
(10) Mr. Levine and his sister indirectly own 4,500 Ordinary Shares in the
aggregate. Mr. Levine disclaims beneficial ownership of the 2,250 Ordinary
Shares indirectly owned by his sister. Also includes options to purchase
22,500 ordinary shares.
(11) Includes options to purchase 22,500 ordinary shares.
(12) Includes options to purchase 5,000 ordinary shares.
(13) Includes options to purchase 430,377 Ordinary Shares and warrants to
purchase 215,750 Ordinary Shares.
As of April 17, 1997, Cede & Co. held of record 7,402,401 Ordinary
Shares and Units (approximately 63.3% of the total number of Ordinary Shares
outstanding including Ordinary Shares which are part of Units). Cede & Co. held
such shares as a nominee for broker-dealer members of The Depository Trust
Company, which conducts clearing and settlement operations for securities
transactions involving its members.
12
EXECUTIVE COMPENSATION
SUMMARY OF COMPENSATION TABLE
The following table sets forth information in respect to the
compensation of the Chief Executive Officer and each of the other executive
officers of the Company who had annual compensation in 1996 in excess of
$100,000.
LONG-TERM
COMPENSATION
AWARDS
----------
ANNUAL COMPENSATION NUMBER OF
------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
YEAR SALARY BONUS COMPENSATION(1) OPTIONS COMPENSATION
---- ------ ----- --------------- ------- ------------
Robert S. Rosenschein 1996 $120,511 $ - $28,443 - $ -
Co-Chairman and Chief 1995 75,744 - 16,805 90,000 -
Technology Officer 1994 57,315 - 11,600 - -
(Languages)
Mitchell R. Joelson(2) 1996 120,435 - 4,752 - 15,000(3)
Executive Vice-President 1995 130,322 - 10,397 105,000 40,077(3)
1994 109,115 - 0 - 31,605(3)
Dr. Jeffrey S. Rosenschein 1996 106,067 - 24,219 - 22,727(4)(5)
Chief Technology Officer 1995 56,604 - 12,919 45,000 -
(Intelligent Agents) 1994 50,442 - 11,097 30,000 -
Herbert Zlotogorski 1996 107,484 - 25,041 - -
Senior Vice President 1995 78,155 - 17,310 45,000 -
1994 60,414 - 13,291 30,000 -
<FN>
(1) In the case of Messrs. Rosenschein and Zlotogorski and Dr. Rosenschein,
amounts reported as "Other Annual Compensation" represent contributions
made by the Company into a Continuing Education Fund (similar to a
deferred compensation account in the United States) and a pension fund. In
the case of Mr. Joelson, amounts reported as "Other Annual Compensation"
represent cash payment in lieu of such contributions.
(2) Mr. Joelson resigned his position as Executive Vice President on December
4, 1996. Prior to July 26, 1995, Mr. Joelson served as Executive Vice
President of the Company pursuant to a consulting arrangement between
Accent Worldwide and Mitchell R. Joelson and Associates, Inc., a Minnesota
corporation, for which Mr. Joelson worked. Compensation amounts prior to
July 26, 1995, represent consulting fees paid by Accent Worldwide to
Mitchell R. Joelson and Associates, Inc. as compensation for the services
provided by Mr. Joelson during the relevant period.
(3) These amounts represent payments made by Accent Worldwide to Mitchell R.
Joelson while he worked as a consultant to the Company for reimbursement
of his housing and transportation expenses, and amounts paid to Mr.
Joelson after he became an employee of the Company for his housing and
transportation expenses and for other miscellaneous living expenses
incurred by him in Israel.
(4) This amount represents the value of a Company automobile which was
transferred to Dr. Rosenschein in accordance with an agreement dated
September 23, 1994.
(5) In addition to the other compensation referred to in footnote (4), during
1995, Dr. Rosenschein was granted options to purchase 800 shares of
AgentSoft, Ltd., a majority-owned subsidiary of the Company, at an
exercise price of NIS 30 per share. These options were granted in
connection with Dr. Rosenschein's past and anticipated future services to
AgentSoft, Ltd.
</FN>
13
FISCAL YEAR-END OPTION/SAR VALUES
The following table summarizes for each of the named executive
officers, the total number of unexercised outstanding options to purchase
Ordinary Shares as of December 31, 1996, and the aggregate dollar value of
unexercised in-the-money options to purchase Ordinary Shares, if any, held by
them at December 31, 1996. The value of unexercised in-the-money options at
fiscal year-end is the difference between the exercise price of such options and
the market value of the underlying Ordinary Shares at the close of business on
December 31, 1996, which was $6.38 per share. These values have not been, and
may never be, realized, as these options have not been, and may never be,
exercised. Actual gains, if any, upon exercise will depend on the market value
of the Ordinary Shares at the time of any such exercise of options. None of the
named executive officers exercised any options to purchase Ordinary Shares in
1996.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT FISCAL IN-THE-MONEY OPTIONS/SARS
YEAR-END FISCAL YEAR-END
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
Robert S. Rosenschein 79,875 60,000 $377,483 $142,500
Mitchell R. Joelson 45,002 0(1) 128,005 0
Dr. Jeffrey S. Rosenschein 87,750 30,000 464,385 81,000
Herbert Zlotogorski 112,500 30,000 616,350 81,000
(1) As a result of his resignation, Mr. Joelson forfeited 59,998 unvested
options.
