SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant |X|
Filed by a party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary proxy statement: |_| Confidential, for Use of the
|X| Definitive proxy statement Commission Only (as permitted
|_| Definitive additional materials by Rule 14a-6(e)(2))
|_| Soliciting material pursuant to
Rule 14a-11(c) or Rule 14a-12
Fundtech Ltd.
(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.
(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: Registrant
(4) Date filed:
FUNDTECH LTD.
12 Ha'hilazon Street, 5th Floor
Ramat-Gan, Israel
[FUNDTECH LTD. LOGO]
January 4, 2002
Dear Shareholder:
You are cordially invited to attend the 2001 Annual Meeting of
Shareholders of Fundtech Ltd. (the "Company") on January 31, 2002, beginning at
5:00 p.m., local time, at the Company's offices at 12 Ha'hilazon Street, 5th
floor, Ramat-Gan, Israel. We look forward to greeting as many of you as can
attend the Annual Meeting.
Holders of the Company's Ordinary Shares are being asked to vote on
the matters listed in the enclosed Notice of Annual Meeting of Shareholders.
Your Board of Directors recommends a vote "FOR" all of the matters set forth in
the Notice.
Whether or not you plan to attend the Annual Meeting, it is
important that your Ordinary Shares be represented and voted at the Annual
Meeting. Accordingly, after reading the enclosed Notice of Annual Meeting and
accompanying Proxy Statement, please sign, date and mail the enclosed proxy card
in the envelope provided.
At the Annual Meeting, we will also report to you on the Company's
current operations and outlook. Members of Board of Directors and management
will be pleased to respond to any questions you may have.
Your cooperation is appreciated.
Very truly yours,
/s/ Reuven Ben-Menachem
---------------------------
Reuven Ben-Menachem
Chairman of the Board and Chief Executive
Officer
FUNDTECH LTD.
12 Ha'hilazon Street, 5th Floor
Ramat-Gan, Israel
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders
of Fundtech Ltd.:
The Annual Meeting of Shareholders of Fundtech Ltd. ("Fundtech" or the
"Company") will be held at the Company's offices at 12 Ha'hilazon Street, 5th
floor, Ramat-Gan, Israel, on January 31, 2002, at 5:00 p.m., local time, for the
following purposes:
1. To elect the panel of six directors of the Company, the directors to serve
until his/her respective successor is elected and qualified. George M.
Lieberman who was elected as an external director for the purpose of the
Companies Law, 5759-1999 ("Companies Law") at the previous annual meeting
will continue to serve out his three (3) year term (from the date of his
election) as an external director of the Company ("Proposal 1").
2. To elect Ben-Zion Zilberfarb from among the Panel to serve as an external
director of the Company for a fixed period of three (3) years from the
date of his election. If elected, Mr. Zilberfarb will join Mr. Lieberman
as one of the two external directors required by the Companies Law
("Proposal 2").
3. To ratify and approve an amendment to the Director's Option Plan
increasing the number of options that may be granted pursuant to such
Directors' Option Plan of the Company and to increase the number of
Ordinary Shares reserved for issuance upon exercise of the options granted
pursuant to such Directors' Option Plan ("Proposal 3").
4. To approve the compensation of the Company's directors (other than Reuven
Ben Menachem and the external directors) for serving on the Board of
Directors following their election at this Annual Meeting and to approve
the compensation of the external directors for serving on the Board of
Directors ("Proposal 4").
5. To approve the compensation of Gil Weiser, a director of the Company, for
consulting services provided by him to Biveroni Batschelet Partners AG,
the Company's indirectly wholly owned Swiss subsidiary ("Proposal 5").
6. To ratify and approve the compensation of (including the grant of stock
options to) Mr. Reuven Ben-Menachem, the Chief Executive Officer and a
director of the Company ("Proposal 6").
7. To ratify and approve amendments to the 1997 Israel Plan and the 1997 U.S.
Plan of the Company, (collectively the "1997 Plans"), decreasing the
aggregate number of options that may be granted pursuant to such 1997
Plans and decreasing the number of Ordinary Shares reserved for issuance
upon exercise of the options granted pursuant to such 1997 Plans. To
ratify and approve amendments to the 1999 Option Plan of the Company
increasing the aggregate number of options that may be granted pursuant to
such 1999 Option Plan and increasing the number of Ordinary Shares
reserved for issuance upon exercise of the options granted pursuant to
such 1999 Option Plan. Such increase will be equal to the total reductions
in the 1997 Plans as well as the expiration of options previously
allocated to the recently lapsed 1996 Israel Plan and the 1996 U.S. Plan
(collectively "Proposal 7").
8. To ratify the appointment of Kost, Forer and Gabbay, a member of Ernst &
Young International, independent certified public accountants, as auditors
for Fundtech for fiscal year 2001 and to authorize the Board of Directors
to set the remuneration for such auditors ("Proposal 8").
9. To ratify and approve amendments to the Articles of Association of the
Company ("Proposal 9").
10. To ratify and approve the purchase by the Company of liability insurance
for the benefit of the directors of the Company, the undertaking in
advance by the Company to indemnify such directors, and the exemption of
such directors from their duty of care, all to the fullest extent and as
permitted under the Companies Law ("Proposal 10").
11. To act upon such other matters as may properly come before the Annual
Meeting or any adjournment or adjournments thereof.
In addition, the Annual Meeting shall include a general discussion with
respect to the financial statements contained in the Company's Annual Report, a
copy of which is enclosed herein. Only shareholders of record at the close of
business on December 28, 2001, are entitled to notice of, and to vote at, the
Annual Meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING AND REGARDLESS OF THE
NUMBER OF ORDINARY SHARES YOU OWN, YOU ARE REQUESTED TO FILL IN, DATE AND SIGN
THE ENCLOSED PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY,
AND TO MAIL IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
You may revoke your proxy by filing with the Secretary of the Company a
written revocation or a proxy bearing a later date at any time prior to the time
it is voted, or by voting in person at the Annual Meeting.
By Order of the Board of Directors,
/s/ Michael S. Hyman
--------------------------------
Michael S. Hyman
Vice President, General Counsel and
Secretary
Ramat-Gan, Israel
January 4, 2002
2
FUNDTECH LTD.
12 Ha'hilazon Street, 5th Floor
Ramat-Gan, Israel
--------------------
PROXY STATEMENT
--------------------
General Information
The accompanying proxy is solicited by the Board of Directors of
Fundtech Ltd., an Israeli company ("Fundtech" or the "Company"), for use at the
Annual Meeting of Shareholders of the Company to be held on January 31, 2002, at
5:00 p.m., local time, at the Company's offices at 12 Ha'hilazon Street 5th
Floor, Ramat-Gan, Israel, and at any adjournment or adjournments thereof (the
"Annual Meeting"). This Proxy Statement is being furnished to holders of
Ordinary Shares, par value NIS. 0.01 ("Ordinary Shares"), at the close of
business on December 28, 2001 (Eastern Standard Time) (the "Record Date").
All of the expenses involved in preparing, assembling and mailing
this Proxy Statement and the accompanying materials will be paid by the Company.
In addition to solicitation by mail, directors, officers and regular employees
of the Company may solicit proxies by telephone, telegram or by personal
interviews. Such persons will receive no additional compensation for such
services. The Company will reimburse brokers and certain other persons for their
charges and expenses in forwarding proxy materials to the beneficial owners of
Ordinary Shares.
Gil Gadot, Executive Vice President of Technology and General
Manager of Israel Operations and Gil Weiser, a director of the Company, have
each been selected as proxies by the Board of Directors of the Company with
respect to the matters to be voted upon at the Annual Meeting.
All Ordinary Shares represented by properly executed proxies
received at least twenty-four (24) hours prior to the Annual Meeting and not
revoked prior to the Annual Meeting in accordance with the procedure therefor
will be voted and will be voted as specified in the instructions indicated in
such proxies. If no instructions are indicated, such proxies will be voted in
accordance with the recommendations of the Board of Directors contained in this
Proxy Statement and, in the discretion of either person named in the proxy, on
such other matters as may properly come before the Annual Meeting.
A shareholder may revoke his, her or its proxy at any time prior to
use of such proxy by delivering to the Secretary of the Company a signed notice
of revocation, or a later dated and signed proxy, or by attending the Annual
Meeting and voting in person. Attendance at the Annual Meeting will not in
itself constitute the revocation of proxy.
This Proxy Statement was preceded or is accompanied by Fundtech's
Annual Report to shareholders for the fiscal year ended December 31, 2000. This
Proxy Statement and the accompanying form of proxy are being furnished to
shareholders on or about January 4, 2002.
Shareholders Entitled to Vote
Shareholders of record owning Ordinary Shares on the Record Date are
entitled to notice of, and to vote at, the Annual Meeting. On the Record Date,
there were 14,261,596 Ordinary Shares outstanding (this figure excludes 50,002
Deferred Ordinary Shares, par value NIS. 0.01, which do not have voting or any
other rights other than the right to receive par value upon liquidation), with
each Ordinary Share entitled to one vote per share on each matter submitted to
shareholders for consideration at the Annual Meeting.
Quorum; Required Vote
The presence, in person or by proxy, of at least two holders of
record holding at least thirty three and a third percent (33 1/3%) of the issued
and outstanding Ordinary Shares entitled to vote at the Annual Meeting is
necessary to constitute a quorum and is necessary to hold the Annual Meeting.
The affirmative vote of a majority of the Ordinary Shares present at
the Annual Meeting is required for each of the following: (i) to elect the Panel
of directors (Proposal 1); (ii) to elect Ben-Zion Zilberfarb as an external
director of the Company to serve for a fixed period of three (3) years from the
date of his election (Proposal 2); (iii) to ratify and approve an amendment to
the Directors' Option Plan increasing in the number of options that may be
granted pursuant to such Directors' Option Plan of the Company and increasing
the number of Ordinary Shares reserved for issuance upon exercise of the options
granted pursuant to such Directors' Option Plan (Proposal 3); (iv) to approve
the compensation of the Company's directors for the duration of each director's
service (Proposal 4); (v) to approve the compensation of Gil Weiser, a director
of the Company for consulting services provided to Biveroni Batschelet Partners
AG ("BBP"), the Company's indirectly wholly owned Swiss subsidiary (Proposal 5);
(vi) to ratify and approve the compensation of (including the grant of stock
options) to Mr. Reuven Ben-Menachem, a director and Chief Executive Officer of
the Company (Proposal 6); (vii) to ratify and approve amendments to the 1997
Israel Plan and the 1997 U.S. Plan of the Company, (collectively the "1997
Plans") decreasing the aggregate number of options that may be granted pursuant
to such 1997 Plans and decreasing the number of Ordinary Shares reserved for
issuance upon exercise of the options granted pursuant to such 1997 Plans; and
to ratify and approve amendments to the 1999 Option Plan increasing the
aggregate number of options that may be granted pursuant to such 1999 Option
Plan and increasing the number of Ordinary Shares reserved for issuance upon
exercise of the options granted pursuant to such 1999 Option Plan; Such increase
will be equal to the total reductions in the 1997 Plans as well as the
expiration of options previously allocated to the recently lapsed 1996 Plan and
the 1996 U.S. Plan (collectively the "1996 Plans") (Proposal 7) (For a summary
of the material terms of the 1996 Plans, the 1997 Plans and the 1999 Option
Plan, see "Executive Compensation - Stock Option Plans"); (viii) to ratify the
appointment of Kost, Forer and Gabbay, a member of Ernst and Young
International, as the Company's independent auditors for the fiscal year 2001,
and authorize the Board of Directors to set the remuneration for such auditors
(Proposal 8); and (x) to provide liability insurance for the benefit of the
Company's directors, to undertake in advance to indemnify such directors and to
exempt such directors from their duty of care, all to the fullest extent and as
permitted under the Israeli Companies Law ("Companies Laws") (Proposal 10).
The affirmative vote of seventy five percent (75%) or more of the
Ordinary Shares present at the Annual Meeting is required to approve amendments
to the Company's Articles of Association (Proposal 9). With respect to the
election of Ben-Zion Zilberfarb to serve as an external director (Proposal 2),
the majority must include either (i) at least one-third (1/3) of the shares of
non-controlling shareholders voting on the matter or (ii) the total shares held
by non-controlling shareholders voting against the election may not represent
more than one percent of the voting rights in the Company (the "Special
Majority").
On each matter submitted to shareholders for consideration at the
Annual Meeting, only Ordinary Shares that are voted in favor of such matter will
be counted towards approval of such matter. Ordinary Shares present at the
Annual Meeting that are not voted for a particular matter or Ordinary Shares
present by proxy where the shareholder properly withheld authority to vote for
such matter (including broker non-votes) will not be counted toward approval of
such matter.
A broker non-vote occurs when a nominee holding Ordinary Shares 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. On all matters considered
at the Annual Meeting, abstentions and broker non-votes will be treated as
neither a vote "for" nor "against" the matter, although they will be counted as
present in determining if a quorum is present.
2
PROPOSAL 1 - ELECTION OF DIRECTORS
The Board of Directors of the Company has nominated six (6) persons
to serve as directors of the Company (the "Panel"). All of the nominees, other
than Ben-Zion Zilberfarb, currently serve as directors of the Company and have
been nominated to serve as directors until the close of the next annual meeting.
George M. Lieberman was previously elected as an external director of the
Company and shall continue to serve as an external director for the remainder of
his three (3) year term (from the date of his election at the previous annual
meeting held on November 30, 2000). Accordingly, Mr. Lieberman will not stand
for election at this Annual Meeting. Ben-Zion Zilberfarb has been nominated to
serve as the second external director of the Company for a fixed period of three
(3) years from the date of his election at this Annual Meeting. Mr. Zilberfarb
will replace Jay B. Morrison, who will resign from his position as external
director effective and pending upon election of his replacement at the Annual
Meeting.
Each of the below-named nominees has consented to being named in
this Proxy Statement and will serve as a director (and in the case of Ben-Zion
Zilberfarb, as an external director) if elected. If at the time of the Annual
Meeting, however, any of the below-named nominees (other than Ben-Zion
Zilberfarb, who has been nominated as an external director) should be unable or
decline to serve as a director, the persons named as proxies herein will vote
for such substitute nominee or nominees as the Board of Directors recommends, or
will vote to allow the vacancy created thereby to remain open until filled by
the Board of Directors.
The affirmative vote of the holders of a majority of the voting
power represented at the Annual Meeting in person or by proxy is necessary to
elect each of the below as directors. In addition, the affirmative vote of a
Special Majority (as defined above) represented at the meeting in person or by
proxy is necessary to elect Ben-Zion Zilberfarb as an external director.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
PROPOSAL TO ELECT THE PANEL AS DIRECTORS OF THE COMPANY.
INFORMATION CONCERNING DIRECTORS AND NOMINEES
The following table lists the name, age and positions with the
Company of each of the nominees and the month and year in which each director
was first elected.
Position with Served as
Name Age the Company Director Since
---- --- ------------- --------------
Reuven Ben-Menachem 41 Chairman of the Board, April 1993
Chief Executive
Officer and Director
Yeoshua Agassi 53 Director June 2001
Rina Shainski 42 Director March 1999
Meir Shannie 56 Director June 2001
Gil Weiser 60 Director July 2000
Ben-Zion Zilberfarb 52 Not currently serving Nominee for
External Director
3
Nominees For Director
Reuven Ben-Menachem, a co-founder of Fundtech, has served as the
Chief Executive Officer and as a director of the Company since its inception in
April 1993 and as the Chairman of the Board of Directors of the Company since
August 1998. Before founding the Company, Mr. Ben-Menachem was employed at
Logica Data Architects, a funds transfer software provider located in Waltham,
Massachusetts, most recently as a Technical Director and a Product Manager. From
January 1984 until June 1986, Mr. Ben-Menachem served as Director of Banking
Systems at Manof Communications Systems, a middleware software provider located
in Tel Aviv, Israel. Prior thereto, Mr. Ben-Menachem served as a senior
programmer/analyst in the Israeli Air Force. Mr. Ben Menachem studied for a B.A.
in Business at Haifa University.
Yeoshua Agassi, has served as a director of Fundtech since June
2001. Since the Spring of 2001, Mr. Agassi has served as Vice President of
Business Development of Clal Industries and Investments Ltd. ("CII"), one of
Israel's largest investment and holding companies. CII, located in Tel Aviv,
Israel, is invested primarily in the industrial and technology sectors and holds
a major equity position in Fundtech. See "Security Ownership of Certain
Beneficial Owners and Management." During 2000, Mr. Agassi served as the General
Manager of Leumicard Ltd., one of Israel's leading credit card providers and
servicers located in Bene Brak, Israel. From 1993 until 1998, Mr. Agassi served
as the General Manager of Israeli Direct Insurance Company ("IDI"), a direct
insurer located in Tel Aviv, which he co-founded in 1993. Before founding IDI,
Mr. Agassi was employed from 1987 until 1992 at The Magen Insurance Company, a
direct insurer located in Tel Aviv, most recently as the Vice President of
Operations. Mr. Agassi has earned an MBA in Marketing from Bar Ilan University,
as well as a B.A. in Economics from Tel Aviv University.
Rina Shainski, has served as a director of Fundtech since March
1999, after serving as an alternate director of the Company since August 1998.
Ms. Shainski has served as General Partner of Carmel Ventures Fund, a venture
capital fund located in Hezlia Pituach, since April 2000. From 1997 until 2000,
Ms. Shainski served as Vice President of Business Development of Clal Industries
and Investments Ltd., one of Israel's largest investment and holding companies.
CII, located in Tel Aviv, Israel, is invested primarily in the industrial and
technology sectors and holds a major equity position in Fundtech. See "Security
Ownership of Certain Beneficial Owners and Management." From 1989 until 1996,
Ms. Shainski was employed by Tecnomatix Technologies Ltd. (Israel) located in
Hezlia Pituach, a leading provider of Manufacturing Process Management software,
most recently as Director, Research and Development and Vice President, Business
Development. Ms. Shainski holds an M.Sc. in Computer Science from the Weizmann
Institute of Science, Israel and a B.Sc. in Physics from Tel Aviv University.
Ms. Shainski is a graduate of the International Executive Program in Insead,
Fontainbleau, France.
Meir Shannie, has served as a director of Fundtech since June 2001.
Mr. Shannie has served as the Chief Executive Officer and President of CII since
January 2001. See "Security Ownership of Certain Beneficial Owners and
Management." From 1997 through 2000, Mr. Shannie was a private businessman
consulting for a number of business ventures and companies in Israel. From 1982
until 2000, Mr. Shannie served on the Board of Directors of Sano Bruno's
Enterprises Ltd., a leading manufacturer of cleaning and home care products
located in Hod Hasharon. From 1996 until 2000, Mr. Shannie served on the Board
of Directors of Eden Springs Ltd., a manufacturer and distributor of mineral
water located in Bene Brak. During 2000, he served on the Board of Directors of
Cellcom Israel Ltd., a leading cellular communications provider in Israel
located in Herzlia. From 1993 until 1997, Mr. Shannie served as the Chairman of
Israeli Direct Insurance Company, a direct insurer located in Tel Aviv, Israel,
which he co-founded in 1993. Presently Mr. Shannie serves as Chairman of the
Boards of Directors of Polgat Ltd., a manufacturer of wholesale clothing located
in Kiryat Gat and Scitex Corporation Ltd., a holding company focused on digital
imaging technologies located in Herzlia and Tel Aviv, as well as on the Boards
of Directors of Elite Industries Ltd., a food and candy manufacturer located in
Ramat-Gan, American Israeli Paper Mills Ltd., a manufacturer and distributor of
paper and paper goods located in Hadera, ECI Telecom Ltd., a provider of
integrated network solutions for digital telecommunications and data
transmission systems to network service providers located in Israel and Creo
Products Ltd, a manufacturer and developer of solutions for the graphic arts
industry located in Vancouver, Canada, all publicly traded companies. Mr.
Shannie has earned both an MBA and a B.A. from Tel Aviv University.
4
Gil Weiser, has served as a director of Fundtech since July 2000 and
as a consultant to BBP, the Company's indirectly wholly owned Swiss subsidiary
since May 2001. Since December 2000, Mr. Weiser has served as the Vice Chairman
of Orama (Tel Aviv), an Israeli/U.S. merchant bank located in Tel Aviv, Israel.
In addition, during 2000 and 2001, Mr. Weiser has consulted for and had other
affiliations with a number of other Israeli high-tech companies. From early 1999
until the Spring 2000, Mr. Weiser served as the General Manager of Hewlett
Packard (Israel), a distributor of Hewlett Packard products and services located
in Tel Aviv, Israel. Prior to serving as General Manager of Hewlett Packard
(Israel), Mr. Weiser served from 1995 until 1998 as President and Chief
Executive Officer of Computation and Measurement Systems Ltd. (CMS) located in
Tel Aviv, the Israeli representative of Hewlett Packard. From 1993 to 1995, Mr.
Weiser served as President and Chief Executive Officer of Fibronics
International Inc., a worldwide provider of network solutions for complex data
operations in heterogeneous computing environments located in Haifa, Israel.
From 1976 until 1993, Mr. Weiser served as Managing Director of Digital Israel
located in Herzlia, a wholly owned subsidiary of Digital Equipment Corporation.
Mr. Weiser has and continues to hold significant public positions including
Chairman of the Multinational Companies Forum and Vice Chairman of the Israeli
Management Center. Presently he serves as Chairman of the Executive Board of
Haifa University, one of the leading institutions of higher education in Israel.
Mr. Weiser has earned a B.S.E.E. in Electrical Engineering from the Technion as
well as an M.S.E.E. in Electronics Computer Sciences from the University of
Minnesota.
Nominees For External Director
Ben-Zion Zilberfarb, is a new nominee to serve on the Board of
Directors of Fundtech. Dr. Zilberfarb has served as a Professor of Economics
since 1988 and head of the A. Meir Center for Banking at Bar-Ilan University
located in Ramat-Gan, Israel, since the fall of 2000. Dr. Zilberfarb also served
as the Director General of the Ministry of Finance from March 1998 until July
1999 and as Chairman of the Board of Euro-Trade Bank from March 2000 until April
2001. Dr. Zilberfarb has served on various government committees since 1982,
including most recently, as a member of the committee to privatize El Al
Airlines, and as a member of the U.S. Israel Bi-national Science Foundation.
From January 1989 until February 1998, Dr. Zilberfarb served as the Chairman of
the Investment Committee of Bank Leumi Provident Funds, a mutual fund located in
Tel Aviv, Israel and as a consultant to several other financial institutions and
several government and regulatory authorities including the Israel Securities
Authority and the Bank of Israel. Presently, Dr. Zilberfarb serves as Chairman
of the Board of Directors of Karnit Insurance Co., as well as on the Board of
Directors of Partner Communications. Dr. Zilberfarb has earned a Ph.D in
Economics from the University of Pennsylvania and both an M.A. and a B. A. in
Economics from Bar-Ilan University.
Currently Serving External Director
George M. Lieberman has served as a Director of Fundtech since 1998.
He is an E-Commerce innovator. Since July, 2000, Mr. Lieberman has served as the
Chief Technology Officer of Verus International Group Limited, a global
investment company located in New York, New York. Prior to joining Verus
International, during 1999 and 2000, Mr. Lieberman served as Chief Information
Officer of WIT Capital Group, a pioneer Internet investment firm located in New
York, New York. Prior to joining WIT Capital, Mr. Lieberman was employed by
Merrill Lynch & Co., one the world's leading financial institutions, from April
1991 through the end of 1999, most recently serving as First Vice President of
Technology Strategy and Planning and as a member of the Merrill Lynch Technology
Advisory Board. Mr. Lieberman has more than 30 years of information technology
management and development experience across a broad spectrum of industries. He
holds two computer related patents. Mr. Lieberman was also responsible for the
development of major systems projects at many other financial industry companies
including Citibank and ADP. Mr. Lieberman holds advanced degrees in Industrial
Engineering and Operations Research from New York University. Mr. Lieberman is
the Chairman of the Corporate Advisory Board of The Institute for Technology and
Enterprise part of the Polytechnic University of New York.
5
Companies Law
The Companies Law, 5759-1999 became effective on February 1, 2000.
Under the Companies Law, companies incorporated under the laws of Israel whose
shares have been offered to the public in or outside of Israel are required to
appoint at least two independent, or "external" directors. A person may not be
appointed as an external director if the person or the person's relative,
partner, employer or any entity under such person's control, has, as of the date
of the person's election as an external director, or had, during the two years
preceding such election, any affiliation with the company, any person or entity
controlling the company or any entity controlled by the company or by this
controlling entity. The term "affiliation" includes:
o an employment relationship;
o business or professional relationship maintained on a regular basis;
o control; and
o service as an office holder.
A person may not serve as an external director if the person's other
duties or responsibilities create, or may create, a conflict of interest with
the person's responsibilities as an external director or may adversely impact
such person's ability to serve as an external director.
Under the Companies Law, each committee which is authorized to
exercise one of the functions of the Board of Directors is required to include
at least one external director. The term of an external director is three years
and may be extended by the shareholders for an additional three year term. Until
the lapse of two years from termination of service as director, a company may
not engage an external director to serve as an office holder and cannot employ
or receive services from that person, either directly or indirectly, including
through a corporation controlled by that person. The external directors must be
elected by the majority of the shareholders in a general meeting. Such majority
must either include at least one-third (1/3) of the shares of non-controlling
shareholders voted on the matter, or the total shares of non-controlling
shareholders voting against the election may not represent more than one percent
(1%) of the voting rights in the company.
Jay B. Morrison and George M. Lieberman, currently serving as
directors of the Company were elected as and currently qualify to serve as
external directors under the requirements of the Companies Law. Dr. Zilberfarb,
who has been nominated to replace Dr. Morrison as an external director, also
meets such requirements.
Audit Committee; Internal Auditor
Pursuant to the Companies Law, the Board of Directors of a public
company must appoint an Audit Committee as well as an internal auditor that meet
the following requirements. The Audit Committee must be comprised of at least
three directors, including all of the external directors. The Audit Committee
may not include the chairman of the Board of Directors, any director employed by
the Company or providing services to the Company on a regular basis or a
controlling shareholder or his relative. The role of the Audit Committee is to
examine problems in the management of the Company, in consultation with the
internal auditor and the Company's auditor, and suggest an appropriate course of
action. In addition, the approval of the Audit Committee is required in order to
take certain actions and to enter into transactions with office holders and
interested parties. The role of the internal auditor is to examine, among other
things, whether the actions of the Company comply with the law and follow
orderly business procedures. The internal auditor may be an employee of the
Company but may not be an interested party, an office holder or a relative of an
interested party or office holder, and may not be a member of the auditors of
the Company or such auditor's representative.
Fiduciary Duties of Office Holders
The Companies Law codifies the fiduciary duties that "office holder"
including directors and executive officers, owe to a company. An office holder's
fiduciary duties consist of a duty of care and a duty of loyalty. The duty of
care requires an office holder to act with the same level of skill with which a
reasonable office holder in the same position would act under the same
circumstances. This includes a duty to use reasonable means to obtain
information on the advisability of a given action brought for such office
6
holder's approval or performed by him by virtue of his position, and all other
significant information pertaining to such action. The duty of loyalty requires
an office holder to act in good faith and for the company's benefit, and
includes avoiding any conflict of interest between the office holder's position
in the company and any other position held by him or his personal affairs,
avoiding any competition with the company, avoiding exploiting any business
opportunity of the company in order to receive personal advantage for himself or
others, and revealing to the company any information or documents relating to
the company's affairs which the office holder has received due to his position
as an office holder. Each person listed in the nominees table, upon election,
will be an officer holder. See "Election of Directors." Under the Companies Law,
all arrangements as to compensation of office holders who are not directors
require approval of the Board of Directors, in certain cases with the prior
approval of the Audit Committee, and, with respect to indemnification and
insurance of these office holders, also require Audit Committee approval.
Arrangements regarding the compensation of directors, regardless of whether to
be paid in such director's position as a director or employee of the Company,
require the approval of the Audit Committee, Board of Directors and
shareholders.
Approval of Transactions Under the Companies Law
The Companies Law requires that an office holder of a company
promptly disclose any personal interest that he or she may have and all related
material information known to him or her in connection with any existing
proposed transaction by the company. If the transaction is an extraordinary
transaction as defined under the Companies Law, the office holder must also
disclose any personal interest held by the office holder's spouse, siblings,
parents, grandparents, descendants, spouse's descendants and the spouses of any
of the foregoing. In addition, the office holder must also disclose any interest
held by any corporation in which the office holder is a five percent (5%) or
greater shareholder, director or general manager or in which he or she has the
right to appoint at least one director or the general manager. An extraordinary
transaction is defined as a transaction which is either (i) not in the ordinary
course of business, or (ii) not on market terms, or (iii) likely to have a
material impact on the company's profitability, assets or liabilities.
In the case of a transaction of a company with an office holder,
which is not an extraordinary transaction, after the office holder complies with
the above disclosure requirement only approval of the Board of Directors is
required unless the company's articles of association provide otherwise. Such
transaction must not be adverse to the company's interest. Furthermore, if the
transaction is an extraordinary transaction, then, in addition to any approval
stipulated by the articles of association, it also must be approved by the
company's Audit Committee and then by the Board of Directors, and, under certain
circumstances, by the shareholders of the company. In most cases an office
holder who has a personal interest in a matter which is considered at a meeting
of the Board of Directors or the Audit Committee may not be present at the
meeting or vote on this matter.
The Companies Law applies the same disclosure requirements to a
controlling shareholder as it does to an office holder of a public company. A
controlling shareholder is a shareholder who has the ability to direct the
operation of the company (except if such ability derives only from his position
as director or office holder in the company), including a shareholder that holds
25% or more of the voting rights if no other shareholder owns more than 50% of
the voting rights in the company. Extraordinary transactions with a controlling
shareholder or in which a controlling shareholder has a personal interest, and
the terms of compensation (whether as an office holder or an employee) of a
controlling shareholder who is an office holder, require the approval of the
Audit Committee, the Board of Directors and the shareholders of the company. The
shareholder approval must include at least one-third of the shareholders who
have no personal interest in the transaction and are present (in person or by
proxy) at the meeting or, alternatively, the total shareholdings of those who
have no personal interest in the transaction who vote against the transaction
must not represent more than one percent of the voting rights in the company.
In addition, a private placement of securities that will increase
the relative holdings of a shareholder that holds five percent (5%) or more of a
company's outstanding share capital or voting rights (assuming the exercise or
conversion of all securities held by such person that are exercisable for or
convertible into shares) or that will cause any person to become, as a result of
the issuance, a holder of more than five percent (5%) of the company's
outstanding share capital or voting rights, requires approval by the Board of
Directors and the shareholders of such company.
7
The Articles of Association of Fundtech provide that the Board of
Directors may delegate all of its powers to such committees of the Board of
Directors as it deems appropriate, subject to the provisions of the applicable
law.
For information concerning the direct and indirect personal
interests of certain Office Holders and principal shareholders of Fundtech in
certain transactions with Fundtech, see "Certain Relationships and Related Party
Transactions."
Insurance of Office Holders for a Breach of Their Duty of Care;
Indemnification of Office Holders; Exemption of Office Holders from Their
Duty of Care
Sections 260 and 261 of the Companies Law permit a company to
perform both of the following actions, provided that such actions are authorized
by the company's articles of association: (i) insure an office holder for the
breach of his duty of care or, to the extent he acted in good faith and had a
reasonable basis to believe that the act would not prejudice the company, for
the breach of his fiduciary duty as well as for monetary liabilities charged
against him as a result of an act or omission he committed in connection with
his serving as an officer or director of the company, and (ii) indemnify an
office holder for monetary liability incurred by him pursuant to a judgment,
including a settlement or arbitration decision approved by a court, as well as
for reasonable legal expenses incurred by him in an action brought against him
by or on behalf of the company or others, or as a result of a criminal charge of
which he was acquitted, or as a result of a criminal procedure in which he was
convicted of a felony which does not require proof of criminal intent provided
that any such liability or expense incurred by such office holder is due to an
action performed by such office holder by virtue of his position with the
company.
Under Section 260(B) of the Companies Law, a company is entitled to
undertake in advance to indemnify an office holder for the breach of his or her
duty of care, provided that the articles of association of the company permit
such indemnification in advance and further provided that such indemnification
shall be limited to the type of events that, in the discretion of the Board of
Directors of the Company, may be anticipated at such time of undertaking and
that such undertaking shall be limited to an amount which the Board of Directors
deems reasonable in light of the applicable circumstances. These are
specifically limited in their scope by Section 263 of the Companies Law, which
provides that a company may not indemnify an office holder nor enter into an
insurance contract which would provide coverage for any liability incurred as a
result of the following: (a) a breach by the office holder of his fiduciary duty
unless he acted in good faith and had a reasonable basis to believe that the act
would not prejudice the company; (b) a breach by the office holder of his duty
of care if such breach was done intentionally or recklessly; (c) any act or
omission done with the intent to derive an unlawful personal benefit; or (d) any
fine levied against such office holder. In addition, under Section 259 of the
Companies Law a company may exempt an office holder from his duty of care to the
company, in whole or in part and subject to the limitations of Section 263 of
the Companies Law described above, provided that such actions are authorized by
the company's articles of association.
The Articles of Association of Fundtech provide that Fundtech may
enter into a contract for the insurance of the liability, in whole or in part,
of any of its office holders (as defined below) with respect to: (i) a breach of
his duty of care to Fundtech or to another person; (ii) a breach of his
fiduciary duty to Fundtech, provided that the office holder acted in good faith
and had a reasonable basis to assume that his actions would not adversely affect
the best interests of Fundtech; or (iii) a financial liability imposed upon him
in favor of another person in respect of an act performed by him in his capacity
as an office holder of Fundtech. In addition, Fundtech may indemnify an office
holder against: (i) a financial liability imposed on him in favor of another
person by any judgment, including a compromise judgment or an arbitrator's award
approved by a court in respect of an act performed in his capacity as an office
holder of Fundtech, and (ii) reasonable litigation expenses, including
attorneys' fees, incurred by such office holder or charged to him by a court in
proceedings instituted against him by Fundtech or on its behalf or by another
person, or in a criminal charge from which he was acquitted, all in respect of
an act performed in his capacity as an office holder of Fundtech.
Committees of the Board of Directors
The Board of Directors of the Company has an Audit and Control
Committee (the "Audit Committee") and a Compensation Committee.
8
Audit Committee
The Audit Committee, which in 2000 consisted of Dr. Jay B. Morrison,
Mr. George M. Lieberman and Ms. Rina Shainski, exercises the powers of the Board
of Directors with respect to the accounting, reporting and financial control
practices of the Company. The Audit Committee met five (5) times during 2000. In
the event of his election as an external director of the Company, the Board of
Directors will appoint Mr. Ben-Zion Zilberfarb to replace Dr. Morrison as a
member of the Audit Committee.
Compensation Committee
The Compensation Committee, which in 2000 consisted of Ms. Rina
Shainski, Mr. Achi Racov and Dr. Jay B. Morrison, administers the Company's
stock option plans and the Company's overall compensation practices. The
Compensation Committee met twice during 2000. Upon Dr. Morrison's resignation,
the Board of Directors will appoint one of the Company's external directors,
either Mr. Zilberfarb (if elected) or Mr. Lieberman, to replace him as a member
of the Compensation Committee.
Directors' Compensation
Pursuant to the Company's Directors' Option Plan, in 2000 the
Company granted options to purchase up to 6,000 Ordinary Shares to each member
of the Board of Directors. For additional information regarding stock options to
purchase Ordinary Shares granted to Reuven Ben-Menachem as a director or as an
employee. See "Compensation Committee Report - CEO."
Fundtech does not otherwise compensate directors for attending
meetings of the Board of Directors or committee meetings of the Board of
Directors. However, Fundtech does reimburse directors for their reasonable
travel expenses incurred in connection with attending these meetings.
Directors' Attendance
In addition to the above mentioned committee meetings, the Board of
Directors held meetings or took equivalent actions six (6) times during 2000.
None of the incumbent directors attended (including through the means of the
appointment of an alternate director or through a proxy, as permitted under
Fundtech's Articles of Association) fewer than 75% of the aggregate of (i) the
total number of meetings of the Board of Directors (held during the period that
such director was in office) and (ii) the total number of meetings of all
committees of the Board of which such director was a member (held during the
period that such director was in office). See "Committees of the Board of
Directors."
9
MANAGEMENT
The following individuals are the executive officers and key management of
Fundtech:
Name Age Title
---- --- -----
Reuven Ben-Menachem 41 Chief Executive Officer and Chairman
Yoram Bibring 44 Chief Financial Officer
Gil Gadot 40 Executive Vice President of
Technology, General Manager of Israel
Operations
Michael S. Hyman 43 Vice President, General Counsel and
Secretary
Joseph P. Mazzetti 61 President of Global Products and
Operations
Michael Sgroe 44 President of U.S. Products and
Operations
George M. Stetter 56 Executive Vice President and Chief
Marketing Officer
For a discussion of the business experience of Mr. Reuven
Ben-Menachem, see "Board of Directors."
Yoram Bibring has served as Chief Financial Officer since joining
Fundtech in September 2001. Prior to joining Fundtech, Mr. Bibring served from
April 1999 until May 2001 as Chief Financial Officer of ViryaNet, a provider of
software solutions to the workforce management market located in Southborough,
Massachusetts, where he also served as a Financial Consultant for ViryaNet and
Skila Inc., located in Mahwah, New Jersey from November 1998 until April 1999.
Prior to joining ViryaNet, Mr. Bibring served from February 1998 until November
1998 as Chief Financial Officer of Americash, Inc., a leading operator of e-cash
platforms located in New York, New York, which was sold to American Express.
Prior to joining Americash, from December 1996 until January 1998, Mr. Bibring
was employed by Geotek Communications, a wireless communications service
provider located in Montville, New Jersey, where he served initially as Chief
Financial Officer and then as the President of it's International Division. Mr.
Bibring's extensive financial career also includes several years in public
accounting in Israel and the United States. He holds a B.A. in Accounting and
Economics from Tel-Aviv University and is a certified public accountant in both
Israel and the United States.
Gil Gadot has served as Executive Vice President of Technology and
General Manager of Israeli Operations of Fundtech since September 1998. Mr.
Gadot was the Senior Vice President of Technology and U.S. Operations from 1995
until September 1998, and prior to that served as Vice President of Research and
Development of the Company since it commenced operations in 1993. From 1987 to
1993, Mr. Gadot was a senior project manager of DSSI, a leading systems and
software supplier located in Mahwah, New Jersey. Prior to joining DSSI, Mr.
Gadot served as a senior programmer and analyst holding a rank of Captain in the
Israeli Army Computer Center. Mr. Gadot has more than 18 years of software
development experience, particularly in advanced graphical user interface,
operating and real-time systems. He holds a B.Sc. in Computer Science and
Economics from Bar-Ilan University in Israel.
Michael S. Hyman has served as a Vice President, General Counsel and
Secretary of Fundtech since joining the Company in September 1998. Prior to
joining Fundtech, during 1998, Mr. Hyman worked as Special Counsel to Wilson
Sonsini Goodrich and Rosati located in Palo Alto, California, one of the leading
technology law firms in the U.S. Prior to joining Wilson Sonsini, during 1996
and 1997, Mr. Hyman worked as a local counsel and foreign expert for the Israeli
law firm of Leshem, Brandwein & Associates. Mr. Hyman's extensive legal career
also includes several years of consulting for high tech companies in the U.S.,
Europe and Israel. Mr. Hyman is a member of the bars of the State of Illinois
and the State of Israel. Mr. Hyman holds a J.D. from Boston University Law
School and a B.A. in History from the Honors Program at the University of
Michigan.
10
Joseph P. Mazzetti has served as President Global Products and
Operations since January, 2001 and prior to that as Executive Vice President,
Sales and Marketing since joining Fundtech in November 1994. Prior to joining
Fundtech, Mr. Mazzetti was employed from 1992 to 1994 as an Executive Vice
President at PRT Corp., a software consulting company located in New York City.
From 1984 to 1992, Mr. Mazzetti was employed at Logica Data Architects, a global
consulting and systems integration firm located in Waltham, Massachusetts. He
held the position of Executive Vice President of the Financial Products Group
with responsibility for the funds transfer, message switching and
asset/liability product lines. Mr. Mazzetti has more than 30 years of experience
in information technology in the public and private sectors with concentration
in the banking and financial institutions market. Mr. Mazzetti holds an M.Sc in
Industrial Engineering from Stevens Institute of Technology and a B.S. in
Physics from Georgetown University.