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Todd A. Oseth for a
three-year term beginning on February 6, 1997, which is terminable upon three
months notice at the option of the Company. The agreement provides that Mr.
Oseth will receive an annual salary of $200,000, together with employee benefits
granted by the Company to its senior managerial personnel. In addition, the
contract provides that the Company will reimburse Mr. Oseth for the reasonable
costs involved in relocating from California to Colorado. The agreement contains
provisions prohibiting Mr. Oseth from competing with the Company for a two-year
period following termination of employment and requiring him not to disclose
confidential or proprietary information of the Company for a six-year period
following termination of employment.
The Company also has employment agreements with each of Messrs.
Robert S. Rosenschein, Herbert Zlotogorski and Dr. Jeffrey Rosenschein. Each of
these agreements is for a three-year term which commenced on July 26, 1995, but
is terminable earlier by the Company upon three months' notice. The agreements
provide for customary employee benefits, including long-term disability
insurance and other benefits. Each of these agreements contains provisions
prohibiting the employee from competing with the Company for a two-year period
following termination of employment and requiring the employee not to disclose
confidential or proprietary information of the Company for a six-year period
following termination of employment.
14
The agreements provided that initially Mr. Robert S. Rosenschein was
to be paid an annual salary of $110,000; and each of Dr. Jeffrey S. Rosenschein
and Mr. Zlotogorski was to be paid an annual salary of $100,000. Each of these
executive officers is currently entitled, pursuant to his employment agreement
with the Company, to a non-discretionary annual fifteen percent (15%) increase
in his base salary. Consequently, Robert S. Rosenschein currently earns $126,500
annually, and Dr. Jeffrey S. Rosenschein and Mr. Zlotogorski each earn $115,000.
In addition, each of such individuals is eligible to receive an annual bonus
payment in a discretionary amount determined by the Compensation and Share
Option Committee.
Moshe Kranc has an employment agreement with the Company which is
terminable by either party on no less than two months prior notice. The
agreement provides that Mr. Kranc shall be paid an annual salary of $130,000 and
be provided with a company car. The agreement also provides for customary
employee benefits, including long-term disability insurance and other benefits.
The agreement contains provisions prohibiting the employee from competing with
the Company for a two-year period following termination of employment and
requiring the employee not to disclose confidential or proprietary information
of the Company for a six-year period following termination of employment.
In connection with the formation of AgentSoft, a wholly-owned
subsidiary of the Company, the Company agreed to cause AgentSoft to grant
options with respect to ordinary shares of AgentSoft to certain persons involved
in the formation and ongoing business of AgentSoft, including Dr. Rosenschein.
On March 14, 1996, Dr. Rosenschein was granted options to purchase up to 800
ordinary shares of AgentSoft (8% of the currently outstanding shares on a fully
diluted basis) at an exercise price equal to NIS (New Israel Shekel) 30 per
share. Such options will vest over a three year period which commenced one year
from the date of grant, and will be subject to Dr. Rosenschein's continued
service to AgentSoft. While remaining an employee of the Company, Dr.
Rosenschein is engaged in the day to day affairs of AgentSoft to such degree as
is deemed desirable and in the best interest of the Company and AgentSoft.
COMPENSATION OF DIRECTORS
All Directors hold office until the next annual meeting of
shareholders and the election and qualification of their successors. Directors
receive no cash compensation for serving on the Board of Directors other than
reimbursement of reasonable expenses incurred in attending meetings. The Company
has also agreed to reimburse the current non-employee directors for their
reasonable out-of-pocket expenses incurred in performing various services on
behalf of the Company.
In addition, the Company has granted and will continue to grant, to
its non-employee directors options to purchase Ordinary Shares pursuant to the
Company's Non-Employee Share Option Plan (1995). Under the Non-Employee Share
Option Plan, (i) each non-employee who served as a director of the Company upon
adoption of the Non-Employee Share Plan automatically received an initial grant
of options to purchase 22,500 Ordinary Shares, of which 11,250 vested upon grant
and 11,250 vested one year after the date of grant (ii) each non-employee who
becomes a member of the Board of Directors after the adoption of the
Non-Employee Share Option Plan will automatically receive an initial grant of
options to purchase 22,500 Ordinary Shares, vesting one year from the date of
grant and (iii) upon each anniversary of an initial grant, each director who is
serving as a director
15
of the Company will automatically receive an annual grant of options to purchase
4,500 Ordinary Shares, vesting six months after the date of grant. Options
granted under the Non-Employee Share Option Plan are for a five-year term.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
From August 1996 to November 1996, the Company borrowed an aggregate
of $1,500,000 from IMR, consisting of (i) a $425,000 loan at 12% made in August
1996 and (ii) $1,075,000 in loans at 10% made in October and November 1996. In
connection therewith, IMR was issued warrants to purchase 180,000 Ordinary
Shares and the Company granted IMR certain registration rights with respect to
the Ordinary Shares issuable upon exercise of the IMR Warrants. The Company
repaid the $1,500,000 loan out of the net proceeds of the Company's November,
1996 secondary public offering. IMR also purchased $1,500,000 of the offered
Units in the secondary public offering.