Michael Sgroe has served as President of U.S. Products and
Operations since January 2001 and prior to that as Senior Vice President and
General Manager of the U.S. Payments Division since joining Fundtech in May
2000. Prior to joining Fundtech, Mr. Sgroe spent 16 years at Chase Manhattan
Bank, a leading financial institution headquartered in New York City, where he
served as Vice President with responsibility for developing and deploying
high-performance solutions for the bank's Payments and Cash Management
businesses. During this period, Mr. Sgroe also served as Vice President of
Technology and Operations for the e-Procurement solutions provider Metiom, an
e-commerce start-up with an equity ownership position held by Chase Manhattan
Bank. Mr. Sgroe began his career in 1979 at Morgan Guaranty Trust, where he held
assignments both in New York and in London. Mr. Sgroe holds a B.A. in
Anthropology from the City University of New York.
George M. Stetter, has served as the Executive Vice President of
Corporate Marketing and Strategic Planning since joining Fundtech in June 2001.
Prior to joining Fundtech, Mr. Stetter was employed by Merrill Lynch (NYC),
where he served as First Vice President responsible for global cash management
and bank relations from June 1987 until April 2001. In this position he was
responsible for commercial banking relationships and establishment of bank
credit facilities. He was instrumental in defining and establishing the
policies, procedures and systems that Merrill Lynch implemented to control
global cash movements and banking activities. Mr. Stetter is the chairman of the
Association for Financial Professionals (AFP), formerly the Treasury Management
Association, and also serves on AFP's Payment Advisory Group. He has been a
member of cash management advisory boards of Citibank, Chase, Bank of America
and Mellon Bank, and is a featured speaker at various industry trade shows
including SWIFT's SIBOS conference and AFP's Annual Conference. Mr. Stetter
holds a B.A. in Finance from the University of Virginia.
11
Security Ownership of Certain Beneficial
Owners and Management
The following table sets forth certain information as of December
10, 2001 (except as otherwise specified in the footnotes) about beneficial
ownership of Ordinary Shares in the Company by (i) each person who is the
beneficial owner of more than five percent (5%) of the outstanding Ordinary
Shares, (ii) all directors and nominees of the Company, (iii) the Chief
Executive Officer and the four other highest-paid executive officers employed by
the Company as of December 31, 2000 (the "Named Officers"), and (iv) all
directors and executive officers as a group, based in each case on information
furnished to the Company. The address of each person who is an officer or
director of the Company is c/o Fundtech Ltd., 12 Ha'hilazon Street, Ramat-Gan,
Israel.
Ordinary Shares
------------------------------
Amount and
Nature of Percentage
Beneficial Beneficially
Name and address of Beneficial Owner Ownership Owned
- ------------------------------------ ---------- ------------
Principal Shareholders (holding more than 5%)
- ---------------------------------------------
Aura Investments Ltd.(1)............... 1,055,000 7.40
Clal Industries and Investments Ltd.(2) 4,068,497 28.53
Current Directors and Nominees
- ------------------------------
Reuven Ben-Menachem(3)................. 413,400 2.89
Yeoshua Agassi(4) ..................... 4,068,497 28.53
George Lieberman(5).................... 16,500 *
Jay B. Morrison(6)..................... 18,749 *
Rina Shainski(7) ...................... 15,000 *
Meir Shannie(8)........................ 4,068,497 28.53
Gil Weiser(9).......................... 6,000 *
Ben-Zion Zilberfarb ................... 0 *
Named Officers
- --------------
Michael Carus(10)...................... 16,500 *
Joseph P. Mazzetti(11)................. 51,250 *
J. Edward Orr III(12).................. 22,000 *
Mordecai Porath(13) ................... 25,450 *
All Directors and Executive Officers 4,867,489 33.46
as a group (17 persons)
- --------------------------------------------------------------------------------
*Represents less than (1%) of the outstanding Ordinary Shares.
(1) Consists of 1,055,000 Ordinary Shares held by Aura Investments Ltd.
("Aura"). The address of Aura is 16B Szold Street, Ramat-Hasharon 47225,
Israel.
(2) Consists of 4,068,497 Ordinary Shares held by CII. The address of CII is 3
Azriel Center, Triangle Building, Tel Aviv 67023, Israel.
(3) Includes options to purchase 18,000 Ordinary Shares granted pursuant to
the Directors' Option Plan. Also includes options to purchase 36,250
Ordinary Shares granted pursuant to the other Company Option Plans.
12
(4) Includes 4,068,497 Ordinary Shares owned by CII, of which Mr. Agassi is
Vice President of Business Development. Mr. Agassi disclaims beneficial
ownership of the Ordinary Shares held by CII.
(5) Consists of options to purchase 16,500 Ordinary Shares granted pursuant to
the Directors' Option Plan.
(6) Includes 607 Ordinary Shares held by Jay B. Morrison and 142 Ordinary
Shares held by Newbury Investors Inc. of which Dr. Morrison is a 50%
shareholder. Dr. Morrison disclaims beneficial ownership of such Ordinary
Shares held by Newbury Investors Inc. except to the extent of his
proportionate pecuniary interest therein. Also includes options to
purchase 18,000 Ordinary Shares granted pursuant to the Directors' Option
Plan.
(7) Consists of options to purchase 15,000 Ordinary Shares granted pursuant to
the Directors' Option Plan.
(8) Includes 4,068,497 Ordinary Shares owned by CII, of which Mr. Shannie is
President and CEO. Mr. Shannie disclaims beneficial ownership of the
Ordinary Shares held by CII.
(9) Consists of options to purchase 6,000 Ordinary Shares granted pursuant to
the Directors' Option Plan.
(10) Consist of options to purchase 16,500 Ordinary Shares granted pursuant to
the Company Option Plans.
(11) Includes options to purchase 39,250 Ordinary Shares granted pursuant to
the Company Option Plans.
(12) Consist of options to purchase 22,000 Ordinary Shares granted pursuant to
the Company Option Plans.
(13) Includes 400 Ordinary Shares held by Mr. Porath's spouse. Mr. Porath
disclaims beneficial ownership of such Ordinary Shares held by his spouse
except to the extent of his proportionate pecuniary interest therein. Also
includes options to purchase 25,050 Ordinary Shares granted pursuant to
the Company Option Plans.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
During 2000, Mr. Reuven Ben-Menachem who is the Chief Executive
Officer and Chairman of the Board of Fundtech Ltd. failed to timely file with
the Securities and Exchange Commission (the "SEC") three Forms 4 relating to
three transactions: Mr. Michael Carus who was an Executive Vice President, Chief
Financial Officer, and Chief Operating Officer of Fundtech Ltd. failed to timely
file with the SEC one Form 4 relating to one transaction: Mr. Joseph Mazzetti
who is the President of Global Products and Operations of Fundtech Ltd. failed
to timely file with the SEC one Form 4 relating to one transaction: Mr. Gil
Gadot who is an Executive Vice President, of Technology and General Manager of
Israel Operations of Fundtech Ltd. failed to timely file with the SEC two Forms
4 for three transactions: Mr. J. Edmund Orr III who was an Executive Vice
President and General Manager of Electronic Banking of Fundtech Ltd. failed to
timely file with the SEC one Form 3, one Form 4 relating to one transaction, and
one Form 5 relating to two transactions: Mr. Mordecai Porath who is a Senior
Vice President, Global Strategic Solutions of Fundtech Ltd. failed to timely
file with the SEC one Form 3: Mr. Michael Sgroe who is the President of U.S.
Products and Operations of Fundtech Ltd. failed to timely file with the SEC one
Form 3: Mr. Rimon Ben-Shaoul who was a director of Fundtech Ltd. failed to
timely file with the SEC one Form 4 for one transaction: Mr. George Lieberman
who is a director of Fundtech Ltd. failed to timely file with the SEC one Form 4
relating to one transaction and one Form 5 relating to one transaction; Dr. Jay
B. Morrison who is a director of Fundtech Ltd. failed to timely file with the
SEC one Form 4 relating to one transaction and one Form 5 relating to two
transactions: Mr. Achi Racov who was a director of Fundtech Ltd. failed to
timely file with the SEC one Form 4 relating to one transaction: Ms. Rina
Shainski who is a director of Fundtech Ltd. failed to timely file with the SEC
one Form 4 relating to one transaction: Mr. Gil Weiser who is a director of
Fundtech Ltd. failed to timely file with the SEC one Form 3 and one Form 4
relating to one transaction.
13
EXECUTIVE COMPENSATION
The following table sets forth information concerning total
compensation earned by or paid to the Named Officers during the fiscal years
indicated for services rendered to the Company and its subsidiary.
Summary Compensation Table
Long-term
Compensation
Awards
------------
Securities
Annual Compensation Underlying All Other
Name & Principal Position Year Salary Bonus Options Compensation(1)
- ------------------------- ---- ------ ----- ------- ---------------
Reuven Ben-Menachem 2000 $225,000 -- 46,000(2) 1,475
Chief Executive 1999 200,000 65,000 6,000(3) 2,447
Officer, President 1998 165,417 140,000 21,000 2,954
and Chairman
Michael Carus 2000 200,000 -- 35,000 3,127
Executive Vice 1999 160,000 43,000 -- 2,447
President, Chief 1998 145,833 40,000 15,000 2,954
Operating Officer and
Chief Financial Officer
Joseph P. Mazzetti 2000 200,000 -- 35,000 63
Executive Vice 1999 160,000 18,000 -- 2,447
President - Sales 1998 146,875 25,000 15,000 2,954
and Marketing
J. Edmund Orr, III. (5) 2000 146,400 75,000 -- 1,560
Senior Vice President 1999 66,875 25,000 50,000 1,224
and General 1998 -- -- -- --
Manager - Electronic
Banking Division Strategic
Solutions
Mordecai Porath 2000 189,584 40,000 25,000 1,267
Senior Vice President, 1999 140,000 -- -- 2,447
Global Strategic Solutions 1998 113,124 25,000 4,000 2,954
- ----------------
(1) Represents relocation, housing and health insurance premiums.
(2) Includes 6,000 options granted pursuant to the Director's Option Plan and
40,000 options granted pursuant to the Company Option Plans.
(3) Includes 6,000 options granted pursuant to the Director's Option Plan.
(4) Includes 6,000 options granted pursuant to the Director's Option Plan and
15,000 options granted pursuant to the Company Option Plans.
(5) Joined Fundtech Corporation in July 1999.
No other annual compensation, stock appreciation rights, long-term restricted
stock awards or long-term incentive plan payouts were awarded to, earned by, or
paid to the Named Officers during any of Fundtech's last three fiscal years.
14
Option/SAR Grants in Last Fiscal Year
Stock options exercisable for Ordinary Shares are granted to certain
employees of the Company pursuant to the Company's share option plans in order
to secure and retain the services of highly qualified persons by rewarding key
employees for their contribution toward increasing the value of the Company's
Ordinary Shares. The following table provides information on options granted to
the Named Officers during the last fiscal year pursuant to the Company's option
plans.
The table also shows, among other data, hypothetical potential gains
from options granted in fiscal 2000. These hypothetical gains are based entirely
on assumed annual growth rates of 5% and 10% in the value of the price of
Ordinary Share over the life of the options granted in Fiscal 2000. The assumed
rates of growth were selected by the SEC for illustrative purposes only, and are
not intended to predict future stock prices, which will depend upon market
conditions and the Company's future performance and prospects.
Individual Grants
-----------------------------------------------------
% of Total Potential Realizable
Number of Options/SARs Value at Assumed Annual
Securities Granted To Rates of Stock Price
Underlying Employees Exercise Appreciation for Option Term
Options/SAR In Fiscal Price Per Expiration ----------------------------
Name of Executive Granted Year(3) Share($/Sh)(4) Date 5% 10%
- ----------------- ----------- ---------- -------------- ---------- --- ---
Reuven Ben-Menachem 40,000(2) 4.9% $ 15.25 4/16/05 $168,532 $372,411
6,000(1) 0.7% $ 19.50 11/29/05 $32,325 $71,430
Michael Carus 35,000(2) 4.3% $ 19.50 4/16/05 $188,562 $416,673
Joseph Mazzetti 35,000(2) 4.3% $ 19.50 4/16/05 $188,562 $416,673
Edward Orr III -- -- -- -- -- --
Mordecai Porath 25,000(2) 3.1% $ 19.50 4/16/05 $134,687 $297,624
- --------------------
(1) Each option represents the right to purchase one Ordinary Share. These
options were granted pursuant to Fundtech's Directors' Option Plan on
November 30, 2000. The options vest at a rate of 25% every three months.
(2) Each option represents the right to purchase one Ordinary Share. These
options were granted pursuant to the 1997 Israeli Stock Option Plan on
April 17, 2000. The options vest at a rate of 12.5% every six months.
(3) In the year ended December 31, 2000, the Company granted options to
employees and directors to purchase an aggregate of 818,000 Ordinary
Shares, including options to purchase an aggregate of 42,000 Ordinary
Shares granted to Fundtech's directors.
(4) The exercise price on the date of grant was equal to 100% of the fair
market value of the Ordinary Shares on the date of grant.
15
Fiscal Year-End Option Holdings
The following table summarizes for each of the Named Officers option
exercises during fiscal 2000, including the aggregate value of gains on the date
of exercise, the total number of unexercised options for Ordinary Shares, if
any, held at December 31, 2000 and the aggregate dollar value of unexercised
in-the-money options for Ordinary Shares, if any, held at December 31, 2000.
Value of unexercised in-the-money options at fiscal year-end is the difference
between the exercise or base price of such options and the fair market value of
the underlying Ordinary Shares on December 31, 2000, which was $17.875 per
share. These values have not been, and may never be, realized, as these options
have not been, and may never be, exercised. Actual gains, if any, upon exercise
will depend on the value of Ordinary Shares on the date of any exercise of
options.
Aggregated Option/SAR Exercises in the Last Fiscal Year and
FY-End Option/SAR Values
Value of Unexercised
(at year end)
Ordinary In-the Money Options
Shares Options at Fiscal Year-End (#) at FY-End ($)
Acquired Value ------------------------------ ---------------------------
Name On Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- ------------ ----------- ------------- ----------- -------------
Reuven Ben-Menachem 2,250(1) $ 40,584 13,500 13,500 $ 53,692 $ 62,692
Michael Carus -- -- 30,000 22,500 $374,288 $265,163
Joseph Mazzetti -- -- 27,375 10,125 $348,094 $ 85,106
J. Edmund Orr, III 3,000 $ 41,250 9,500 37,500 $ 43,985 $173,625
Mordecai Porath 6,500 $130,581 5,925 7,625 $ 82,061 $ 94,354
- ---------------
(1) Includes 2,250 options exercised by his wife.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee for the fiscal year ended
December 31, 2000 were Ms. Rina Shainski, Mr. Achi Racov and Dr. Jay B.
Morrison. No member of the Compensation Committee is an officer or employee of
Fundtech. The responsibilities of the Compensation Committee include
administering Fundtech's stock option plans and approving the base compensation
of Mr. Reuven Ben-Menachem and the executive officers of the Company.
Stock Option Plans
Fundtech has established five plans for granting options to
employees of the Company and its subsidiaries and one plan for granting options
to the directors of the Company: The Fundtech Ltd. 1996 Israeli Stock Option
Plan for the Employees of Fundtech Ltd. (the "1996 Israel Plan"); the Fundtech
Ltd. 1996 Stock Option Plan for Fundtech Corporation (the "1996 U.S. Plan"); the
Fundtech Ltd. 1997 Stock Option Plan for Fundtech Corporation (the "1997 U.S.
Plan"); the Fundtech Ltd. 1997 Israeli Share Option Plan (the "1997 Israel
Plan"); the Fundtech Ltd. 1999 Employee Option Plan (the "1999 Option Plan");
and the Fundtech Ltd. Directors' Option Plan (the "Directors' Option Plan")
(collectively the "Company Option Plans"). Pursuant to resolutions of the
Shareholders adopted at the 1999 Annual Meeting held on September 7, 1999 and at
the 2000 Annual Meeting held on November 30, 2000 as well as the underlying
resolutions of the Board of Directors (the "Corporate Resolutions"), a total of
2,818,000 options have been allocated for grant to employees of Fundtech Ltd.
and Fundtech Corporation and directors of Fundtech Ltd. pursuant to the Company
Option Plans and an equal number of Ordinary Shares have been reserved for
issuance upon exercise of such options. As of December 10, 2001, 1,424,687
16
options were outstanding, 430,698 options have been exercised, 31,752 options
have expired due to the lapse of the term of the relevant plans and 930,863
options are available to be issued. The following options have been reserved and
granted pursuant to the Company Option Plans as set forth below.
1996 Stock Option Plans
The 1996 Israel Plan was adopted in May 1996 and provides for the
granting of options under Section 102 of the Israel Income Tax Ordinance
("Section 102"). Pursuant to Section 102 and the rules promulgated thereunder
(including the requirement that the options and/or the resulting shares be
deposited with a trustee for at least two years), the tax on the benefit arising
to the employee from the grant and exercise of options as well as from the
allotment of Ordinary Shares under these options is deferred until the transfer
of the options and/or Ordinary Shares to the employee's name or upon sale of
those options and/or Ordinary Shares. Fundtech will be allowed to claim as an
expense for tax purposes the amounts credited to the employees as a benefit upon
sale of the shares allotted under the plan at a price exceeding the exercise
price when the related capital gains tax is payable by the employee. The options
granted under the 1996 Israel Plan vest over a period of four years and expire
four years from the date of grant. Pursuant to the Corporate Resolutions,
120,753 Ordinary Shares were reserved and allocated to the 1996 Israel Plan. Of
the 120,753 options available for grant under the 1996 Israel Plan, as of
December 10, 2001, no options were outstanding, 112,504 options have been
exercised, and 8,249 options have expired due to the lapse of the term of the
1996 Israel Plan and no options remain available to be issued.
The 1996 U.S. Plan was adopted in October 1996. The options granted
under the 1996 U.S. Plan vest over a period of four years and expire five years
from the date of grant. Pursuant to the Corporate Resolutions, 235,500 Ordinary
Shares were reserved and allocated to the 1996 U.S. Plan. Of the 235,500 options
available for grant under the 1996 U.S. Plan, as of December 10, 2001, 63,426
options were outstanding, 148,571 options have been exercised, 23,503 options
have expired due to the lapse of the term of 1996 U.S. Plan and no options
remain available to be issued.
1997 Stock Option Plans
The 1997 U.S. Plan was adopted in September 1997. The options
granted under the 1997 U.S. Plan vest over a period of four years and expire
five years from the date of grant. Pursuant to the Corporate Resolutions,
626,747 Ordinary Shares were reserved and allocated to the 1997 U.S. Plan. Of
the 626,747 options available for grant under the 1997 U.S. Plan, as of December
10, 2001, 365,686 options were outstanding, 126,625 options have been exercised,
and 134,436 options remain available to be issued.
The 1997 Israel Plan was adopted in December 1997. The options
granted under the 1997 Israel Plan vest over a period of four years and expire
five years from the date of grant. Pursuant to the Corporate Resolutions,
750,000 Ordinary Shares were reserved and allocated to the 1997 Israel Plan. Of
the 750,000 options available for grant under the 1997 Israel Plan, as of
December 10, 2001, 498,564 options were outstanding, 32,579 options have been
exercised, and 218,857 options remain available to be issued.
1999 Stock Option Plan
The 1999 Option Plan was adopted in September 1999. The options
granted under the 1999 Option Plan vest over a period of four years and expire
five years from the date of grant. Pursuant to the Corporate Resolutions,
948,000 Ordinary Shares were reserved and allocated to the 1999 Option Plan. Of
the 948,000 options available for grant under the 1999 Option Plan, as of
December 10, 2001, 378,511 options were outstanding, 10,419 options have been
exercised, and 559,070 options remain available to be issued.
Directors' Option Plan
The Directors' Option Plan was adopted in May 1998 pursuant to which
42,000 options were authorized to be granted. At the 1998 Annual Meeting of the
Shareholders, held in August 1998, 42,000 options were granted pursuant to the
Directors' Option Plan following the election of that year's Board of Directors
and an equivalent number of Ordinary Shares were reserved for issuance upon
exercise such options. At the 1999 Annual Meeting of the Shareholder's held on
September 7, 1999, the
17
Shareholders ratified and approve an increase of 68,000 in the number of options
that may be granted pursuant to the Directors' Option Plan of the Company and an
increase of 68,000 in the number of Ordinary Shares reserved for issuance upon
exercise of the options granted pursuant to the such Directors' Option Plan.
Following the election of that year's Board of Directors, the Shareholders
granted an additional 49,500 options. At the 2000 Annual Meeting of the
Shareholder's held on November 30, 2000, the Shareholders ratified and approve
an increase of 27,000 in the number of options that may be granted pursuant to
the Directors' Option Plan of the Company and an increase of 27,000 in the
number of Ordinary Shares reserved for issuance upon exercise of the options
granted pursuant to the such Directors' Option Plan. Following the election of
that year's Board of Directors, the Shareholders granted an additional 42,000
options. These options vest over a period of one year and expire five years from
the date of grant. Of the 137,000 options available for grant under the
Directors' Option Plan, as of December 10, 2001, 118,500 options were
outstanding, no options have been exercised, and 18,500 options remain available
to be issued.