In connection with the formation of AgentSoft, the Company caused
AgentSoft to issue certain shares of AgentSoft and options with respect to
AgentSoft to certain persons involved in the formation and ongoing business of
AgentSoft, including Dr. Rosenschein. AgentSoft currently has 7,960 ordinary
shares outstanding of which 6,700 (approximately 84%) are owned by the Company.
In addition, an aggregate of 1,340 ordinary shares are issuable upon the
exercise of outstanding options, including 800 ordinary shares issuable to Dr.
Rosenschein upon exercise of options with a nominal exercise price of NIS 30 per
share. All of the outstanding options and certain of the outstanding ordinary
shares are subject to vesting over a three year period, which vesting may
accelerate upon certain events. An additional 700 ordinary shares of AgentSoft
are reserved for the grant of options to other AgentSoft employees.
The Company believes that the transactions referred to above were on
terms no less favorable to the Company than terms that could have been obtained
from unrelated third parties. Any future transactions between the Company and
affiliated parties will be approved by a majority of the independent and
disinterested directors and, under certain circumstances, by the audit committee
or the shareholders, and will be on terms no less favorable than those that
could have been obtained from unrelated third parties.
REPORT OF THE COMPENSATION
AND SHARE OPTION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation and Share Option Committee of the Board of
Directors (the "Committee") is composed of Elliott B. Broidy, Roger R. Cloutier
II and Esther Dyson, all independent outside directors. This Committee is
responsible for overseeing and administering executive compensation decisions,
for administering the Company's Share Option Plan, and for making option grants
to employees of the Company thereunder.
Executive compensation decisions are made by the Committee and are
designed to serve the interest of the Company and its shareholders and to
encourage and reward management initiative and good performance. Specifically,
executive compensation decisions are made to:
16
(i) implement compensation practices which allow the Company to
attract and retain highly qualified executives and maintain a
competitive position in the executive marketplace with employers of
comparable size and in similar lines of business;
(ii) enhance the compensation potential of executives who are in the
best position to contribute to the development and success of the
Company by providing the flexibility to compensate individual
performance; and
(iii) directly align the interests of the executives with the
long-term interest of the shareholders and the Company through
compensation opportunities in the form of share option grants
vesting over a three-year period.
These objectives are met through a combination of base salary,
annual cash incentive awards based upon the annual operating performance of the
Company, and long-term incentive opportunities which, to date, have been in the
form of incentive share option grants.
SALARY
The Committee considers, on an annual basis, salary for the
Company's executive officers, including those named in the Summary Compensation
Table. Any salary adjustments are designed to reflect internal comparability and
organizational considerations, as well as competitive data provided by
independent external information. In addition, three of the executive officers
are currently entitled, pursuant to their employment agreement with the Company,
to a non-discretionary annual fifteen percent (15%) increase in their base
salary. This non-discretionary increase is a function of three-year employment
agreements signed in July 1995, and is intended to fully compensate these
executive officers for the cost of living increase payable to employees in
Israel as a result of the relatively high rates of inflation occurring in
Israel.
INCENTIVE AWARDS
Executive officers are eligible for cash awards annually based upon
financial and non-financial results. For the year ended December 31, 1996, no
cash incentive awards were granted. Any cash incentive awards during 1997 will
be based upon pre-established performance targets and objectives.
SHARE OPTION GRANTS
The Company's Employee Share Option Plan (1995), approved by the
shareholders in 1995, permits the Committee to grant incentive share option
grants to executive officers and other employees of the Company. The plan
provides for share option awards giving the grantee the right to purchase
ordinary shares of the Company over a seven (7) year period at the fair market
value per share as of the date of the grant. Options generally vest in three (3)
equal annual installments beginning one (1) year after grant.
The Company's Non-Employee Share Option Plan (1995) has already been
described earlier in this proxy statement. See "Compensation of Directors."
Grants to other non-employees of
17
the Company, such as consultants, are made pursuant to the terms of this plan in
the discretion of the Committee.
CHIEF EXECUTIVE OFFICER COMPENSATION
During 1996, Robert Rosenschein received annual compensation as
President and Chief Executive Officer as set forth in the Summary Compensation
Table.
Todd A. Oseth was hired by the Company on February 6, 1997 to serve
as the Company's President and Chief Executive Officer. His compensation package
is discussed beginning on page 5.
THE COMPENSATION AND
SHARE OPTION COMMITTEE
Elliott B. Broidy
Roger R. Cloutier II
Esther Dyson
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Broidy and Cloutier and Ms. Dyson each served as a member of
the Compensation and Share Option Committee. Neither Mr. Broidy, Mr. Cloutier
nor Ms. Dyson served as a member of the compensation committee of another entity
so as to create any compensation committee interlock or served as an officer of
the Company or any of its subsidiaries so as to create any insider
participation.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who beneficially own
more than ten percent of a registered class of the Company's equity securities,
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission, and Nasdaq. Executive officers, directors and greater than
10% beneficial shareholders are required by Commission regulations to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished to
the Company and written representations from the Company's executive officers,
directors and greater than 10% beneficial shareholders, the Company believes
that during the year ended December 31, 1996, all persons subject to the
reporting requirements of Section 16(a) filed the required reports on a timely
basis, except that initial reports of ownership for Messrs. Moshe Kranc, Robert
Trachtenberg, Jeffrey Schneiderman and three former employees were filed late.
18
SHAREHOLDER RETURN PERFORMANCE GRAPH**
The following graph compares the cumulative total shareholder return
of the Ordinary Shares against the cumulative total return of the Russell 2000
Index and the Russell 2000 Technology Index for the period commencing as of the
close of trading on July 20, 1995 (the effective date of the registration of the
Ordinary Shares under Section 12 of the Exchange Act). As the Ordinary Shares
began trading on July 21, 1995, the price of the Ordinary Shares in the graph
below as of the close of trading on July 20, 1995 is assumed to be the initial
public offering price. The data were furnished by The Bloomberg News Service.
The graph assumes that $100 was invested July 20, 1995 in each of
the Ordinary Shares, the Russell 2000 Index and the Russell 2000 Technology
Index and that all dividends, if any, were reinvested. Figures for the Company
have been restated to show the effect of the 3 for 2 stock split in June, 1996.
The following chart is presented in accordance with the requirements
of the U.S. securities laws. Shareholders are cautioned against drawing any
conclusion from the data contained therein, as past results are not necessarily
indicative of future performance. This chart in no way reflects the Company's
forecast of future financial performance.
COMPARISON OF TOTAL RETURN OF THE COMPANY, RUSSELL 2000 INDEX AND RUSSELL 2000
TECHNOLOGY INDEX
07/20/95 07/31/95 08/31/95 09/30/95 10/31/95 11/30/95 12/31/95 01/31/96 02/29/96 03/31/96
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
ACCENT 100.0 207.7 219.2 242.3 223.1 403.8 361.5 369.2 523.1 592.3
RUSSELL 2000 100.0 100.6 102.5 104.2 99.4 103.6 106.0 105.8 109.0 111.0
RUSSELL 2000 TECHNOLOGY 100.0 100.8 102.4 106.5 100.9 107.3 100.5 95.3 104.5 102.4
04/30/96 05/31/96 06/30/96 07/31/96 08/31/96 09/30/96 10/31/96 11/30/96 12/31/96
-------- -------- -------- -------- -------- -------- -------- -------- --------
ACCENT 676.9 732.8 709.6 354.9 297.2 317.3 181.8 187.6 147.2
RUSSELL 2000 116.9 121.4 116.3 106.0 112.0 116.2 114.3 118.8 121.7
RUSSELL 2000 TECHNOLOGY 116.9 126.2 108.3 92.0 99.5 109.2 105.9 112.4 113.8
- --------
** The disclosure contained in this section of the Proxy Statement is not
incorporated by reference into any prior filings by the Company under the
Securities Act of 1933 or the Securities Exchange Act of 1934 that incorporated
future filings or portions thereof (including this Proxy Statement or the
"Executive Compensation" section of this Proxy Statement).
19
ANNUAL REPORT
A copy of the Company's Annual Report to Shareholders is being
furnished to shareholders on or about April 29, 1997.
PROPOSALS BY SHAREHOLDERS
Proposals that Shareholders wish to include in the Company's Proxy
Statement and form of proxy for presentation at the Company's 1998 Annual
Meeting of Shareholders that meet the requirements of the Securities and
Exchange Commission relating to shareholders' proposals must be received by the
Company at 28 Pierre Koenig Street, P.O. Box 53063, Jerusalem, 91530 Israel,
Attention: Robert Trachtenberg, Secretary, no later than December 31, 1997.
By Order of the Board of Directors
Robert Trachtenberg
Secretary
20
ANNEX A
ACCENT SOFTWARE INTERNATIONAL LTD.
CEO SHARE OPTION PLAN (1997)
A. NAME AND PURPOSE
1. Name: This plan, as amended from time to time, shall be known as the
Accent Software International Ltd. CEO Share Option Plan (1997) (the "Plan").
2. Purpose: The purpose and intent of the Plan is to provide incentive
compensation to Todd A. Oseth, the President and Chief Executive Officer (the
"Grantee") of Accent Software International Ltd. (the "Company") by providing
him with opportunities to purchase shares in the Company, pursuant to the Plan
that was approved by the Board of Directors of the Company.