Employment Agreements, Termination Provisions and Change in Control
Arrangements
On November 25, 1997, Fundtech entered into an employment agreement
with Reuven Ben-Menachem engaging him as the Chief Executive Officer of Fundtech
and of Fundtech Corporation, its U.S. subsidiary. The initial term of Mr.
Ben-Menachem's employment commenced on January 1, 1998 and continued until
December 31, 1999, unless renewed. The Audit Committee, the Compensation
Committee and the Board of Directors renewed Mr. Ben-Menachem's agreement for an
additional year, through December 31, 2000, at an annual base salary of $225,000
and eligibility for bonuses based on Fundtech's achievement of certain
performance goals. The shareholders approved such employment terms in Fundtech's
previous annual meeting. The Audit Committee and the Board of Directors renewed
Mr. Ben-Menachem's agreement for three additional years, through December 31,
2003. and. the shareholders approved the term of such employment in Fundtech's
previous annual meeting. Compensation for the first year of the new term (i.e.
fiscal year 2001) through the next annual meeting was set at the same levels as
fiscal year 2000 and has been recommended to the shareholders for approval in
Proposal 6. In accordance with Mr. Ben-Menachem's employment agreement, Fundtech
may terminate Mr. Ben-Menachem employment without cause, in which case Mr.
Ben-Menachem would receive severance payment in the amount equal to his then
current base salary for a period of six (6) months, plus the pro-rata portion of
his bonus for such year. Mr. Ben-Menachem's base salary is reviewed annually and
any increases to his base salary require the approval of the Audit Committee,
the Board of Directors and the shareholders of Fundtech. Mr. Ben-Menachem's
employment agreement incorporates a non-competition and confidentiality
agreement entered into on February 2, 1995.
Fundtech does not currently have any written employment contracts in
effect with any of the Named Officers other than Reuven Ben-Menachem, its Chief
Executive Officer.
Compensation Committee Report
The Compensation Committee administers the Company Option Plans
subject to the necessary approvals, determines the base compensation and
bonus/incentive compensation of the Chief Executive Officer of the Company,
Reuven Ben-Menachem, and reviews the recommendations of Reuven Ben-Menachem and
approves the base compensation and bonus/incentive compensation of the other
executive officers of the Company. In anticipation of its April 2000 meeting,
the Compensation Committee commissioned a competitive compensation
analysis/report from Towers Perrin. The peer companies were selected based on
industry (software), market capitalization and projected growth patterns. The
Compensation Committee has set the executive officers' total compensation at the
current levels in an attempt to raise their compensation to the median group of
the peer companies.
General Compensation Policy
The Compensation Committee's fundamental compensation policy is to
make a substantial portion of executive officers' compensation contingent on
Fundtech's growth, financial performance and meeting certain specific targeted
events. Accordingly, in addition to base salary, we offer bonuses/incentive
compensation (which are tied to the Company's and the executive's performance
goals) and stock option awards. The Compensation Committee believes that
providing incentives to the executive
18
officers through both cash bonus and equity based incentives (stock options in
the Company) benefits shareholders by aligning the long-term interests of
shareholders and employees.
Each executive officer's compensation package consists of: (i)
salary, (ii) benefits, which include, inter alia, medical, dental, life
insurance and participation in a 401(k) plan and (iii) may include either or
both stock options under the relevant stock option plan of the Company and/or
its subsidiaries and/or eligibility for incentive compensation.
Factors
The principal factors considered in establishing the components of
each executive officer's compensation package for the 2001 fiscal year are
summarized in this report. The Compensation Committee may, in its discretion,
apply entirely different factors, particularly different measures of financial
performance, in setting executive officers' compensation for future fiscal
years. However, all compensation decisions will be designed to further the
general compensation policy indicated above and all compensation for directors
of the Company will be subject to the approval of the Audit Committee, the Board
of Directors and Shareholders of the Company.
Base Salary
The base salary for each executive officer is set on the basis of
personal performance, the salary levels in effect for comparable positions in
companies similarly situated with the Company and the financial performance of
the Company. In preparing the performance graph for this Proxy Statement, the
Company used Hambrecht & Quist Computer Software Index ("H & Q Index") as its
published line of business index. The compensation practices of most of the
companies in the H & Q Index were not reviewed by the Compensation Committee, as
such companies were not believed to compete with the Company for executive
talent. The Compensation Committee based its practices on the analysis/report
commissioned from Towers Perrin (the "T.P. Report").
Factors relating to individual performance that are assessed in
setting base compensation are based on particular duties, areas of
responsibility of the individual executive officer and internal consistency
within the Company's salary structure. Factors relating to our financial
performance that may be related to increasing or decreasing base salary include
revenues, profits and meeting strategic objectives for future growth. The
establishment of base compensation involves a subjective assessment and weighing
of the foregoing criteria and is not based on any specific formula.
Incentive Compensation
Assessment of any adjustment to bonuses earned is determined by the
Compensation Committee. Bonuses have only been paid on achieving performance
thresholds, based either on specific events or meeting revenue or profit targets
previously established by the Board. The corporate goals and threshold level may
differ from year to year, but are always aligned with the objective of improving
shareholder value. The bonus targets for fiscal year 2001 were based on the T.P.
Report.
Stock Options
Stock options are an essential element of the Company's executive
compensation package. The Compensation Committee believes that equity-based
compensation in the form of stock options aligns the interests of management
with those of the shareholders by focusing employees and management on
increasing stockholder value. The value of such equity-based compensation
derives solely from appreciation of the Ordinary Shares in the Company. In order
to promote longer term management focus and to provide incentive for continued
employment with the Company, stock option grants generally become exercisable
over a four year vesting schedule, with the exercise price being equal to the
fair market value of the Ordinary Shares of the Company on the date the options
are granted.
The size of the option grant made to each executive officer is based
upon that individual's current position with Fundtech, internal comparability
with option grants made to other executives (generally taking into account stock
volatility and recent stock appreciation) and the individual's potential for
future responsibility and promotion over the option term. Fiscal year 2001
option grants to
19
executive officers were determined based on the T.P. Report and were consistent
with the Compensation Committee's objective of raising executive officers' total
compensation to the median levels of the Company's group of peer companies.
CEO Compensation
On November 25, 1997, Fundtech entered into an employment agreement
with Reuven Ben-Menachem engaging him as the Chief Executive Officer of the
Company and of its U. S. subsidiary, Fundtech Corporation. Pursuant to his
employment agreement as modified, Mr. Ben-Menachem's base salary for 2001 was
established at $225,000 per annum. In addition, Mr. Ben-Menachem was eligible to
receive benefits and incentive bonuses for 2001 totaling $125,000.
Ms. Rina Shainski
Mr. Achi Racov
Dr. Jay B. Morrison
20
PERFORMANCE GRAPH
The following graph provides a comparison of the cumulative total
returns on the Ordinary Shares based on an investment of $100 after the close of
the market on March 13, 1998 (the date that the Ordinary Shares commenced
trading), plotted on a monthly basis for the period ending on December 31, 2000,
against the NASDAQ Market Index and the H & Q Computer Software Index, in each
case assuming reinvestment of any dividends. Dividends have not been declared on
the Ordinary Shares. The following graph is not, nor is it intended to be,
indicative of future performance of the Company's Ordinary Shares which
performance could be affected by factors and circumstances outside of the
Company's control.
21
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transaction with Director
The Company has entered into an agreement with Gil Weiser, a
director of the Company, to provide consulting services to and serve as Chairman
of the Executive Committee of BBP, the Company's indirectly wholly owned Swiss
subsidiary. The details of this agreement are set forth in Proposal 5 in which
the Company seeks shareholder approval of the agreement.
INDEPENDENT PUBLIC ACCOUNTANTS
Audit Fees
The aggregate fees billed for professional services rendered for the
audit of the Company's annual financial statement for the fiscal year ended
December 31, 2000 and the reviews of the financial statements included in the
Company's Forms 10-Q for 2000 was $229,133.
All Other Fees
The aggregate fees billed for services rendered by Ernst & Young LP
and its affiliates for the fiscal year ended December 31, 2000 was $149,451.
22
PROPOSAL 2 - ELECTION OF BEN-ZION ZILBERFARB AS AN EXTERNAL
DIRECTOR OF THE COMPANY FOR A FIXED PERIOD OF THREE YEARS
Under the Companies Law, companies incorporated under the laws of
Israel whose shares have been offered to the public in or outside of Israel are
required to appoint at least two external directors. The Board of Directors is
proposing that Ben-Zion Zilberfarb be elected as an external director for a
fixed period of three years. If elected, Mr. Zilberfarb will replace Jay B.
Morrison, who will resign from his position as external director effective and
pending upon election of his replacement.
The affirmative vote of the holders of a majority of the voting
power represented at the Annual Meeting in person or by proxy is necessary for
the election of Ben-Zion Zilberfarb as an external director. Such majority (i)
must include either at least one-third of the shares of non-controlling
shareholders voting on the matter or (ii) the total shares of non-controlling
shareholders voted against the nomination may not represent more than one
percent (1%) of the voting rights in the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
ELECTION OF BEN-ZION ZILBERFARB AS AN EXTERNAL DIRECTOR OF THE COMPANY FOR A
FIXED TERM THREE YEARS.
23
PROPOSAL 3 - RATIFICATION AND APPROVAL OF AN AMENDMENT TO THE DIRECTORS' OPTION
PLAN INCREASING THE NUMBER OF OPTIONS AVAILABLE FOR GRANT THEREUNDER AND
INCREASING THE ORDINARY SHARES RESERVED FOR ISSUANCE UPON EXERCISE OF SUCH
OPTIONS
Fundtech has used the Directors' Option Plan as a means to encourage
and provide incentives to individuals to serve as members of the Board of
Directors, thereby enabling Fundtech to attract and retain, for its benefit,
highly qualified directors. The Directors' Option Plan currently authorizes
options to purchase 137,000 Ordinary Shares to be issued. As of December 10,
2001, there were 18,500 Ordinary Shares remaining available for grant under the
Directors' Option Plan.
The Board of Directors is proposing to increase by 100,000 to a
total of 237,000 the number of options that may be granted pursuant to the
Directors' Option Plan as well as the number of authorized Ordinary Shares
reserved for issuance under the Directors' Option Plan in order to continue to
provide this important compensation element.
Terms of the Directors' Option Plan
The Compensation Committee administers the Directors' Option Plan.
Under the Directors' Option Plan, the Committee has sole authority in its
discretion, subject to the express limitations of the Directors' Option Plan, to
determine the exercise price of the Ordinary Shares covered by each option, the
number of Ordinary Shares subject to each option and the extent to which options
may be exercised in installments, and the terms and provisions of the respective
option agreements.
Currently, a total of 137,000 Ordinary Shares, subject to certain
adjustments, are reserved for issuance under the Directors' Option Plan. The
plan provides that if any options shall terminate for any reason or expire
without having been exercised in full, the Ordinary Shares not purchased under
such options shall again be available for the purposes of the Directors' Option
Plan.
The grant date for each option granted under the plan is the date
that the director is elected to the Board of Directors, and the term of the
options is generally five years from the grant date. Options are vested in
phases and subject to the specific terms provided by the Directors' Option Plan
become fully vested at the date of the first Annual Meeting accruing after the
grant date.
The Board of Directors may, from time to time, amend the Directors'
Option Plan in any respect. However, no amendment may be made without the
approval of the Company's shareholders if shareholder approval is required for
such amendment under applicable law.
A copy of the amendment to the Directors' Option Plan is attached to
this proxy as Appendix A.
The affirmative vote of the holders of a majority of the voting
power represented at the meeting in person or by proxy is necessary for
ratification and approval of the increase of number of Ordinary Shares reserved
under the Directors' Option Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
RATIFICATION AND APPROVAL OF AN AMENDMENT TO THE DIRECTORS' OPTION PLAN
INCREASING BY 100,000, TO A TOTAL OF 237,000, THE NUMBER OF OPTIONS THAT MAY BE
GRANTED PURSUANT TO THE DIRECTORS' OPTION PLAN AS WELL AS THE NUMBER OF ORDINARY
SHARES RESERVED FOR ISSUANCE UPON EXERCISE OF OPTIONS GRANTED PURSUANT TO THE
DIRECTORS' OPTION PLAN.
24
PROPOSAL 4 - APPROVAL OF FUNDTECH'S DIRECTORS' COMPENSATION FOR SERVICE DURING
THE TERM FOLLOWING THIS ANNUAL MEETING UNTIL THE SECOND ANNUAL MEETING FOLLOWING
THIS ANNUAL MEETING (CURRENTLY SCHEDULED FOR 2003)
Under the Companies Law, the shareholders of a company must approve
the payment of compensation and fees to its directors. Pursuant to certain
regulations promulgated under the Companies Law, the fees payable to external
directors must be within specific ranges specified in certain schedules thereto.
However, other regulations promulgated under the Companies Law provide that
companies, whose shares have been offered to the public outside of Israel, may
determine that the fees payable to external directors may be set other than in
accordance with these schedules, so long as the fees are not greater than the
average compensation paid to other directors serving on the Board of Directors.
Pursuant to Proposal 3, Shareholders are being asked to approve an increase in
the number of Ordinary Shares reserved for issuance under the Directors' Option
Plan. Upon approval of Proposal 3 at the Annual Meeting, Shareholders will be
asked to approve the following grants of options pursuant to the Directors'
Option Plan:
Following his election to serve after the Annual Meeting, each of
the directors (other than Reuven Ben Menachem and the external directors) will
be granted options to purchase 15,000 Ordinary Shares for serving on the Board
of Directors after this Annual Meeting and until the second annual meeting
following this Annual Meeting (i.e. the annual meeting currently scheduled for
2003) ("Second Annual Meeting"). Following his election/appointment to serve
after the Annual Meeting, Gil Weiser will be granted options to purchase an
additional 6,000 Ordinary Shares, above the first options to purchase 15,000
Ordinary Shares granted pursuant to shareholder approval at this Annual Meeting
(for a total 21,000), for serving on the Board of Directors after this Annual
Meeting and until the Second Annual Meeting. Following his election/appointment
to serve after the Annual Meeting, Yeoshua Agassi will be granted options to
purchase an additional 3,000 Ordinary Shares, above the first options to
purchase 15,000 Ordinary Shares granted pursuant to shareholder approval at this
Annual Meeting (for a total 18,000), for serving on the Board of Directors after
this Annual Meeting and until the Second Annual Meeting. Meir Shannie will be
granted options to purchase an additional 3,000 Ordinary Shares, above the first
options to purchase 15,000 Ordinary Shares granted pursuant to shareholder
approval at this Annual Meeting (for a total 18,000), for serving on the Board
of Directors after this Annual Meeting and until the Second Annual Meeting. Each
external director, will be granted options to purchase 15,000 Ordinary Shares,
for serving on the Board of Directors after this Annual Meeting and until the
Second Annual Meeting. In addition, at the same time as the other directors
receive their additional grants for periods following the Second Annual Meeting,
each external director, for serving on the Board of Directors for such period,
will be granted the average number of options granted to the other directors,
all subject to and in accordance with the applicable regulations promulgated
under the Companies Law.
All of these options will have an exercise price equal to the Fair
Market Value of such Ordinary Shares on the date they are granted and will vest
at the rate of sixteen and two thirds percent (16.67%) for each ninety (90) days
that the respective person serves continuously as a director of the Company
following this Annual Meeting. Subject to the availability of options in the
Director's Option Plan, the above grant of options shall apply pro-rata to the
directors appointed at the Annual Meeting as well as any other director lawfully
elected/appointed to the Company's Board of Directors between this Annual
Meeting and the Second Annual Meeting.
The term of the options shall be five years from the date such
options are granted. The Directors' Option Plan provides that if options
terminate for any reason or expire without having been exercised in full, the
Ordinary Shares not purchased under such options shall again be available for
the purposes of the Directors' Option Plan. The Compensation Committee shall
determine other conditions of the grants, including, but not limited to, the
exercise period for options vested thereunder.
The affirmative vote of the holders of a majority of the voting
power represented at the Annual Meeting in person or by proxy is necessary for
approval of the directors' compensation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
APPROVAL OF THE DIRECTORS' COMPENSATION AS SET FORTH ABOVE.
25
PROPOSAL 5 - RATIFICATION AND APPROVAL OF THE COMPENSATION OF MR. GIL WEISER, A
MEMBER OF THE BOARD OF DIRECTORS OF THE COMPANY, FOR CONSULTING SERVICES
PROVIDED TO AND FOR SERVING IN HIS CAPACITY AS THE CHAIRMAN OF THE EXECUTIVE
COMMITTEE OF BBP, THE COMPANY'S INDIRECTLY WHOLLY OWNED SWISS SUBSIDIARY AND TO
AUTHORIZE THE AUDIT COMMITTEE TO EXTEND THE TERM OF SUCH SERVICE
Under the Companies Law, the shareholders must approve all
compensation and fees paid or to be paid by the Company to any of its directors
regardless of the capacity for which such amounts are being paid. Accordingly,
at the Annual Meeting, the shareholders will be asked to ratify and approve the
compensation of Mr. Weiser, a member of the Board of Directors of the Company,
for consulting services to and for serving as the Chairman of the Executive
Committee of BBP, the Company's indirectly wholly owned Swiss subsidiary. The
duration of Mr. Weiser's service has commenced and will run from August 2000
until March 2002, unless extended by the Audit Committee of the Board of
Director's of the Company or unless previously terminated by either party upon
thirty (30) days advanced written notice to the other. The Audit Committee of
the Board of Directors, subject to shareholder approval, has established Mr.
Weiser's compensation for the duration of such consulting services and for
serving as the Chairman of the Executive Committee of BBP at $4,500 per month.
Such compensation is in addition to those grants of options received by him as a
member of the Board of Directors. In addition, the Board of Directors seeks
shareholder approval to authorize the Audit Committee to extend the term of such
service.
The affirmative vote of the holders of a majority of the voting
power represented at the Annual Meeting in person or by proxy is necessary for
ratification and approval of Mr. Weiser's compensation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
RATIFICATION AND APPROVAL OF THE COMPENSATION OF MR. WEISER FOR CONSULTING
SERVICE AND FOR SERVICE AS CHAIRMAN OF THE EXECUTIVE COMMITTEE OF BBP AND TO
AUTHORIZE THE AUDIT COMMITTEE TO EXTEND THE TERM OF SUCH SERVICE, ALL AS SET
FORTH ABOVE.
26
PROPOSAL 6 - RATIFICATION AND APPROVAL OF THE COMPENSATION OF AND GRANTS OF
OPTIONS TO MR. REUVEN BEN-MENACHEM, A MEMBER OF THE BOARD OF DIRECTORS OF THE
COMPANY, FOR SERVING IN HIS CAPACITY AS THE COMPANY'S CHIEF EXECUTIVE OFFICER
Under the Companies Law, the Shareholders must approve all
compensation and fees paid or to be paid by the Company to any of its directors
regardless of the capacity for which such amounts are being paid. Accordingly,
at the Annual Meeting, the shareholders will be asked to ratify and approve the
compensation of Mr. Ben-Menachem, a member of the Board of Directors of the
Company, for serving in his capacity as the Company's Chief Executive Officer
for fiscal year 2001 and for future periods. In accordance with the terms of his
employment agreement and the Companies Law, the Compensation Committee of the
Board of Directors and Audit Committee, subject to shareholder approval, have
established Mr. Ben-Menachem's 2001 fiscal year compensation for serving in his
capacity as Fundtech's Chief Executive Officer at a salary of $225,000 with
other benefits, bonuses and incentives for fiscal year 2001 of up to $125,000 in
the aggregate as determined by the Compensation Committee and the Audit
Committee. In addition, the Board of Directors proposes that the shareholders
approve additional grants for service as Chief Executive Officer of up to
100,000 options in aggregate, all as will be determined and approved by the
Compensation Committee and Audit Committees of the Board of Directors. Such
options will have an exercise price equal to the Fair Market Value of the
underlying Ordinary Shares on the date they are granted. The terms of these
options will be the same as the terms of the other options being granted under
the respective plans and proposals.
The affirmative vote of the holders of a majority of the voting
power represented at the Annual Meeting in person or by proxy is necessary for
ratification and approval of Mr. Reuven Ben-Menachem's compensation and Option
Awards.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
RATIFICATION AND APPROVAL OF THE COMPENSATION OF AND GRANTS OF OPTIONS TO MR.