B. GENERAL TERMS AND CONDITIONS OF THE PLAN
3. Administration:
3.1 The Plan will be administered by a Share Option Committee (the
"Committee"), which will consist of such number of Directors of the Company (not
less than two (2) in number), as may be fixed from time to time by the Board of
Directors of the Company. The Board of Directors shall appoint the members of
the Committee, may from time to time remove members from, or add members to, the
Committee and shall fill vacancies in the Committee however caused. All members
of the Committee shall be disinterested persons within the meaning of Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
3.2 The Committee shall select one of its members as its Chairman and
shall hold its meetings at such times and places as it shall determine. Actions
at a meeting of the Committee at which a majority of its members are present or
acts reduced to or approved in writing by all members of the Committee, shall be
the valid acts of the Committee. The Committee may appoint a Secretary, who
shall keep records of its meetings and shall make such rules and regulations for
the conduct of its business as it shall deem advisable.
3.3 Subject to the terms and conditions of this Plan, the Committee
shall have full authority in its discretion, from time to time and at any time,
to determine (i) the time or times at which the Option Awards shall be granted,
(ii) the schedule and conditions on which such Option Awards may be exercised
and on which such shares shall be paid for, and/or (iii) any other matter which
is necessary or desirable for, or incidental to, the administration of the Plan.
3.4 The Committee may from time to time adopt such rules and
regulations for carrying out the Plan as it may deem best. No member of the
Board of Directors or of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Option Award
granted thereunder.
3.5 The interpretation and construction by the Committee of any
provision of the Plan or of any Option Award thereunder shall be final and
conclusive unless otherwise determined by the Board of Directors.
4. Reserved Shares: The Company has reserved four hundred and fifty
thousand (450,000) authorized but unissued Ordinary Shares (nominal value NIS
0.01 per share) of the Company for purposes of the Plan, subject to adjustment
as provided in paragraph 9, below. Any shares under the Plan, in respect of
which the right hereunder of the Grantee to purchase the same shall for any
reason terminate, expire or otherwise cease to exist, shall no longer be
required to be reserved.
5. Option Awards:
5.1 The Committee shall award to the Grantee options to purchase shares
in the Company available under the Plan as set forth below ("Option Awards").
The Option Awards granted under the Plan are specifically not intended to be
incentive share options within the meaning of Section 422 of the United States
Internal Revenue Code; it is understood that such Option Awards are intended to
be non-qualified options. Option Awards may be granted in accordance with the
specific terms of this Plan at any time after this Plan has been approved by the
Board of Directors of the Company (or prior to this Plan being so approved,
provided that the grant of such Option Awards is made subject to such approval)
and the shares reserved for the Plan effectively created. The date of grant of
each Option Award shall be the date specified by the Committee at the time such
award is made.
5.2 The instrument granting an Option Award shall state, inter alia,
the number of shares covered thereby, the dates when it may be exercised, the
option price, the schedule on which such shares may be paid for and such other
terms and conditions as the Committee at its discretion may prescribe, provided
that they are consistent with this Plan.
5.3 The price per share covered by each Option Award shall be 100% of
the value of each share as determined by the closing bid quotation of the
Company's ordinary shares on the date of grant ("Fair Market Value").
5.4 Upon adoption of this Plan by the Board of Directors, the Committee
shall grant to the Grantee Option Awards as follows:
a) The Grantee shall receive an option to purchase three
hundred thousand (300,000) shares of the Company's ordinary shares at
the Fair Market Value as of the Board of Director's adoption of the
Plan. One hundred thousand (100,000) of these options shall vest on
each of the three (3) following anniversary dates of this grant.
b) The Grantee shall receive an additional grant of an
option to purchase fifty thousand (50,000) shares of the Company's
ordinary shares as of the date of the Option Grant set forth in
subparagraph (a), above, at the same exercise price applicable to such
grant (the "First Option"). The First Option shall vest three (3) days
after the closing bid quotation of the Company's ordinary shares on the
ten (10) preceding business days was equal to or greater than two
hundred percent (200%) of such exercise price (the "First Vesting").
Upon the First Vesting, the Committee shall grant an option to purchase
fifty thousand (50,000) additional shares of the Company's ordinary
shares at an exercise price equal to two hundred percent (200%) of the
exercise price applicable to the First Option Grant (the "Second Option
Grant"). The Second Option Grant shall vest three (3) days after the
closing bid quotation of the Company's ordinary shares on the ten (10)
preceding business days was equal to or greater than three hundred
percent (300%) of such exercise price (the "Second Vesting"). Upon the
Second Vesting, the Committee shall grant an option to purchase fifty
thousand (50,000) additional shares of the
Company's ordinary shares at an exercise price of three
hundred percent (300%) of the exercise price applicable to the First
Option Grant (the "Third Option Grant"). The Third Option Grant shall
vest three (3) days after the closing bid quotation of the Company's
ordinary shares on the ten (10) preceding business days was equal to or
greater than four hundred percent (400%) of such exercise price (the
"First Vesting").