REUVEN BEN-MENACHEM FOR SERVICE AS CHIEF EXECUTIVE OFFICER OF THE COMPANY ALL AS
SET FORTH ABOVE.
27
PROPOSAL 7 - RATIFICATION AND APPROVAL OF AMENDMENTS TO THE COMPANY'S 1997
PLANS, DECREASING THE AGGREGATE NUMBERS OF OPTIONS AVAILABLE FOR GRANT
THEREUNDER AND THE RESPECTIVE NUMBERS OF ORDINARY SHARES RESERVED FOR ISSUANCE
UPON EXERCISE OF SUCH OPTIONS AND AN AMENDMENT TO THE COMPANY'S 1999 OPTION PLAN
INCREASING THE AGGREGATE NUMBER OF OPTIONS AVAILABLE FOR GRANT THEREUNDER AND
THE NUMBER OF ORDINARY SHARES RESERVED FOR ISSUANCE UPON EXERCISE OF SUCH
OPTIONS (BY AN AMOUNT EQUAL TO THE EXPIRATIONS DUE TO THE LAPSE OF THE COMPANY'S
1996 PLANS AND THE REDUCTION IN THE 1997 PLANS)
Background
Fundtech has used the 1996 Plans, the 1997 Plans and the 1999 Option
Plan as means of attracting and retaining highly qualified employees by aligning
the employees' interest with those of Fundtech's other Shareholders. As of
December 10, 2001, 31,752 options have expired due to the lapse of the 1996
Plans, 218,857 options remained available for grant under the 1997 Israel Plan,
134,436 options remained available for grant under the 1997 U.S. Plan and
559,070 options remained available for grant under the 1999 Option Plan. Each
option had an equal number of Ordinary Shares reserved for issuance upon the
exercise of such option.
For a summary of the material terms of the 1996 Plans, the 1997
Plans and the 1999 Option Plan, see "Executive Compensation - Stock Option
Plans."
The Board of Directors is proposing that the shareholders vote to
ratify and approve amendments to the 1997 Plans and the 1999 Plan as follows:
(i) decreasing the aggregate number of options that may be granted pursuant to
the 1997 Israel Plan and decreasing the number of Ordinary Shares reserved for
issuance upon exercise of the options granted pursuant to such 1997 Israel Plan
by 218,857 options and Ordinary Shares to a total of 531,143 options and
Ordinary Shares; (iii) decreasing the aggregate number of options that may be
granted pursuant to the 1997 U.S. Plan and decreasing the number of Ordinary
Shares reserved for issuance upon exercise of the options granted pursuant to
such 1997 U.S. Plan by 134,436 options and Ordinary Shares to a total of 492,311
options and Ordinary Shares; and (iv) increasing the aggregate number of options
that may be granted pursuant to the 1999 Plan and increasing the number of
Ordinary Shares reserved for issuance upon exercise of the options granted
pursuant to such 1999 Plan by 385,045 options and Ordinary Shares (an amount
equivalent to the total expirations due to the lapse of the 1996 Plans as well
as the reductions in the 1997 Plans) to a total of 1,333,045 options and
Ordinary Shares.
It has become common practice for companies in high-tech industries,
many of which compete with the Company for attracting and retaining highly
qualified employees, to offer such employees options to purchase a large number
of shares of the capital stock of such companies. The Board of Directors is
seeking to increase the number of options authorized to be granted under the
1999 Plan as well as the number of Ordinary Shares available for issuance upon
exercise of such options by an amount equal to the expirations due to the lapse
of the 1996 Plans and the reductions in the 1997 Plans, in order to take
advantage of the terms of the more recently approved plan and to allow the
Company to remain competitive with such other companies in attracting and
retaining highly qualified employees by granting such employees options to
purchase a larger number of Ordinary Shares.
The Compensation Committee intends to use the options and Ordinary
Shares, for grants (and issuance upon exercise) to the Named Officers remaining
with the Company, the persons who will constitute "named officers" for the
fiscal year 2001 and beyond and other current and future employees of the
Company pursuant to the 1999 Plan. For grants to the Chief Executive Officer,
please see Proposal 6. The Compensation Committee currently intends to use the
remaining options for the above listed types of persons, though the amount and
terms of such grants have not yet been determined.
28
THIS PROPOSAL DOES NOT INCREASE THE NUMBER OF OPTIONS ALLOCATED TO
THE COMPANY OPTION PLANS ABOVE THE LEVEL APPROVED BY THE SHAREHOLDERS AT LAST
YEAR'S ANNUAL MEETING.
Copies of the amendments to the respective plans are attached to
this proxy as Appendix B.
The affirmative vote of the holders of a majority of the voting
power represented at the meeting in person or by proxy is necessary for
ratification and approval of the amendments in the number of options which may
be granted pursuant to the 1997 Plans and the 1999 Option Plan as well as the
number of Ordinary Shares reserved for issuance upon exercise of the options
granted pursuant to such plans.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION,
ADOPTION AND APPROVAL OF THE ATTACHED AMENDMENTS TO THE RESPECTIVE OPTION PLANS
(I) DECREASING THE AGGREGATE NUMBER OF OPTIONS THAT MAY BE GRANTED PURSUANT TO
THE 1997 ISRAEL PLAN AND DECREASING THE NUMBER OF ORDINARY SHARES RESERVED FOR
ISSUANCE UPON EXERCISE OF THE OPTIONS GRANTED PURSUANT TO SUCH 1997 ISRAEL PLAN
BY 218,857 OPTIONS AND ORDINARY SHARES TO A TOTAL OF 531,143 OPTIONS AND
ORDINARY SHARES; (II) DECREASING THE AGGREGATE NUMBER OF OPTIONS THAT MAY BE
GRANTED PURSUANT TO THE 1997 U.S. PLAN AND DECREASING THE NUMBER OF ORDINARY
SHARES RESERVED FOR ISSUANCE UPON EXERCISE OF THE OPTIONS GRANTED PURSUANT TO
SUCH 1997 U. S. PLAN BY 134,436 OPTIONS AND ORDINARY SHARES TO A TOTAL OF
492,311 OPTIONS AND ORDINARY SHARES; AND (III) INCREASING THE AGGREGATE NUMBER
OF OPTIONS THAT MAY BE GRANTED PURSUANT TO THE 1999 PLAN AND INCREASING THE
NUMBER OF ORDINARY SHARES RESERVED FOR ISSUANCE UPON EXERCISE OF THE OPTIONS
GRANTED PURSUANT TO SUCH 1999 PLAN BY 385,045 OPTIONS AND ORDINARY SHARES (AN
AMOUNT EQUAL TO THE EXPIRATIONS OF 31,752 OPTIONS PREVIOUSLY AVAILABLE FOR
ISSUANCE DUE TO THE LAPSE IN THE 1996 PLANS AND THE REDUCTION BY 353,293 OF THE
OPTIONS AVAILABLE UNDER THE 1997 PLANS) TO A TOTAL OF 1,333,045 OPTIONS AND
ORDINARY SHARES, ALL AS SET FORTH ABOVE.
29
PROPOSAL 8 - APPOINTMENT OF AUDITORS AND AUTHORIZING THE BOARD OF DIRECTORS TO
SET THE REMUNERATION FOR SUCH AUDITORS
Kost, Forer and Gabbay, a member of Ernst and Young International,
independent auditors, audited the financial statements of the Company for the
year ended December 31, 2000, contained in the Company's Annual Report on Form
10-K. The audit services consisted of the firm's audit of and report on such
financial statements and other annual financial statements of the Company and
other matters.
Representatives of Kost, Forer and Gabbay are expected to attend the
Annual Meeting and will have the opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions.
Based upon the recommendation of the Audit Committee, and subject to
ratification by the Shareholders, the Board of Directors has appointed Kost,
Forer and Gabbay, independent auditors, as auditors for the Company for the
fiscal year ending December 31, 2001.
The Board of Directors is seeking (i) the approval of the
shareholders, as required by the Companies Law, for the appointment of Kost,
Forer & Gabbay as the independent auditors of the Company for the fiscal year
ending December 31, 2001, and (ii) the authorization by the shareholders to
enter into an agreement to pay the fees of Kost, Forer & Gabbay as independent
auditors of the Company on terms customary for the Israeli market.
The affirmative vote of the holders of a majority of the voting
power represented at the Annual Meeting in person or by proxy is necessary for
approval of the appointment of Kost, Forer & Gabbay as independent auditors of
the Company and the authorization of the Board of Directors entering into an
agreement with Kost, Forer & Gabbay with respect to the fees for its services.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" (I) THE APPROVAL OF
THE APPOINTMENT OF KOST, FORER & GABBAY AS THE INDEPENDENT AUDITORS OF THE
COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2001 AND (II) THE AUTHORIZATION
OF THE BOARD OF DIRECTORS TO ENTER INTO AN AGREEMENT TO PAY THE FEES OF KOST,
FORER & GABBAY AS INDEPENDENT AUDITORS OF THE COMPANY.
30
PROPOSAL 9 - AMENDMENT TO ARTICLES OF ASSOCIATION
On February 1, 2000, the Companies Law came into effect. The
Companies Law supercedes most of the provisions of the Israeli Companies
Ordinance [New Version], 5743-1983. In light of the changes to the corporate law
governing the Company, the Board of Directors recommends that the shareholders
adopt the amended and restated Articles of Association, substantially in the
form attached hereto as Appendix B.
The proposed changes to our Articles of Association include, but are
not limited to:
Restatement of the objectives of the Company from a specific
list of objectives to a general statement allowing all types
of business permitted by law;
Election of external directors in accordance with the
Companies Law;
Specifying the type of and time for notice to be given by the
Company for shareholder meetings and Board of Directors
Meetings;
Removing specific provisions regarding approval of
transactions with affiliates, which shall instead be governed
by the Companies Law;
Requiring that the appointment of the Chief Executive Officer
as Chairman of the Board be approved by the Shareholders, as
required by the Companies Law;
Authorizing the Internal Auditor of the Company to convene
meetings of the Board of Directors;
Authorizing the Board of Directors to hold meetings using
electronic means of communications;
Authorizing the Board of Directors to declare all dividends in
respect of the Company's shares of capital stock;
Authorizing the Shareholders to approve the appointment of
outside auditors of the Company to serve for three years, and
allowing the Board of Directors to set the fees of the outside
auditors in certain instances;
Authorizing the indemnification of the Company's office
holders to the fullest extent permitted under the Companies
Law; and
Authorizing the Company to exempt its officer holders from
their duty of care to the Company, in whole or in part; and
Eliminate the requirement, in certain cases, for special
resolutions of the shareholders (75% vote), and determine that
all resolutions of the shareholders, including resolutions
relating to any changes in the Articles of Association, will
be subject to a simple majority vote (ordinary resolution),
except as otherwise provided by the Companies Law.
The list above does not purport to be complete, and shareholders are urged to
review the form of Articles of Association set forth in Appendix C.
The affirmative vote of the holders of 75% of the voting power
represented at the Annual Meeting in person or by proxy is necessary for
approval of the amendment of the Articles of Association of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL AND
ADOPTION OF THE AMENDED AND RESTATED ARTICLES OF ASSOCIATION OF THE COMPANY IN
THE FORM ATTACHED HERETO AS APPENDIX C.
31
PROPOSAL 10 - APPROVAL OF PURCHASE OF INSURANCE FOR THE BENEFIT OF DIRECTORS,
THE UNDERTAKING IN ADVANCE TO INDEMNIFY SUCH DIRECTORS AND THE EXEMPTION OF SUCH
DIRECTORS FROM THEIR DUTY OF CARE
Under the Companies Law, a company may undertake the following,
provided that such actions are authorized by the company's articles of
association; (i) to insure an office holder for the breach of his duty of care
or, to the extent he acted in good faith and had a reasonable basis to believe
that the act would not prejudice the company, for the breach of his fiduciary
duty as well as for monetary liabilities charged against him as a result of an
act or omission he committed in connection with his service as an office holder
of the company, and (ii) to indemnify an office holder for monetary liability
incurred by him pursuant to a judgment, including a settlement or arbitration
decision approved by a court, as well as for reasonable legal expenses incurred
by him in an action brought against him by or on behalf of the company or
others, or as a result of a criminal charge of which he was acquitted, or as a
result of a criminal procedure in which he was convicted of a felony which does
not require proof of criminal intent provided that any such liability or expense
incurred by such office holder is due to an action performed by such office
holder by virtue of his position with the company. Under the Companies Law, a
company is entitled to undertake in advance to indemnify an office holder for
the breach of his of care, provided that the articles of association of the
company permit such indemnification in advance and further provided that such
indemnification shall be limited to the type of events that, in the discretion
of the board of directors of the company, may be anticipated at such time of
undertaking and that such undertaking shall be limited to an amount which the
Board of Directors deems reasonable in light of the applicable circumstances. A
company may not indemnify an office holder nor enter into an insurance contract
which would provide coverage for any liability incurred as a result of the
following: (i) a breach by the office holder of his fiduciary duty unless he
acted in good faith and had a reasonable basis to believe that the act would not
prejudice the company; (ii) a breach by the office holder of his duty of care if
such breach was done intentionally or recklessly; (iii) any act or omission done
with the intent to derive an unlawful personal benefit; or (iv) any fine levied
against such office holder. In addition, under the Companies Law a company may
exempt an office holder from his duty of care to the company, in whole or in
part, provided that such actions are authorized by the company's articles of
association.
In order for the Company to retain and secure the services of the
Company's current directors, and to encourage highly qualified persons to join
the Company's Board of Directors in the future, the Company proposes (i) to
provide its directors with customary insurance, the exact terms of which shall
be determined by the Board of Directors, and (ii) subject to the approval of
Proposal 9 set forth above: (a) to undertake in advance to indemnify its
directors for monetary liability incurred in connection with their position, and
(iii) to exempt the Company's directors from their duty of care to the Company,
all subject to, and to the fullest extent permitted by, the Companies Law.
The affirmative vote for the holders of a majority of the voting
power represented at the Annual Meeting in person or by proxy is necessary for
approval of the above insurance, indemnification in advance and exemption.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
INSURANCE, INDEMNIFICATION IN ADVANCE AND EXEMPTION SET FORTH ABOVE.
32
PROPOSALS OF SHAREHOLDERS
The Company intends to hold the Annual Meeting of Shareholders for
fiscal year 2001 in the early summer of 2002. Any shareholder of the Company
wishing to include proposals in the proxy materials for such meeting must meet
the requirements of Rule 14a-8 promulgated under the Securities Exchange Act of
1934, as amended, relating to shareholders' proposals. Such proposal must be
received by the Secretary of the Company in writing at the principal executive
offices of the Company prior to May 1, 2002. Under such rule, one or more
shareholder(s) continuously holding at least $2,000 in market value, or 1% of
the Company's securities entitled to be voted on the proposal for at least one
year from the date such proposal is submitted, may, subject to certain
limitations, request the Board of Directors to include such proposal in the
Company's proxy.
Under the provisions of the Companies Law, one or more
shareholder(s), holding at least 1% of the voting rights in the Company, may
request the Board of Directors to include a proposal on the agenda for any
future General Meeting, provided that the nature of such proposal is applicable
to a discussion by the General Meeting.
OTHER BUSINESS
The Board of Directors of the Company is not aware of any other
matters that may be presented at the Annual Meeting other than those mentioned
in the attached Company's Notice of Annual Meeting of Shareholders. If any other
matters do properly come before the Annual Meeting, it is intended that the
persons named as proxies will vote, pursuant to their discretionary authority,
according to their best judgment in the interest of the Company.
By Order of the Board of Directors,
/s/ Michael S. Hyman
----------------------------------
Michael S. Hyman
Vice President, General Counsel and
Secretary
Ramat-Gan, Israel
January 4, 2002
33
APPENDIX A
AMENDMENT TO DIRECTORS' OPTION PLAN
Third Amendment
to the
Fundtech Ltd. Directors' Option Plan
Fundtech Ltd. Directors' Option Plan (the "Plan") is hereby amended by
increasing the aggregate number of ordinary shares of Company stock that may be
subject to option awards set forth in the first sentence of Section 3 of the
Plan to 237,000.
Executed this 1st day of February 2002 to be effective on January 31,
2002.
Fundtech Ltd.
By _________________________
Member of the
Compensation Committee
APPENDIX B
AMENDMENTS TO THE 1997 PLANS AND THE 1999 PLAN
Amendment
to the
Fundtech Ltd.
1997 Stock Option Plan For Fundtech Corporation
Fundtech Ltd.
1997 Stock Option Plan For Fundtech Corporation (the "Plan") is hereby
amended by decreasing the aggregate number of ordinary shares of Company stock
that may be subject to option awards set forth in the first sentence of Section
3 of the Plan to 492,311.
Executed this 1st day of February 2002 to be effective on January 31,
2002.
Fundtech Ltd.
By _____________________
Member of the
Compensation Committee
Amendment
to the
Fundtech Ltd.
1997 Israeli Share Option Plan
1997 Israeli Share Option Plan (the "Plan") is hereby amended by
decreasing the aggregate number of ordinary shares of Company stock that may be
subject to option awards set forth in the first sentence of Section 6.1 of the
Plan to 531,143.
Executed this 1st day of February 2002 to be effective on January 31,
2002.
Fundtech Ltd.
By _______________________
Member of the
Compensation Committee
2
Amendment
to the
Fundtech Ltd.
1999 Employee Option Plan
The Fundtech Ltd. 1999 Employee Option Plan (the "Plan") is hereby amended
by increasing the aggregate number of ordinary shares of Company stock that may
be subject to option awards set forth in the first sentence of Section 4 of the
Plan to 1,333,045.
Executed this 1st day of February 2002 to be effective on January 31,
2002.
Fundtech Ltd.
By _____________________
Member of the
Compensation Committee
3
APPENDIX C
Amended and Restated Articles of Association
THE COMPANIES LAW - 1999
A COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
OF
FUNDTECH LTD.
THE COMPANIES LAW - 5758 - 1999
-------------------------------
A COMPANY LIMITED BY SHARES
---------------------------
ARTICLES OF ASSOCIATION
-----------------------
OF
--
FUNDTECH LTD.
-------------
Preliminary
-----------
1. Interpretation.
--------------
1.1 In these Articles, unless the context requires another
meaning the words in the first column of the following
table shall have the meanings set opposite them in the
second column:
"Annual General Meeting" means a general meeting of
or "Annual Meeting" the shareholders of the
Company in accordance with
Section 60 of the Companies
Law;
"Articles" means these Articles of
Association as from time to
time amended by an Ordinary
Resolution (as defined
below);
"Auditors" means the auditors of the
Company;
"The Company" means the above mentioned
company;
"The Companies Law" or means the Companies Law 5758
"the Law" - 1999, as amended from time
to time, or any other law
which may come in its stead,
including all amendments
made thereto and all
regulations promulgated
thereunder;
"The U.S. rules" means the rules of The
NASDAQ National Market and
the U.S. Securities
Regulations, as amended from
time to time;
"Person" includes a company,
cooperative society, or any
other body of persons,
whether incorporated or
otherwise;
"Board of Directors" means all the directors of
the Company, including
elected directors, the
chairman, holding office
pursuant to these Articles,
including alternates,
substitutes or proxies;
"Elected Director/s" means a member or members of
the Board of Directors
elected to hold office as
director/s;
"External Directors" As defined under the Law and
under the U.S. rules;
"Office Holder" as defined in the Companies
Law;
"C.E.O." means the chief executive
officer (mankal);
"Chairman of the Board of as defined in article 90
Directors" these Articles.
"General Meetings" means all Annual and Special
Meetings of the shareholders
of the Company;
"NIS" means New Israeli Shekels;
"The Office" means the registered office
of the Company for the time
being;
"The Register" means the Register of
Shareholders administered in
accordance with Section 127
of the Law;
"Writing" means in handwriting,
typewriting, photography,
telex, fax, e-mail
confirmation or any other
legible form;
"Month" or "Year" according to the Gregorian
calendar.
"Ordinary Resolution" means a resolution of
shareholders of the Company
holding a majority of voting
power represented at a
shareholders meeting in
person or by proxy and
voting thereon and/or voting
by Ballot according to
Section 87 of the Law;
"Special Meeting" means any General Meeting of
the shareholders of the
Company which is not an
Annual Meeting.
1.2 Words and expressions defined in the Memorandum of
Association of the Company shall have the meanings in
these Articles as ascribed to them therein.
1.3 Subject to the provisions of this article, in these
Articles, unless the context necessitates another
meaning, terms and expressions which have been defined
in the Companies Law shall have the meanings ascribed to
them therein.
1.4 Words in the singular shall also include the plural, and
vice versa. Words in the masculine shall include the
feminine and vice versa, and words which refer to
persons shall also include corporations, and vice versa.
1.5 In these Articles, all the provisions are subject to the
Companies Law and/or to the U.S. rules, insofar as they
are applicable.
1.6 The captions to articles in these Articles are intended
for the convenience of the reader only, and no use shall
be made thereof in the interpretation of these Articles.
2
Limited Liability
-----------------
2. The Company is a Limited Liability Company and therefore each
shareholder's obligations to the Company's obligations shall be
limited to the payment of the par value of the shares held by such
shareholders, subject to the provisions of the Companies Law.
The Company's Objectives and purposes
-------------------------------------
3. The Company's objectives are to carry on any legal business and do
any act which are not prohibited by law. The Company may also make
contributions of reasonable sums to worthy purposes even if such
contributions are not made on the basis of business considerations.
The Business
------------
4. Any branch or type of business which the Company is authorized to
engage in, either expressly or implied, may be commenced or engaged
in by the Board of Directors at all or any time as it deems fit. The
Board of Directors shall be entitled to cease the conduct of any
such branch or type of business, whether or not the actual conduct
thereof has commenced, for as long as the Board of Directors deems
it conducive not to commence and/or to cease conducting a particular
branch or type of business.
Registered Office
-----------------
5. The registered office shall be at such place as is decided from time
to time by the Board of Directors.
Share Capital
-------------
6. The share capital of the Company is NIS 200,000 (Two hundred
thousand NIS) divided into:
(i) 19,949,998 (Nineteen million, nine hundred and forty nine
thousand, nine hundred and ninety eight)Ordinary Shares of a nominal
value of NIS 0.01 (One Agora) each (the "Ordinary Shares"); and
(ii) 50,002 (Fifty thousand and two) Deferred Shares of a nominal
value of NIS 0.01 (One Agora) each (the "Deferred Shares").
7. Rights Attaching to the Ordinary Shares.
---------------------------------------
7.1 At General Meetings of the Company every holder of an
Ordinary Share in respect of which all the calls on such
share have been paid in full, who is personally present
or represented by proxy or by a ballot in accordance
with Section 87 of the Companies Law, shall have one
vote in respect of each Ordinary Share held by him,
without reference to the par value thereof.
7.2 The Ordinary Shares in respect of which all calls have
been fully paid shall confer on their holders the right
to receive notices of, to attend and to vote at General
Meetings of the Company, both Annual as well as Special
Meetings. The Ordinary Shares shall confer on the holder
thereof the right to receive a dividend (if
distributed), to participate in a distribution of bonus
shares (if distributed) and to participate in the assets
of the Company upon its winding-up, pro rata to the
nominal amount paid up on the shares or
3
credited as paid up in respect thereof, and without
reference to any premium which may have been paid in
respect thereof.
7.3 All the Ordinary Shares shall rank pari passu in all
respects.
8. Rights Attaching to the Deferred Shares.
---------------------------------------
The Deferred Shares shall confer on their holders the sole right to
receive their par value upon liquidation or winding up of the
Company. The Deferred Shares shall not have any other rights,
including voting rights or rights to receive dividends of any kind.
9. Alteration of Rights.
--------------------
9.1 Subject to applicable law, if at any time the share
capital of the Company is divided into different classes
of shares and unless the terms of issue of such class of
shares otherwise stipulate, the rights attaching to any
class of shares (including rights prescribed in the
terms of issue of the shares) may be altered, modified
or canceled, by an Ordinary Resolution passed at a
separate General Meeting of the shareholders of that
class.
9.2 The provisions contained in these Articles with regard
to General Meetings shall apply, mutatis mutandis as the
case may be, to every such General Meeting of the
holders of each class of the Company's shares.
10. Issuance of Preferred Shares
----------------------------
Without prejudice to the special rights conferred on the holders of
shares or debentures of the Company, the Company may issue shares
having preferred or deferred rights, or may issue redeemable
preference shares and may redeem same on such conditions and in such
manner as the Company shall decide, subject to the provisions of any
applicable law, from time to time, or may issue shares having
special rights in regard to the distribution of dividends, voting
rights, rights on winding-up or in connection with any other
matters, as the Company may from time to time decide.
11. Unissued Share Capital
----------------------
The unissued shares in the capital of the Company shall be under the
control of the Board of Directors, which shall be entitled to allot
or otherwise grant same to such persons under such restrictions and
conditions as it shall deem fit and conducive, whether for
consideration or otherwise, and whether for consideration in cash or
for consideration which is not in cash, above their par value or at
a discount, all on such conditions, in such manner and at such times
as the board of Directors shall deem fit, and subject to the
provisions of the Law. The Board of Directors shall be entitled,
inter alia, to differentiate between shareholders with regard to the
amounts of calls in respect of the allotment of shares (to the
extent that there are calls) and with regard to the time for payment
thereof. The Board of Directors may also issue warrants for the
purchase of shares of the Company and prescribe the manner of the
exercise of options, including the time and price for such exercise
and any other provision which is relevant to the method for
distributing the issued shares of the Company amongst the purchasers
thereof.
12. The Board of Directors shall be entitled to prescribe that the
existing shares in the capital of the Company be issued and the
times for the issue and the conditions thereof and any other matter
which may arise in connection with the issue thereof.
13. Subject to the provisions of the Law the Board of Directors may pay
brokerage and/or subscription commissions to any person in respect
of the subscription and/or agreement to subscribe and/or the
procuring of subscriptions and/or a promise to subscribe for shares
and/or debentures and/or other
4
securities of the Company. The Board of Directors shall further be
entitled in ever case of the issue of securities of the Company to
pay brokerage fees, subject to the provisions of the Law.
14. In every case of a rights offer to the shareholders, the Board of
Directors shall be entitled to decide whether the shares offered
shall be of a uniform class for all the shareholders, or that an
offer shall be made to each holder of shares of the same class in
respect of which he is entitled to participate in the rights offer.
15. In every case of a rights offer the Board of Directors shall be
entitled, in its discretion, to resolve any problems and
difficulties likely to arise in regard to fractions of rights, and
without prejudice to the generality of the foregoing, the Board of
Directors shall be entitled to specify that no shares shall be
allotted in respect of fractions of rights, or that fractions of
rights shall be sold and the (net) proceeds shall be paid to the
persons entitled to the fractions of rights, or, in accordance with
a decision by the Board of Directors, to the benefit of the Company.
Increase of and Alterations to Capital
--------------------------------------
16. The Company may, from time to time, by an Ordinary Resolution,
increase its share capital by way of the creation of new shares,
whether or not all the existing shares have been issued up to the
date of the resolution, whether or not it has been decided to issue
same, and whether or not calls have been made on all the issued
shares.
17. The increase of capital shall be in such amount and divided into
shares of such nominal value, and with such restrictions and
conditions and with such rights and privileges as the Ordinary
Resolution dealing with the creation of the shares prescribes,
subject to the special rights of an existing class of shares, and if
no provisions are contained in the Ordinary Resolution, then as the
Board of Directors shall prescribe.
18. Subject to the provisions of these Articles and the Companies Law,
the Company may create shares having preferred rights or restricted
rights in regard to dividends or participation in assets on
winding-up, or with a special right for voting, or without voting
rights.
19. Unless otherwise stated in the Ordinary Resolution approving the
increase of the share capital, the new shares shall be subject to
those provisions in regard to issue, allotment, alteration of
rights, payment of calls, liens, forfeiture, transfer, transmission
and other provisions which apply to the shares of the Company.
20. By Ordinary Resolution, the Company may:
20.1 consolidate and sub-divide its existing share capital,
or any part thereof, into shares of a larger or smaller
(as applicable) denomination than the existing shares:
20.2 sub-divide, by way of a redistribution of the existing
shares, in whole or in part, its share capital, in whole
or in part, into shares of a smaller denomination than
nominal value of the existing shares and without
prejudice to the foregoing, one or more of the shares so
created may be granted any preferred or deferred right
or any special right with regard to dividend,
participation in assets on winding-up, voting and so
forth, subject always to the provisions of the Law and
these Articles;
20.3 reduce its issued share capital in such manner and
subject to the such restrictions as the Law prescribes;
20.4 Cancel any shares which on the date of passing of the
resolution have not been issued and reduce its
authorized share capital by the amount of the shares so
canceled.
5
21. In the event that the Company shall adopt any of the resolutions
described in Article 20 above, the Board of Directors shall be
entitled to prescribe arrangements necessary in order to resolve any
difficulty likely to arise in connection with such resolutions,
including in the event of a consolidation in which it shall be
entitled to prescribe which shares shall be consolidated into a
particular class of share, and in the case of the consolidation of
shares which are not owned by the same owner, it shall be entitled
to specify arrangements for the sale of the consolidated share, the
manner of selling it and the manner of distributing the (net)
proceeds and may appoint a person to execute the transfer and any
act done by such person shall be valid and no allegations against
him shall be entertained.
Share Certificates
------------------
22. Share certificates evidencing title to the shares of the Company
shall be issued under the seal or rubber stamp of the Company, and
together with the signatures of two members of the Board of
Directors, or one director together with the secretary of the
Company. The Board of Directors shall be entitled to decide that the
signatures be effected in any mechanical form, provided that the
signature shall be effected under the supervision of the Board of
Directors in such manner as it prescribes.
23. Every member shall be entitled, free of charge, to one certificate
in respect of all the shares of a single class registered in his
name.
24. The Board of Directors shall not refuse a request by a shareholder
to obtain several certificates in place of one certificate, unless
such request is, in the opinion of the Board of Directors,
unreasonable. Where a shareholder has sold or transferred some of
his shares, he shall be entitled, free of charge, to receive a
certificate in respect of his remaining shares, provided that the
previous certificate is delivered to the Company before the issuance
of a new certificate.
25. Every share certificate shall specify the number of the shares in
respect of which the certificate is issued and also the amounts
which have been paid up in respect of each share.
26. No person shall be recognized by the Company as having any right to
a share unless he is the registered owner of the shares in the
Register. The Company shall not be bound by and shall not recognize
any right or privilege pursuant to the laws of equity, or a
fiduciary relationship or a chose in action, future or partial, in
any share, or a right or privilege to a fraction of a share, or
(unless these Articles otherwise direct) any other right in respect
of a share, except the absolute right to the share as a whole, where
same is vested in the owner registered in the Register.
27. A share certificate registered in the names of two or more persons
shall be delivered to one of the joint holders, and the Company
shall not be obliged to issue more than one certificate to all the
joint holders of shares and the delivery of such certificate to one
of the joint holders shall be deemed to be delivery to all of them.
28. If a share certificate, whether a registered share or bearer share,
should be lost, destroyed or defaced, or should any coupon to a
bearer share certificate be lost, destroyed or defaced, the Board of
Directors shall be entitled to issue a new certificate or coupon in
its place, provided that the certificate or coupon is delivered to
it and destroyed by it, or it is proved to the satisfaction of the
Board of Directors that the certificate or coupon was lost or
destroyed and security has been received to its satisfaction in
respect of any possible damages and after payment of such amount as
the Board of Directors shall prescribe.
6
Calls on Shares
---------------
29. The Board of Directors may from time to time, in its discretion,
make calls on shareholders in respect of amounts which are still
unpaid in respect of the shares held by each of the shareholders
(including premiums), and the terms of issue which do not prescribe
that same be paid at fixed times, and every shareholder shall be
obliged to pay the amount of the call made on him, at such time and
at such place as stipulated by the Board of Directors.
30. In respect of every call prior notice of at least 14 business days
shall be given, stating to whom the amount called is to be paid, the
time for payment and the place thereof, provided that prior to the
due date for payment of such call, the Board of Directors may, by
written notice to the shareholders, cancel the call or extend the
date of payment thereof. A call shall be deemed to have been made on
the date on which the directors decide on the call.
31. If according to the terms of issue of any share, or otherwise, any
amount is required to be paid at a fixed time or in installments at
fixed times, whether the payment is made on account of the share
capital in respect of the share or in the form of a premium, every
such payment or every such installment shall be paid as if it was a
call duly made by the Board of Directors, in respect of which notice
was duly given, and all the provisions contained in these Articles
in regard to calls shall apply to such amount or to such
installment.
32. Joint holders of a share shall be jointly and severally liable for
the payment of all installments and calls due in respect of such
share.
33. In the event that a call or installment due on account of a share is
not paid on or before the date fixed for payment thereof, the holder
of the share, or the person to whom the share has been allotted,
shall be obliged to pay linkage differentials and interest on the
amount of the call or the installment, at such rate as shall be
determined by the Board of Directors, commencing from the date fixed
for the payment thereof and until the date of actual payment. The
Board of Directors may, however, waive the payment of the linkage
differentials or the interest or part thereof.
34. A shareholder shall not be entitled to receive a dividend and shall
not be entitled to exercise any right as a shareholder, including
but not limited to, the right to receive notices of General Meetings
of any type of the Company and the right to attend and vote thereat
and to transfer the shares to another, unless he has paid all the
calls payable from time to time and which apply to any of his
shares, whether he holds same alone or jointly with another, plus
linkage differentials, interest and expenses, if any.
35. The Board of Directors may, if it deems fit, accept payment from a
shareholder wishing to anticipate the payment of all moneys which
remain unpaid on account of his shares, or part thereof which are
over and above the amounts which have actually been called, and the
Board of Directors shall be entitled to pay such shareholder linkage
differentials and interest in respect of the amounts paid in
advance, or that portion thereof which exceeds the amount called for
the time being on account of the shares in respect of which the
advance payment is made, at such rate as is agreed upon between the
board of Directors and the shareholder, with this being in addition
to dividends payable (if any) on the paid-up portion of the share in
respect of which the advance payment is made.
The Board of Directors may, at any time, repay the amount paid in
advance as aforesaid, in whole or in part, in its sole discretion.
7
Forfeiture and Lien
-------------------
36. If a shareholder fails to make payment of any call or other
installment on or before the date fixed for the payment thereof, the
Board of Directors may, at any time thereafter and for as long as
the part of the call or installment remains unpaid, serve on him a
notice demanding that he make payment thereof, together with the
linkage differentials and interest at such rate as is specified by
the Board of Directors and all the expenses incurred by the Company
in consequence of such non-payment.
37. The notice shall specify a further date, which shall be at least 14
business days after the date of the notice, and a place or places at
which such call or installment is to be paid, together with linkage
differentials and interest and expenses as aforesaid.
The notice shall further state that, if the amount is not paid on or
before the date specified, and at the place mentioned in such
notice, the shares in respect of which the call was made, or the
installment is due, shall be liable to forfeiture.
38. If the demands contained in such notice are not complied with the
Board of Directors may treat the shares in respect of which the
notice referred to in Articles 36 and 37 was given as forfeited.
Such forfeiture shall include all the dividends bonus shares and
other benefits which have been declared in respect of the forfeited
shares which have not actually been paid prior to the forfeiture.
39. Any share so forfeited or waived shall be deemed to be the property
of the Company and the Board of Directors shall be entitled subject
to the provisions of these Articles and the Law, to sell, re-allot
or otherwise dispose thereof, as it deems fit, whether the amount
paid previously in respect of that share is credited, in whole or in
part.
The Board of Directors shall be entitled to collect the moneys which
have been forfeited, or part thereof, as it shall deem fit, but it
shall not be obliged to do so.
40. The Board of Directors may, at any time before any share forfeited
as aforesaid is sold or re-allotted or otherwise dispose of, cancel
the forfeiture on such conditions as it deems fit.
41. Any person whose shares have been forfeited shall cease to be a
shareholder in respect of the forfeited shares, but shall,
nonetheless remain liable for the payment to the Company of all
calls, installments, linkage differentials, interest and expenses
due on account of or in respect of such shares on the date of
forfeiture, in respect of the forfeited shares, together with
interest on such amounts reckoned from the date of forfeiture until
the date of payment, at such rate as the Board of Directors shall
form time to time specify. However, his liability shall cease after
the Company has received all the amounts called in respect of the
shares.
42. The provisions of these Articles in regard to forfeiture shall also
apply to cases of non-payment of any amount, which, according to the
terms of issue of the share, or which under the conditions of
allotment the due date for payment of which fell on a fixed date,
whether this be on account of the par value of the share or in the
form of a premium, as if such amount was payable pursuant to a call
duly made and notified.
43. The Company shall have a first and paramount lien over all the
shares which have not been fully paid up and which are registered in
the name of any shareholder (whether individually or jointly with
others) and also over the proceeds of the sale thereof, as security
for the debts and obligations of such shareholder to the Company and
his contractual engagements with it, either individually or together
with others. This right of lien shall apply whether or not the due
date for payment of such debts or the fulfillment or performance of
such obligations has arrived, and no rights in equity shall be
created in respect of any share, over which there is a lien as
aforesaid. The aforesaid lien shall apply to all dividends or
benefits which may be declared, from time to time, on such shares,
8
unless the Board of Directors shall decide otherwise. Registration
by the Company of a transfer of shares shall be deemed to be a
waiver by the Company of the lien (if any) on the shares.
44. In order to realize such lien, the Board of Directors may sell the
shares under lien at such time and in such manner as, it shall deem
fit, but no share may be sold unless the period referred to below
has elapsed and written notice has been given to the shareholder,
his trustee, liquidator, receiver, the executors of his estate, or
anyone who acquires a right to shares in consequences of the
bankruptcy of a shareholder, as the case may be, stating that the
Company intends to sell the shares, if he or they should fail to pay
the aforesaid debts, or fail to discharge or fulfill the aforesaid
obligations within seven days form the date of the notice.
45. The net proceeds of any such sale of shares, after deduction of the
expenses attendant on the sale, shall serve for the discharge of the
debts of such shareholder or for performance of such shareholder's
obligations (including debts, undertaking and contractual
engagements due date for the payment or performance of which has
arrived) and the surplus, if any, shall be paid to the shareholder,
his trustee, liquidator, receiver, guardians, the executors of his
estate, or to his successors-in-title.
46. In every case of a sale following forfeiture or waiver, or for
purposes of executing a lien by exercising all the powers conferred
above, the Board of Directors shall be entitled to appoint a person
to sign an instrument of transfer of the shares sold, and to arrange
for the registration of the name of the buyer in the Register in
respect of the shares sold.
47. An affidavit signed by the Board of Directors that a particular
share of the Company was forfeited, waived or sold by the Company by
virtue of a lien, shall serve as conclusive evidence of the facts
contained therein as against any person claiming a right in the
share. The purchaser of a share who relies on such affidavit shall
not be obliged to investigate whether the sale, re-allotment or
transfer, or the amount of consideration and the manner of
application of the proceeds of the sale, were lawfully effected, and
after his name has been registered in the Register he shall have a
full right of title to the share and such right shall not be
adversely affected by a defect or invalidity which occurred in the
forfeiture, waiver, sale, re-allotment or transfer of the share.
Transfer and Transmission of Shares
-----------------------------------
48. No transfer of shares shall be registered in the Register unless a
proper instrument of transfer is delivered to the Company or to such
other place specified for this purpose by the Board of Directors.
Subject to the provisions of these Articles an instrument of
transfer of a share in the Company shall be signed by the
transferor.
The transferor shall be deemed to remain the holder of the share up
until the time the name of the transferee is registered in the
Register in respect of the share transferred.
49. Insofar as the circumstances permit, the instrument of transfer of a
share shall be drawn up in the form set out below, or in any other
form the Board of Directors may approve (hereinafter: the "Deed of
Transfer").
I _______________, I.D. _______________ of _______________
(hereinafter: the "Transferor"), in consideration for an amount of
NIS _______________ (in words) paid to me by _______________ I.D.
_______________ of _______________ (hereinafter: the "Transferee"),
hereby transfer to the transferee _______________ shares of NIS
_______________ each, marked with the numbers _______________ to
_______________ (inclusive) of a company known as Fundtech Ltd., to
be held by the transferee, the acquires of his rights and his
successors-in title, under all the same conditions under which I
held same prior to the signing of this instrument, and
9
I, the transferee, hereby agree to accept the aforementioned share
in accordance with the above mentioned conditions.
In witness whereof we have hereunto signed this _____ day of _______
20__.
Transferor _______________
Witnesses to Signature _______________
50. The Company may close the transfer registers and the Register for
such period of time as the Board of Directors shall deem fit,
subject to the terms of the Companies Law.
51. Every instrument of transfer shall be submitted to the Office or to
such other place as the Board of Directors shall prescribe, for
purposes of registration, together with the share certificates about
to be transferred, or if no such certificate was issued, together
with the letter of allotment of the shares about to be transferred
(if such letter was issued), and such other proof as the Board of
Directors may demand in regard to the transferor's right of title or
his right to transfer the shares.