6. Exercise of Option Award:
6.1 The Option Award granted pursuant to paragraph 5.4(a), above, shall
be exercisable for a period of five (5) years from the date they were granted,
pursuant to the terms and conditions of this Plan. Option Awards granted
pursuant to paragraph 5.4(b), above, shall be exercisable for a period of three
(3) years from the date they were granted, pursuant to the terms and conditions
of this Plan.
6.2 An Option Award, or any part thereof, shall be exercisable by the
Grantee's signing and returning to the General Counsel of the Company a "Notice
of Exercise" in such form and substance as may be prescribed by the Committee
from time to time.
6.3 Anything herein to the contrary notwithstanding, but without
derogating from the provisions of paragraph 10 hereof, if any Option Award, or
any part thereof, has not been exercised and the shares covered thereby not paid
for within the exercise periods set forth in paragraph 6.1, above, such Option
Award, or such part thereof, and the right to acquire such shares shall
terminate, and all interests and rights of the Grantee in and to the same shall
expire.
6.4 Each payment for shares under an Option Award shall be in respect
of a whole number of shares, shall be effected in cash or by a cashier's or
certified check payable to the order of the Company, or such other method of
payment acceptable to the Company as determined by the Committee, and shall be
accompanied by a notice stating the number of shares being paid for thereby.
7. Termination of Employment:
7.1 In General: Subject to the provisions of paragraph 7.2 hereof, and
of his individual employment agreement, if a Grantee should, for any reason,
cease to be employed by the Company, all of his rights, if any, in respect of
all Option Awards granted to him under the Plan which are not yet exercisable on
the date of the cessation of employment shall terminate and, unless otherwise
determined by the Board of Directors of the Company, all of his rights in
respect of such Option Awards which are exercisable on the date of the cessation
of employment, but are not exercised within 90 days after such cessation of
employment, shall terminate upon the expiration of such 90 day period. In the
event of resignation or discharge of the Grantee from the employ of the Company
or a subsidiary thereof, his employment shall, for the purposes of this
paragraph 7.1, be deemed to have ceased upon the delivery to the Company of
notice of resignation or the delivery to the employee of notice of discharge, as
the case may be, irrespective of the effective date of such resignation or
discharge. In the event the employment of the Grantee is terminated by the
Company for cause, the Grantee shall not be entitled to exercise the Option
Awards subsequent to the time of delivery of the notice of discharge.
7.2 Death, Disability, Retirement: Anything herein to the contrary
notwithstanding: If the Grantee should die, or be unable to continue to be
employed by the Company by reason of becoming incapacitated while in the employ
of the Company as a result of an accident or illness or other cause which is
approved by the Committee, or if the Grantee should retire, the Grantee shall,
subject to approval of the Committee (which shall not be unreasonably withheld),
continue to enjoy rights under the Plan on such terms and conditions as the
Committee in its discretion may determine.
Demand Registration Rights. Piggyback Registration Rights:
8.1 The Option Grants and the ordinary shares issuable upon exercise
thereof are not and, except as provided herein, will not be registered under the
Securities Act of 1933 (the "Securities Act") or state securities laws
8.2 Once the option to purchase the first one hundred thousand
(100,000) shares of the Company's ordinary shares has vested as set forth in
paragraph 5.4 (a), above, the Grantee shall have a one-time right to demand the
registration of all or part of the ordinary shares underlying the options to be
granted pursuant to paragraph 5.4, above ("Demand Registration").
8.3 In addition to the Demand Registration rights set forth in
paragraph 8.2, above, should the Company propose (whether or not for its own
account) to register any of its securities under the Securities Act, the Company
shall give written notice to the Grantee of its intention to effect such a
registration not later than 30 days prior to the anticipated date of filing with
the Securities and Exchange Commission ("SEC") of a registration statement,
which notice shall offer the Grantee the opportunity, with the approval of the
Company's managing underwriter or underwriters, if any, to include in such
registration statement any of the ordinary shares underlying the Option Grants
issued pursuant to this Plan the Grantee may request to register ("Piggyback
Registration"). Any entitlement to a Piggyback Registration as set forth in this
Plan shall be applicable only to the ordinary shares underlying such Option
Grants.
8.4 Subject to the provisions of this Plan, the Company will use its
reasonable business efforts to cause all the ordinary shares for which the
Grantee requested the Piggyback Registration to be registered under the
Securities Act to the extent required to permit the disposition by the Grantee
of such shares; provided that if such registration shall be in connection with
an underwritten public offering and if the managing underwriter or underwriters
shall advise the Company in writing that in their opinion the amount of
securities requested to be included in such registration pursuant to this
section and pursuant to any other rights granted by the Company to holders of
its securities to request inclusion of any such securities in such registration
exceeds the number of securities which can be sold in the offering without
materially adversely affecting the offering price, the Company may first include
in such registration all securities the Company proposes to sell, and the
Grantee shall accept a reduction (including a total elimination) in the number
of shares to be included in such registration. Nothing in this section shall
limit the Company's ability to withdraw a registration statement it has filed
either before or after effectiveness.
8.5 If and whenever the Company is required by the provisions of
paragraph 8.2 and/or 8.3, above, to effect the registration of any of the
ordinary shares underlying the Option Grants under the Securities Act, the
Company will as expeditiously as reasonably possible and at its expense:
(a) prepare and file with the SEC a registration statement
with respect to such shares and use reasonable business efforts to
cause such registration statement to become and remain effective for
the period of time required for the disposition of such shares as
contemplated thereby, not to exceed six months (the "Disposition
Period");
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for the Disposition Period and as may be necessary
to comply with the provisions of the Securities Act with respect to the
disposition of all shares covered by such registration statement in
accordance with the method of disposition set forth in such
registration statement for such period;
(c) furnish to the Grantee and to each underwriter such
number of copies of the registration statement and the prospectus
included therein (including each preliminary prospectus and each
document incorporated by reference therein to the extent then required
by the rules and regulations of the SEC) as such persons may reasonably
request in order to facilitate the public sale or other disposition of
the Shares covered by such registration statement;
(d) during the Disposition Period immediately notify in
writing the Grantee and each underwriter of the happening of any event
as result of which the prospectus contained in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing (in which case, the
Company shall promptly prepare and file with the SEC and provide the
Grantee with revised or supplemental prospectuses and if so requested
by the Company in writing, the Grantee shall promptly take action to
cease making any offers of the shares until receipt and distribution of
such revised supplemental prospectuses).
8.6 In connection with any registration hereunder, the Grantee shall
furnish promptly to the Company in writing such information (together with such
supplements as may be necessary from time to time) with respect to himself and
the proposed disposition as shall be reasonably necessary in order to ensure
compliance with federal and applicable state securities laws.
9. Adjustments: Upon the happening of any of the following described
events, a Grantee's rights to purchase shares under the Plan shall be adjusted
as hereinafter provided;
9.1 In the event the Ordinary Shares of the Company shall be subdivided
or combined into a greater or smaller number of shares or if, upon a merger,
consolidation, reorganization, recapitalization or the like, the Ordinary Shares
of the Company shall be exchanged for other securities of the Company or of
another corporation, the Grantee shall be entitled, subject to the conditions
herein stated, to purchase such number of Ordinary Shares or amount of other
securities of the Company or such other corporation as were exchangeable for the
number of Ordinary Shares of the Company which the Grantee would have been
entitled to purchase except for such action, and appropriate adjustments shall
be made in the purchase price per share to reflect such subdivision, combination
or exchange.
9.2 In the event that the Company shall issue any of its Ordinary
Shares or other securities as bonus shares (stock dividend) upon or with respect
to any shares which shall at the time be subject to a right of purchase by the
Grantee hereunder, the Grantee upon exercising such right shall be entitled to
receive (for the purchase price payable upon such exercise), the shares as to
which he is exercising such right and, in addition thereto (at no additional
cost), such number of shares of the class or classes in which such bonus shares
(stock dividend) were declared, and such amount of shares and the amount of cash
in lieu of fractional shares, as is equal to the shares which he would have
received had he been the Grantee of the shares as to which he is exercising his
right at all times between the date of the granting of such right and the date
of its exercise.
9.3 Upon the happening of any of the foregoing events, the class and
aggregate number of Ordinary Shares issuable pursuant to the Plan (as set forth
in paragraph 6, hereof), in respect of which Option Awards have not yet been
granted, shall also be appropriately adjusted to reflect the events specified in
paragraphs 9.1 and 9.2, above.
9.4 The Committee shall determine the specific adjustments to be made
under this section 9, and its determination shall be conclusive.
10. Change in Control: In the event that a new investor (defined as an
entity which holds less than ten percent of the outstanding shares of the
Company which can be voted on the date this Plan is approved) gains control of
fifty one or more percent of the outstanding shares of the Company which can be
voted, all options which have been granted pursuant to this Plan but which have
not yet vested shall vest immediately.
11. Assignability and Sale of Shares:
11.1 No shares purchasable hereunder which were not fully paid for,
shall be assignable or transferable by the Grantee. For avoidance of doubt, the
foregoing shall not be deemed to restrict the transfer of the Grantee's rights
in respect of Option Awards or shares purchasable pursuant to the exercise
thereof upon the death of the Grantee to his estate or other successors by
operation of law or will, whose rights therein shall be governed by paragraph
7.2 hereof.
11.2 No Option Award may be transferred other than by will or by the
laws of descent and distribution, and during the Grantee's lifetime an Option
Award may be exercised only by him.
12. Securities Act of 1933: By his exercise of an Option Award
hereunder, the Grantee agrees not to sell, transfer or otherwise dispose of any
of the shares so purchased by him except in compliance with the Securities Act,
and the rules and regulations thereunder and the Grantee further agrees that all
certificates evidencing any of such shares shall be appropriately legended to
reflect such restriction. Except as set forth in section 8, above, the Company
does not obligate itself to register any shares under the Securities Act.