The Board of Directors shall have the right to refuse to recognize
an assignment of shares until the appropriate securities under the
circumstances have been provided, as shall be determined by the
Board of Directors in a specific case or from time to time in
general.
Instruments of transfer which are registered shall remain within the
company.
52. Every instrument of transfer shall relate to one class of shares
only, unless the Board of Directors shall otherwise agree.
53. The executors of the will or administrator of a deceased
shareholder's estate (such shareholder not being one of a joint
owners of a share) or, in the absence of an administrator of the
estate or executor of the will, persons having a right as heirs of
the deceased shareholder, shall be entitled to demand that the
Company recognize them as owners of rights in the share. The
provisions of Article 51 above shall apply, mutatis mutandis, also
in regard to this article.
54. In the case of a share registered in the names of two or more
persons, the Company shall recognize only the surviving owners as
persons having rights in the share. However, the aforementioned
shall not be construed as releasing the estate of a deceased joint
shareholder from any and all undertakings in respect of the shares.
Any person who shall become an owner of shares following the death
of a shareholder shall be entitled to be registered as owner of such
shares after having presented to the Company Secretary an
inheritance order or probation order or order of appointment of an
administrator of estate and any other proof as required - if these
are sufficient in the opinion of the Company Secretary - testifying
to such person's right to appear as shareholder in accordance with
these Articles, and which shall testify to his title to such shares.
The provisions of Article 51 above shall apply, mutatis mutandis,
also in regard to this article.
55. The receiver or liquidator of a shareholder who is a company or the
trustee in bankruptcy or the official receiver of a shareholder who
is bankrupt, upon presenting appropriate proof to the satisfaction
of the Company Secretary, that he has the right to appear in this
capacity and which testifies to his title, may, with the consent of
the Board of Directors (the Board of Directors shall not be
obligated to give such consent) be registered as the owner of such
shares. Furthermore, he may assign such shares in accordance with
the rules prescribed in these Articles. The provisions of Article 52
above shall apply, mutatis mutandis, also in regard to this article.
56. A person entitled to be registered as a shareholder following
assignment pursuant to this article shall be entitled, if approved
by the Board of Directors and to the extent and under the conditions
prescribed by the Board of Directors, to dividends and any other
monies paid in respect of the shares, and shall be entitled to give
the Company confirmation of the payments; however, he shall
10
not be entitled to receive notices of General meetings, to be
present or to vote therein or, subject to the provisions of these
Articles, to make use of any rights of shareholders, until he has
been registered as owner of such shares in the Register.
Bearer Share Certificates
-------------------------
57. The Company may issue bearer shares, or exchanges a share
certificate for a bearer share certificate, and accordingly the
Board of directors may, in its discretion, with respect to any share
which is fully paid, on application in writing signed by the person
registered as holder of the share, and authenticated by such
evidence as the Board of Directors, may require for proving the
identity of the person signing the request, and on receiving the
certificate, of the share, and the stamp duty (if any) on the bearer
shares and such fee as the Board of Directors may from time to time
specify, issue a bearer share, stamped with the seal of the Company
and duly stamped, stating that the bearer is the owner of the shares
of dividends, or other moneys, on the shares included in the
certificate.
58. A bearer share certificate shall entitle the bearer to the shares
included in it and such shares shall be transferable by the delivery
of the bearer share, and the provisions of the Articles of the
Company with respect to transfer and transmission of shares shall
not apply to the shares included in the certificate.
59. The bearer of a bearer share shall, on surrender of the bearer share
certificate to the Company for cancellation and on payment of such
sum as the board of Directors may from time to time prescribe, be
entitled to have his name entered as a shareholder in the Register
in respect of the shares included in the certificate.
60. The bearer of a bearer share may at any time deposit the certificate
at the office of the Company, or such other place as the Board of
Directors may prescribe, and so long as the certificate remains so
deposited the depositor shall have the same right to sign a
requisition for calling a General Meeting of the Company, and of
amending and voting and exercising the other privileges of a
shareholder at any General Meeting of the Company, held after
expiration of two days from the time of the deposit, as if his name
were registered in the registrar as the registered holder of the
shares included in the deposited certificate. Not more than one
person shall be recognized as depositor of a particular bearer
share. The Company shall, on two days' written notice return the
deposited bearer share to the depositor.
Unless otherwise expressly provided in these Articles, no person
shall, as bearer of a bearer share, sign a requisition for calling a
meeting of the Company, or attend, or vote, or exercise any other
rights of a shareholder at General Meetings of the Company, but the
bearer of a bearer share shall be entitled in all other respects to
the same privileges and advantages as if he were named in the
Register as the holder of the shares included in the bearer share
certificate, and he shall be a shareholder of the Company.
General Meetings
----------------
61. An Annual General Meeting shall be held at least once in every
calendar year, not later than 15 months after the last Annual
General Meeting, at such time and at such place as the Board of
Directors shall determine.
62. The Board of Directors may call a Special Meeting whenever it sees
fit to do so.
63. The Board of Directors shall be obliged to call a Special Meeting
upon a requisition in writing in accordance with Section 63(b) of
the Law.
11
64.
64.1 The Company shall not be obligated to deliver any notice
pursuant to Section 69(b) of the Law to the shareholders
prior to any general meeting. The Board of Directors
may, from time to time, mail notices of general meetings
in such format as it may decide from time to time
subject to any applicable law.
64.2 Notwithstanding the provisions of article 64.1 above,
the Company shall publish, in a manner determined by the
Board of Directors and subject to the provisions of
Article 139 and any applicable regulations, prior notice
of 7 days with regard to any general meeting, provided
that the Company shall publish prior notice of 21 days
with regard to any Annual Meeting. In counting the days,
the day of publication shall not be counted, but the day
of the meeting shall be counted.
64.3 The notice shall specify (i) the type of meeting, (ii)
the place, the day and the hour of the meeting, (iii)
the issues on the agenda, (iv) a brief summary of the
proposed resolutions, (v) the majority required for the
acceptance of each resolution, (vi) the time on which
the right of a shareholder to vote shall be established
according to Section 182 of the Law (the "record date"),
(vii) arrangements on vote by ballot under the
provisions of Sections 87-89 of the Law, to the extent
relevant, (vii) in the event that the Company has
established that an adjourned meeting shall be held on
such date which is later than the date provided for in
Section 78(b) of the Law, such later date shall be
included in the notice, and (viii) the telephone number
and address of the Company's office and the time on
which a shareholder can review the full text of the
proposed resolutions. The Company may add additional
places for such review including an internet site in
which such shareholder can find, among other things,
drafts of the ballot and Position Papers (as defined in
Section 88 of the Law). The notice shall be given in the
manner prescribed below under the heading "Notices" in
Articles 139 to 142 below.
65. [reserved]
Proceedings at General Meeting
------------------------------
66. No business shall be conducted at a General Meeting unless a quorum
is present, and no resolution shall be passed unless a quorum is
present at the time the resolution is voted in. Except in cases
where it is otherwise stipulated, a quorum shall be constituted when
there are personally present, or represented by proxy or by a
ballot, at least two shareholders who jointly hold at least 331/3%
of the voting rights in the Company.
67. If within half an hour from the time appointed for the meeting, a
quorum is not present, without there being an obligation to notify
the shareholders to that effect, the meeting shall be adjourned to
the same day, in the following week, at the same hour and at the
same place. Unless such day shall fall on a statutory holiday
(either in Israel or in the U.S.A.), in which case the meeting will
be adjourned to the first business day which follows such statutory
holiday.
If at the adjourned meeting there is no quorum, then two
shareholders, personally present, or represented by proxy or ballot,
shall constitute a quorum and shall be entitled to consider and
decide on the matters for which the meeting was called.
12
68. The chairman of the Board of Directors, or any other person
appointed for this purpose by the Board of Directors, shall preside
as chairman of the meeting at every General Meeting. If such person
is not present at such meeting within 15 minutes from the time
appointed for the meeting, the shareholders present at the meeting
shall elect one of their number to serve as chairman of the meeting.
69. Resolutions at the General Meeting shall be passed by a vote. Every
vote at a General Meeting shall be conducted according to the number
of votes to which each shareholder is entitled on the basis of the
number of shares held by him which confer on him a right to vote at
General Meetings.
70. Intentionally Deleted.
71. Intentionally Deleted.
72. The announcement by the chairman that a resolution has been passed
unanimously or by a particular majority, or has been rejected, and a
note recorded to that effect in the Company's minute book, shall
serve as conclusive proof of such fact, and there shall be no
necessity for proving the number of votes or the proportion of votes
given for or against the resolution.
73. The chairman of a General Meeting may adjourn the meeting from time
to time and from place to place if approved by a majority vote, and
he shall be obliged to do so if the meeting, by a majority vote, so
demands, but at an adjourned meeting no other matters be considered
or decided apart from the matters which were on the agenda of the
meeting at which it was decided on the adjournment and in respect of
which no resolution was taken. There shall be no necessity to give
notice in regard to the adjournment or in regard to the matters on
the agenda of the adjourned meeting, unless the adjourned meeting is
to be held more than 21 days after the date of the original meeting.
Votes of Shareholders
---------------------
74. Every shareholder entitled to vote at a General Meeting, who is
personally present or represented by proxy or ballot, shall have one
vote in respect of each Ordinary Share held by him.
75. In the case of joint shareholders, the vote of the senior joint
holder, given personally or by proxy or ballot, shall be accepted,
to the exclusion of the vote of the remaining joint shareholders,
and for these purposes the question as to who is the senior of the
joint shareholders shall be the person amongst the joint holders
whose name appears first in the Register.
76. A shareholder who is legally incapacitated shall vote solely through
his guardian or other person who fulfills the function of such
guardian and who was appointed by a court, and any guardian or other
person as aforesaid shall be entitled to vote by way of a proxy, or
in such manner as the court directs.
77. Any corporation which is a shareholder of the Company shall be
entitled, by way of resolution of its directors or another body
which manages, to appoint such person which it deems fit, whether or
not he is a shareholder of the Company, to act as its representative
at any General Meeting of the Company or at a meeting of a class of
shares in the Company which such corporation is entitled to attend
and to vote thereat, and the appointed as aforesaid shall be
entitled, on behalf of the corporation whom he represents, to
exercise all the same powers and authorities which the corporation
itself could have exercised had it been a natural person shareholder
of the Company.
78. Every shareholder of the Company who is entitled to receive notices
of General Meetings of the Company, and to attend and vote thereat,
shall be entitled to appoint a proxy. A proxy can be
13
appointed by more than one shareholder, and he can vote in different
ways on behalf of each principal.
The instrument appointing a proxy shall be in writing signed by the
person making the appointment or by his authorized representative,
and if the person making the appointment is a corporation, the power
of attorney shall be signed in the manner in which the corporation
signs on documents which bind it, and a certificate of an attorney
with regard to the authority of the signatories to bind the
corporation shall be attached thereto. The proxy need not be a
shareholder of the Company.
79. The instrument appointing a proxy, or a copy thereof certified by an
attorney, shall be lodged at the Office, or at such other place as
the Board of Directors shall specify, not less than 24 hours prior
to the meeting at which the proxy intends to vote on the strength of
such instrument of proxy.
80. Every instrument appointing a proxy, whether for a meeting
specifically indicated, or otherwise, shall, as far as circumstances
permit, be in the following form, or in any other form approved by
the Board of Directors:
I ______________ of ______________ being a shareholder holding
_________ voting shares in Fundtech Ltd., hereby appoint Mr.
______________ of ______________ or failing him, Mr. ______________
or ______________, or failing him, Mr. ______________ of
______________, to vote in my name, place and stead at the
(Annual/Special) Meeting of the Company to be held on the ____ of
______ 20__, and at any adjourned meeting thereof.
In witness whereof I have hereto set my hand on the _____ day of
_____
81. No shareholder shall be entitled to vote at a General Meeting unless
he has paid all the calls and all the amounts due from him, for the
time being, in respect of his shares.
82. A vote given in accordance with the instructions contained in an
instrument appointing a proxy shall be valid notwithstanding the
death of the appointer, or the revocation of the proxy, or the
transfer of the share in respect of which the vote was given as
aforesaid, unless notice in writing of the death, revocation or
transfer is received at the office of the Company, or by the
chairman of the meeting, prior to such vote.
83. A document appointing a proxy shall be valid for every adjourned
meeting of the meeting to which the document relates.
The Board of Directors
----------------------
84.
84.1 Unless otherwise resolved by an Ordinary Resolution of
the General Meeting of the Company, the number of
directors of the Company shall be between 5 and 7. Out
of such directors of the Company, and as long as the
Company remains a "public company" as defined in the
Companies Law, at least two of the directors of the
Company shall be elected as and qualify as External
Directors. At any time the minimum number of directors
shall be not less than 5. Any director shall be eligible
for re-election upon termination of his term of office.
The External Directors shall be eligible for re-election
subject to the provisions of the Companies Law.
84.2 No corporation may serve as a director of the Company
unless it has appointed an individual who is not
disqualified from holding office on its behalf to the
Board of Directors. An individual holding office on its
behalf of a corporation as aforesaid shall
14
be governed by the same duties and obligations which
apply to an officer, without this derogating from the
liability of the corporation on whose behalf such
individual was appointed for such obligations.
85.
85.1 Prior to every Annual Meeting of the Company, the Board
of Directors of the Company shall resolve by a majority
vote the names of between 5 to 7 persons to be proposed
to the shareholders of the Company for election as
directors of the Company until the next Annual Meeting
(hereinafter, the "Panel"). The Panel shall not include
the residing External Directors unless the term of
services of an External Director expires at such Annual
Meeting. Except for the Panel, no candidate for the
office of a director may be proposed at an Annual
Meeting of the Company unless not less than 72 hours and
not more than 42 days prior to the date appointed for
the Annual Meeting, a notice in writing, signed by
shareholders holding at least 10% of the Company's
issued and outstanding shares who are entitled to attend
a meeting in respect of which notice has been sent and
who are entitled to vote thereat, is delivered to the
office of the Company stating that such shareholders
intend to propose 5 to 7 candidates for the office of
directors instead of the Panel proposed by the Board of
Directors (hereinafter: "Alternate Panel(s)").
85.2 The Panel or Alternate Panel(s) shall be elected by an
Ordinary Resolution at every Annual Meeting, for a term
of office which shall end upon the convening of the
first Annual Meeting held after the date of their
election.
85.3 Every director, excluding External Directors, shall hold
office until the end of the next Annual Meeting
following the meeting at which he was elected, unless
his office is vacated in accordance with Article 87
below or Article. If at the Annual Meeting no Panel or
Alternate Panel are elected, the previous directors
shall continue to hold office until the convening of a
General Meeting at which a Panel or Alternate Panel
shall be elected. External Directors of the Company
shall be elected for a fixed period of three years as
set forth in the Companies Law and shall not be subject
to reelection at every Annual Meeting.
85.4 If the office of a member/s of the Board of Directors
(excluding External Directors) shall be vacated, the
remaining members of the Board of Directors shall be
entitled to appoint an additional directors in place of
the director/s whose office has been vacated, for a term
of office according to the remaining period of the term
of office of the director/s whose office has been
vacated. If the office of an External Director shall be
vacated, the Board of Directors shall convene, as
quickly as practical, a general meeting for the purpose
of nominating a new External Director.
86. The directors in their capacity as such shall be entitled to receive
remuneration and expenses incurred within the scope of fulfilling
their functions as directors. The remuneration of the directors
shall be fixed in accordance with the provisions of the Law. The
External Directors shall receive their remuneration in accordance
with the U.S. rules and the Law.
The conditions of the terms of office of members of the Board of
Directors shall be decided by the Board of Directors, but same shall
be valid only if ratified in the manner required under the Law. The
remuneration of directors may be fixed as an overall payment and/or
as a payment in respect of attendance at meetings. In addition to
his remuneration, each director shall be entitled to receive a
refund in respect of his reasonable expenses connected with
performing his functions and services as a director. In any event,
remuneration of External Directors shall be subject to the
provisions of the Companies Law.
15
87.
87.1 Subject to the provisions of the Law with regard to
External Directors, and subject to Article 87.2 below,
the office of a member of the Board of Directors shall
be vacated in any one of the following events:
87.1.1 If he resigns his office by way of a letter
signed by him, lodged at the Office of the
Company.
87.1.2 If he is declared bankrupt.
87.1.3 If he becomes insane or unsound of mind.
87.1.4 On his death, and in the case of a
corporation - upon its winding-up.
87.2 If the office of a member of the Board of Directors
(excluding an External Director) should be vacated, the
remaining members of the Board of Directors shall be
entitled to act for all purposes, for as long as their
number does not fall below the minimum, for the time
being, specified for the directors, as prescribed in
Article 84 above. Should their number drop below the
aforesaid minimum, the directors shall not be entitled
to act, except for the appointment of additional
directors, or for the purpose of calling a general
meeting for the appointment of additional directors, or
for the purpose of calling a general meeting for the
appointment of a new Board of Directors. Should the
number of directors fall below the aforesaid minimum and
no action is undertaken by the Board of Directors within
10 days, then within 2 days thereafter the C.E.O. of the
Company, must call a General Meeting for the purpose of
appointing a new Board of Directors. In the event that
the C.E.O. of the Company does not call a General
Meeting within 2 days, then the Chairman of the Board of
Directors must within 2 days thereafter call a General
Meeting for the Purpose of appointing a new Board of
Directors.
Alternate Directors
-------------------
88.
88.1 Subject to the provisions of the Companies Law, a
Director may, by written notice to the Company, appoint
an alternate for himself (in these Articles referred to
as "Alternate Director"), remove such Alternate Director
and appoint another Alternate Director in place of any
Alternate Director appointed by him whose office has
been vacated for any reason whatsoever. Unless the
appointing Director, by the instrument appointing an
Alternate Director or by written notice to the Company,
limits such appointment to a specified period of time or
restricts it to a specified meeting or action of the
Board of Directors, or otherwise restricts its scope,
the appointment shall be for an indefinite period, and
for all purposes.
88.2 Any notice given to the Company pursuant to Article 88.1
shall become effective on the date fixed therein, or
upon the delivery thereof to the Company, whichever is
later.
88.3 An Alternate Director shall have all the rights and
obligations of the Director who appointed him, provided,
however, that he may not in turn appoint an alternate
for himself (unless the instrument appointing him
otherwise expressly provides), and provided further that
an Alternate Director shall have no standing at any
meeting of the Board of Directors or any committee
thereof while the Director who appointed him is present.
16
88.4 Any natural person, who is not a member of the Board of
Directors or an Alternate Director at that time, may act
as an Alternate Director for a director. One person may
not act as Alternate Director for several directors.
88.5 The office of an Alternate Director shall be vacated
under the circumstances, mutatis mutandis, set forth in
Article 87, and such office shall ipso facto be vacated
if the Director who appointed such Alternate Director
ceases to be a Director.
89.
89.1 Subject to the provisions of any law which may not be
stipulated upon and without derogating from the specific
conditions relating to the appointment of External
Directors as set forth in the Companies Law, a director
shall not be disqualified by virtue of his office from
holding another office in the Company or in any other
company in which the Company is a shareholder or in
which it has any other form of interest, or of entering
into a contract with the Company, either as seller or
buyer or otherwise. Likewise, no contract made by the
Company or on its behalf in which a director has any
form of interest may be attacked and a director shall
not be obliged to account to the Company for any profit
deriving from such office, or resulting from such
contract, merely by virtue of the fact that he serves as
a director or by reason of the fiduciary relationship
thereby created, but such director shall be obliged to
disclose to the Board of Directors the nature of any
such interest at the first opportunity.
A general notice to the effect that a director is a
member of a particular firm or a particular company and
that he must be deemed to have an interest in any
business with such firm or company shall be deemed to be
adequate disclosure for purposes of this article in
relation to such director, and after such general notice
has been given, such director shall not be obliged to
give special notice in relation to any particular
business with such firm or such company.
89.2 Subject to the provisions of the Law and these Articles,
the Company shall be entitled to enter into a
transaction in which an Office Holder therein, as this
term is defined in the Law has a personal interest,
directly or indirectly, and may enter into any contract
or otherwise transact any business with any third party
in which contract or business an Office Holder has a
personal interest, directly or indirectly.
90. The Board of Directors shall elect one or more of its members to
serve as the chairman of the Board of Directors, provided that
nomination of the C.E.O as Chairman of the Board shall be subject to
the provisions of Section 121(c) of the Law. The office of chairman
of the Board of Directors shall be vacated in each of the cases
mentioned in Articles 87.1 above and 91 below.