13. Term and Amendment of the Plan:
13.1 The Plan was adopted by the Board of Directors of the Company on
April 29, 1997, and shall expire on April 28, 2007 (except as to Option Awards
outstanding on that date).
13.2 The Board of Directors may, at any time and from time to time,
terminate or amend the Plan in any respect except that, without the prior
approval of the Shareholders of the Company; the total number of Ordinary Shares
which may be issued under the Plan may not be increased (except by adjustment
pursuant to section 9, above). In no event may any action of the Company alter
or impair the rights of the Grantee, without his consent, under any Option Award
previously granted to him.
14. Continuance of Employment: Neither the Plan nor the Agreement shall
impose any obligation on the Company or a subsidiary thereof (to the extent
there shall be one or more), to continue the Grantee in its employ, and nothing
in the Plan or in any Option Award granted pursuant thereto shall confer upon
the Grantee any right to continue in the employ of the Company or a subsidiary
thereof, or restrict the right of the Company or a subsidiary thereof, to
terminate such employment at any time.
15. Governing Law: The Plan and all instruments issued thereunder or in
connection therewith, shall be governed by, and interpreted in accordance with,
the laws of the State of Israel.
16. Application of Funds: The proceeds received by the Company from the
sale of shares pursuant to Option Awards granted under the Plan will be used for
general corporate purposes of the Company or any subsidiary thereof.
17. Tax Consequences: Any tax consequences arising from the grant or
exercise of any Option Award, from the payment for shares covered thereby or
from any other event or act (of the corporation that employs the Grantee or the
Grantee) hereunder, shall be borne solely by the Grantee. Furthermore, the
Grantee shall agree to indemnify the corporation that employs the Grantee and
hold it harmless against and from any and all liability for any such tax or
interest or penalty thereon, including without limitation, liabilities relating
to the necessity to withhold, or to have withheld, any such tax from any payment
made to the Grantee.
PROXY
ACCENT SOFTWARE INTERNATIONAL LTD.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS
ON MAY 28, 1997 AT 10:00 A.M. AT
THE LAROMME HOTEL, 11 JABOTINSKY STREET, JERUSALEM, ISRAEL
The undersigned shareholder of Accent Software International Ltd., a
company organized under the laws of the State of Israel (the "Company"), hereby
appoints Robert Rosenschein, Moshe Kranc and Robert Trachtenberg, and each of
them, as attorneys and proxies, each with power of substitution and revocation,
to represent the undersigned at the Annual General Meeting of Shareholders of
the Company to be held at 10:00 a.m. on Wednesday, May 28, 1997, at The Laromme
Hotel, 11 Jabotinsky Street, Jerusalem, Israel, and at any adjournment or
postponement thereof, with authority to vote all shares held or owned by the
undersigned in accordance with the directions indicated herein.
Receipt of the Notice of the Annual General Meeting of Shareholders
dated April 29, 1997, the Proxy Statement furnished therewith, and a copy of the
Company's annual financial statements for the year ended December 31, 1996 is
hereby acknowledged.
Please return this proxy properly executed in the pre-addressed,
postage paid envelope which is enclosed with this proxy.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ITEMS 1, 2 AND 3 AND PURSUANT TO ITEM 4.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
PLEASE DATE, SIGN AND MAIL YOUR PROXY
CARD BACK AS SOON AS POSSIBLE!
ANNUAL GENERAL MEETING OF SHAREHOLDERS
ACCENT SOFTWARE INTERNATIONAL LTD.
MAY 28, 1997
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE
ITEMS LISTED BELOW
VOTE WITHHELD
FOR ALL NOMINEES FOR ALL NOMINEES
Item 1. Election of Directors
FOR THE SLATE, EXCEPT VOTE WITHHELD FROM THE FOLLOWING NOMINEES:
- -------------------------------
Nominees: Roger R. Cloutier, II
Robert S. Rosenschein
Todd A. Oseth
Dr. Jeffrey S. Rosenschein
Elliot B. Broidy
Esther Dyson
Meldon E. Levine
Mark A. Tebbe
FOR AGAINST ABSTAIN
Item 2. Approval of the Compensation
of Todd A. Oseth, President,
Chief Executive Officer and
Director Nominee.
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FOR AGAINST ABSTAIN
Item 3. Appointment of Luboshitz,
Kasierer & Co. as independent
auditors and authorization of the
Board of Directors of the
Company to determine the level
of compensation of the
independent auditors.
Item 4. In their discretion, the proxies are authorized to vote upon
such other business as may properly be presented at the meeting or
any adjournment thereof.
__________________ _______________________________ Dated:__________, 1997
(SIGNATURE) (SIGNATURE IF HELD JOINTLY)
Note: If acting as attorney, executor, administrator, trustee,
guardian, etc. you should so indicate when signing. If the
signer is a corporation, please sign in full corporate name by
duly authorized officer. If shares are held jointly, each
shareholder named should sign.
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