91. The Company may, by Ordinary Resolution, dismiss any of the elected
directors, prior to the end of his term of office, and it shall be
entitled, by Ordinary Resolution, to appoint another person in his
place as a director of the Company. The above shall not apply to the
dismissal and/or appointment of External Directors which shall be
subject to the provisions of Sections 239 and 246 of the Companies
Law. The person so appointed shall hold such office only for that
period of time during which the director whom he replaces would have
held office.
92. A director shall not be obliged to hold any shares in the Company.
17
C.E.O.
------
93.
93.1 The Board of Directors shall, from time to time, appoint
a C.E.O and subject to the provisions of the Law
delineate his powers and authorities and his
remuneration. The Board of Directors may dismiss the
C.E.O or replace him at any time they deem fit.
93.2 A C.E.O need not be a director or shareholder of the
Company.
All the same provisions with regard to appointment,
resignation and removal from office shall apply to the
C.E.O if he is also a director, as apply to the Elected
Directors. In addition to the matters set forth in
Article 87, where a C.E.O who serves as a director has
ceased to hold one of these offices for any reason
whatsoever, except if he has ceased to hold office of
his own initiative, his appointment to the other office
shall forthwith expire.
93.3 The directors shall be entitled from time to time
delegate to the C.E.O for the time being such of the
powers they have pursuant to these Articles as they deem
appropriate, and they shall be entitled to grant such
powers for such period and for such purposes and on such
conditions and with such restrictions as they deem
expedient, and they shall be entitled to grant such
powers without renouncing the powers and authorities of
the directors in such regard, and they may, from time to
time, revoke, annul and alter such powers and
authorities, in whole or in part.
93.4 Subject to the provisions of the Law, the remuneration
of a C.E.O shall be fixed from time to time by the Board
of Directors and it may be in the form of a fixed salary
or commissions or a participation in profits, or in any
other manner which may be decided by the Board of
Directors.
Proceeding of the Board of Directors
------------------------------------
94.
94.1 The Board of Directors may meet in order to administer
the business and may, subject to the provisions of the
Law, adjourn its meetings and regulate its proceedings
and operations as it deems fit. Without derogating from
the above, as long as the Company is a "public company",
as defined in the Companies Law, the Board of Directors
shall convene at least once every three months. The
Board of Directors may prescribe the quorum required for
the conduct of business. Until otherwise decided a
quorum shall be constituted if a majority of the
directors holding office for the time being are present.
94.2 Should a director or directors be barred from being
present and voting at a meeting of the Board of
Directors by virtue of the contents of Section 278 of
the Law, the quorum shall be a majority of the directors
entitled to be present and to vote at the meeting of the
Board of Directors.
95. Any director, the C.E.O or the auditor of the Company in the event
stipulated in Section 169 of the Law, may, at any time, demand the
convening of a meeting of the Board of Directors. The Secretary
shall be obliged, on such demand, to call such meeting on the date
requested by the director or C.E.O soliciting such a meeting,
provided that proper notice pursuant to Article 96.1 is given.
18
96.
96.1 Every director shall be entitled to receive notice of
meetings of the Board of Directors, and such notice may
be in writing, e-mail or by facsimile or by telegram,
sent to the last address given by the director for
purposes of receiving notices, provided that the notice
shall be given at least the minimum number of days
permitted by applicable law and not less than
forty-eight hours notice; Notwithstanding, the members
of the Board of Directors present at any Board of
Directors meeting and constituting a quorum may waive
such forty-eight hours notice requirement, in which
event such decision shall be reflected in the minutes of
such Board of Directors meeting, and the resolution
adopted at such meeting shall be deemed duly adopted by
the Company.
96.2 Subject to the limitations set forth in the Companies
Law, every director shall be entitled to be present and
to vote through a proxy at any meeting of the directors
or at meetings of a committee of directors, provided
that such proxy is appointed in writing under the
signature of the person who appointed him. Such
appointment may be of a general nature or for purposes
of one meeting or several meetings. A proxy so appointed
shall not be entitled to vote in place of the person who
appointed him at any meeting of the Board of Directors
or of a committee of directors at which the director who
appointed him is himself present, or is represented
thereat by the alternate he himself appointed.
97. Every meeting of the Board of Directors at which a quorum is present
shall have all the powers and authorities vested for the time being
in the Board of Directors.
98. Questions which arise at meetings of the Board of Directors shall be
decided by a simple majority. In the case of an equality of votes of
the Board of Directors, the chairman of the Board of Directors shall
not have a second or casting vote, and the proposal shall be deemed
to be defeated.
If the chairman of the Board of Directors is not present within 30
(thirty) minutes after the time appointed for the meeting, the
directors present shall elect one of their number to preside at such
meeting, subject to the provisions of the Companies Law.
99. For the removal of doubt, it is recorded that subject to the
provisions of the Law, an officer who is a director may be elected
as permanent chairman of the Board of Directors.
100. The Board of Directors may adopt resolutions even without an actual
meeting, on condition that all the Directors entitled to participate
in the deliberations and to vote on the matter brought up for a
decision agreed thereto.
The delivery of the text of the resolution submitted for approval of
the directors without the holding of a meeting of the Board of
Directors shall be done in accordance with those rules which apply
to the giving of notice in regard to the holding of meetings of
directors, as set forth in Article 96 above.
101. The Board of Directors may hold meetings by use of any means of
communication, on condition that all participating directors can
hear each other at the same time. In the case of a resolution passed
by way of telephone calls, a copy thereof shall be sent, as soon as
possible thereafter, to the directors.
General Powers of the Board of Directors
----------------------------------------
102. The administration of the business of the Company shall be in the
hands of the Board of Directors, which shall be entitled to exercise
all the powers and authorities and to perform any act and deed which
the Company is entitled to exercise and to perform in accordance
with its Memorandum of
19
Association and these Articles or according to law, and in respect
of which there is no provision or requirement in these Articles, or
in the Law or/and in the U.S. rules, that same be exercised or done
by the Company in a General Meeting.
103. The Board of Directors may, as it deems fit and subject to any law,
delegate to a committee (hereinafter "Committee of Directors") its
powers and authorities, in whole or in part. The Board of Directors
may, from time to time, widen, curtail or revoke such delegation of
powers and authorities. A Committee of Directors in exercising
powers delegated to it by the Board of Directors shall comply with
all the provisions and conditions prescribed by the Board of
Directors, provided that the curtailment or revocation of powers and
authorities by the Board of Directors shall not invalidate an act
done prior thereto by a Committee of Directors or in accordance with
its instructions, which would have been valid had the powers and
authorities of the Committee of Directors not been altered or
revoked by the Board of Directors. A Committee of Directors may be
comprised of one director or of several directors, and persons who
are not directors may be co-opted to it. As long as the Company is a
public company as defined in the Companies Law, any Committee of
Directors shall include at least one of the Company's External
Directors.
104. The meetings and proceedings of every such Committee of Directors
which is comprised of two or more members shall be conducted in
accordance with the provisions contained in these Articles in regard
to the regulating of the meetings and proceedings of the Board of
Directors to the extent that same are suitable for this, and so long
as no provisions have been made in replacement thereof by the Board
of Directors.
Ratification of Actions
-----------------------
105. All acts done in good faith by the Board of Directors and/or a
Committee of Directors or by a person acting as a member thereof
shall be valid even if it is subsequently discovered that there was
a defect in the appointment of the Board of Directors, the Committee
of Directors or the member, as the case may be, or that the members,
or one of them, was/were disqualified from being appointed as a
director/s or to a Committee of Directors.
106.
106.1 The Board of Directors may ratify any act the
performance of which at the time of the ratification was
within the scope of the authority of the Board of
Directors.
106.2 The General Meeting shall be entitled to ratify any act
done by the Board of Directors and/or any Committee of
Directors without authority, or acting ultra vires, or
which was tainted by some other defect.
106.3 From the time of the ratification, every act ratified as
aforesaid, shall be treated as though lawfully performed
from the outset.
107. The Board of Directors may, from time to time, in its absolute
discretion, borrow or secure any amounts of money required by the
Company for the conduct of its business.
108. The directors shall be entitled to raise or secure the repayment of
an amount obtained by them, in such way and on such conditions and
times as they deem fit. The directors shall be entitled to issue
documents of undertaking - options, debentures or debenture stock,
whether linked or redeemable, convertible debentures or debentures
convertible into other securities, or debentures which carry a right
to purchase shares or to purchase other securities, or any mortgage,
pledge, collateral or other charge over the property of the Company
and its undertaking, in whole or in part, whether present or future,
including the uncalled share capital or the share capital which has
been called but not yet paid.
20
The deeds of undertaking, debentures of various types or other forms
of collateral security may be issued at a discount, at a premium or
otherwise and with such preferential or deferred or other rights, as
the Board of Directors shall, from time to time, decide.
Signing Powers
--------------
109. Subject to any other resolution on the subject passed by the Board
of Directors, the Company shall be bound only pursuant to a document
in writing bearing its seal or its rubber stamp or its printed name,
and the signature of whomever may be authorized by the Board of
Directors, which shall be entitled to empower any person, either
alone or jointly with another, even if he is not a shareholder of
the Company or a director, to sign and act in the name and on behalf
of the Company.
110. The Board of Directors shall be entitled to prescribe separate
signing power in regard to different businesses of the Company and
in respect of the limit of the amounts in respect of which such
persons shall be authorized to sign.
Secretary, Office-bearers, Clerks and Representatives
-----------------------------------------------------
111. The Board of Directors shall be entitled, from time to time, to
appoint a secretary for the Company, as well as office-bearers,
clerks, employees and agents to such permanent, temporary or special
positions, and to specify and change their titles, authorities,
duties, salaries and their bonuses. The Board of Directors shall be
entitled at any time, in its sole and absolute discretion, to
terminate the services of one of more of the foregoing persons.
112. The Board of Directors may from time to time and at any time empower
any person to serve as representative of the Company for such
purposes and with such powers and authorities, instructions and
discretions for such period and subject to such conditions as the
Board of Directors shall deem appropriate. The Board of Directors
may grant such person, inter alia, the power to transfer the
authority, powers and discretions vested in him, in whole or in
part. The Board of Directors may, from time to time, revoke, annul,
vary or change any such power or authority, or all such powers or
authorities collectively.
Dividends, Bonus Shares, Funds and Capitalization of Funds and
--------------------------------------------------------------
Profits
-------
113. The Board of Directors may, prior to recommending any dividend, set
aside out of the profits of the Company such amounts as it deems fit
for a reserve fund for extraordinary purposes or for the
equalization of dividends or for special dividends, or for the
repair, improvement, maintenance or replacement of the property of
the Company, or for any other purpose, as the Board of Directors, in
its sole and absolute discretion, shall deem expedient.
114. The Board of Directors shall be entitled to invest the amounts set
aside as aforesaid in Article 113 above in any investments
whatsoever, as it may deem fit, and from time to time deal with such
investments and vary same, and make use thereof, as it deems fit,
and it may divide the reserve fund into special funds in such manner
as it deems fit, and may utilize a fund or part thereof for the
business of the Company, without being obliged to keep same separate
from the remaining assets of the Company.
115. No dividend shall be paid other than out of the Profits of the
Company as such term is defined in the Law.
116. The Board of Directors may decide on the payment of a dividend or on
the distribution of bonus shares.
21
117. A dividend in cash or bonus shares shall be paid or distributed, as
the case may be, to the holders of the Ordinary Shares registered in
the Register, pro rata to the nominal amount of capital paid up or
credited as paid up on the shares, without reference to any premium
which may have been paid thereon. However an amount paid on account
of a share prior to the payment thereof having been called, or prior
to the due date for payment thereof, and on which the Company is
paying interest, shall not be taken into account for purposes of
this article as an amount paid-up on account of the share.
118. Unless other instructions are given, it shall be permissible to pay
any dividend by way of a check or payment order to be sent by post
to the registered address of the shareholder or the person entitled
thereto, or in the case of joint shareholders being registered, to
the shareholder whose name stands first in the Register in relation
to the joint shareholding. Every such check shall be made in favor
of the person to whom it is sent. A receipt by the person whose
name, on the date of declaration of the dividend, was registered in
the Register as the owner of the shares, or in the case of joint
holders, by one of the joint holders, shall serve as a discharge
with regard to all the payments made in connection with such share.
The directors shall be entitled to invest any dividend which has not
been claimed for a period of one year after having been declared, or
to make use thereof in any other way for the benefit of the Company
until such time as it is claimed. The Company shall not be obliged
to pay interest or linkage in respect of an unclaimed dividend.
119. Unless otherwise specified in the terms of issue of shares or of
securities convertible into shares, or which grant a right to
purchase shares, fully paid-up or credited as paid-up shares at any
time shall confer on their holders the right to participate in the
full dividends and in any other distribution the determining date
for the right to receive same is the date at which the aforesaid
shares were fully paid-up or credited as fully paid-up, as the case
may be, or subsequent to such date.
120. A dividend or other beneficial rights in respect of shares shall not
bear interest.
121. The Board of Directors shall be entitled to deduct from any dividend
or other beneficial rights, all amounts of money which the holder of
the share in respect of which the dividend is payable or in respect
of which the other beneficial rights were given, may owe to the
Company in respect of such share, whether or not the due date for
payment thereof has arrived.
122. The Board of Directors shall be entitled to retain any dividend or
bonus shares or other beneficial rights in respect of a share in
relation to which the Company has a lien, and to utilize any such
amount or the proceeds received from the sale of any bonus shares or
other beneficial rights, for the discharge of the debts or
liabilities in respect of which the Company has a lien.
123. The Board of Directors may decide that the dividend is to be paid in
whole or in part, by way of a distribution of assets of the Company
in kind, including by way of debentures or debenture stock of the
Company, or shares or debentures or debenture stock of any other
company, or in any other way.
124.
124.1 The Board of Directors may, at any time and from time to
time, decide that any portion of the amounts standing
for the time being to the credit of any capital fund
(including a fund created as a result of a revaluation
of the assets of the Company), or which are held by the
Company as profits available for distribution, shall be
capitalized for distribution subject to and in
accordance with the provisions of the Law and of these
Articles, amongst those shareholders who are entitled
thereto and pro rata to their entitlement under these
Articles, provided that same shall not be paid in cash
but shall serve for the
22
payment up in full either at par or with a premium as
prescribed by the Company, of shares which have not yet
been issued or of debentures of the Company which shall
be allotted and distributed amongst the shareholders in
the aforesaid ratio as fully paid-up shares or
debentures.
124.2 The Board of Directors shall be entitled to distribute
bonus shares and to decide that the bonus shares shall
be of the same class which confers on the shareholders
or the persons entitled thereto the right to participate
in the distribution of bonus shares, or may decide that
the bonus shares shall be of a uniform class to be
distributed to each of the shareholders or persons
entitled to shares as aforesaid, without reference to
the class of shares conferring the right to participate
in the distribution on the holder of the share or the
person entitled thereto as aforesaid.
125.
125.1 In every case that the Company issues bonus shares by
way of a capitalization of profits or funds at a time at
which securities issued by the Company are in
circulation and confer on the holders thereof rights to
convert same into shares in the share capital of the
Company, or options to purchase shares in the share
capital of the Company (such rights of conversion or
options shall henceforth be referred to as the
"Rights"), the directors shall be entitled (in a case
that the Rights or part thereof shall not be otherwise
adjusted in accordance with the terms of their issue) to
transfer to a special fund designated for the
distribution of bonus shares in the future (to be called
by any name the directors may decide on and which shall
henceforth be referred to as the "Special Fund") an
amount equivalent to the nominal amount of the share
capital to which some or all of the Rights they would
have received as a result of the issue of bonus shares,
had they exercised their rights prior to the determining
date for the right to receive bonus shares, including
rights to fractions of bonus shares, and in the case of
a second or additional distribution of bonus shares in
respect of which the Company acts pursuant to this
Article, including entitlement stemming from a previous
distribution of bonus shares.
125.2 In the case of the allotment of shares by the Company as
a consequence of the exercise of entitlement by the
owners of shares in those cases in which the directors
have made a transfer to the Special Fund in respect of
the Rights pursuant to sub-article 125.1 above, the
directors shall allot to such shareholder, in addition
to the shares to which he is entitled by virtue of
having exercised his rights, such number of fully
paid-up shares the par value of which is equivalent to
the amount transferred to the Special Fund in respect of
his rights, by way of a capitalization to be done by the
directors of an appropriate amount out of the Special
Fund and the directors shall be entitled to decide on
the manner of dealing with rights to fractions of shares
in their sole discretion.
125.3 If after any transfer to the Special Fund has been made
the rights should lapse, or the period should end for
the exercise of rights in respect of which the transfer
was effected, without such rights being exercised, then
any amount which was transferred to the Special Fund in
respect of the aforesaid unexercised Rights shall be
released from the Special Fund and the Company can deal
with the amount so released in any manner it would have
been entitled to deal therewith had such amount not been
transferred to the Special Fund.
126. For the implementation of any resolution regarding a distribution of
shares or debentures by way of a capitalization of profits as
aforesaid, the directors may:
126.1 Resolve any difficulty which may arise in regard to the
distribution in such manner as they deem fit and may
take all the steps they deem expedient in order to
overcome such difficulty.
23
126.2 Issue certificates in respect of fractions of shares, or
decide that fractions of less than an amount to be
decided by the Board of Directors shall not be taken
into account for purposes of adjusting the rights of the
shareholders or may sell the fractions of shares and pay
the proceeds (net) to the persons entitled thereto.
126.3 To sign or appoint a person to sign on behalf of the
shareholders on any contract or other document which may
be required for purposes of giving effect to the
distribution and in particular they shall be entitled to
sign or appoint a person who shall be entitled to
appoint and submit a contract as referred to in Sections
291 and 292 of the Law.
126.4 To make any arrangement or other scheme which is
required in the opinion of the Board of Directors in
order to facilitate the distribution.
127. The Board of Directors shall be entitled, as it deems appropriate
and expedient, to appoint trustees or nominees for the holders of
bearer share certificates who for a period as prescribed by the
Company, have not applied to the Company to receive dividends,
shares or debentures out of capital, or other benefits, and also for
those registered shareholders who have failed to notify the Company
of a change of their address and who have not applied to the Company
in order to receive dividends, shares or debentures out of capital,
or other benefits during the aforesaid period. Such nominees or
trustees shall be appointed for the use, collection or receipt of
dividends, shares or debentures out of capital and rights to
subscribe for shares which have not yet been issued and which are
offered to the shareholders but they shall not be entitled to
transfer the shares in respect of which they were appointed, or to
vote on the strength thereof. In all the conditions of trust or the
appointment of nominees it shall be stipulated by the company that
on first demand by a holder of a share in respect of which the
trustees or nominees hold office the trustees or the nominees shall
be obliged to return to such shareholder the share in question
and/or all those rights held by them on his behalf (all as the case
may be). Any act and arrangement done by such nominees or trustees
and any agreement between the Board of Directors and nominees or
trustees shall be valid and shall be binding in all respects.
128. The Board of Directors may from time to time prescribe the manner
for payment of dividends or the distribution of bonus shares and the
arrangement connected therewith. Without derogating from the
generality of the foregoing, the Board of Directors shall be
entitled to pay any dividends or moneys in respect of shares by
sending a check via the post to the address of the holder of
registered shares according to the address registered in the
register of shareholders of the Company. Any dispatch of a check as
aforesaid shall be done at the risk of the shareholder.
In those cases in which the Board of Directors specifies the payment
of a dividend, distribution of shares or debentures out of capital,
or the grant of a right to subscribe for shares which have not yet
been issued and which are offered to the shareholders against the
delivery of an appropriate coupon attached to any share certificate,
such payment, distribution or grant of right to subscribe against a
suitable coupon to the holder of such coupon, shall constitute a
discharge of the Company's debt in respect of such operation as
against any person claiming a right to such payment, distribution or
grant of right to subscribe, as the case may be.
129. If two or more persons are registered as joint holder of a share,
each of them shall be entitled to give a valid receipt in respect of
any dividend, share or debenture out of capital, or other moneys, or
benefits, paid or granted in respect of such share.
Books of the Company
--------------------
130. The Board of Directors shall comply with all the provisions of the
Law in regard to the recording of charges and the keeping and
maintaining of a register of directors, register of shareholders and
register of charges.
24
131. Any book, register and record the Company is obliged to keep in
accordance with the Law or in pursuance of these Articles shall be
conducted by recording in regular books, or by technical, mechanical
or other means, as the Board of Directors shall decide.
132. The Company may subject to the provisions of the Law and any other
law, maintain a register or registers of shareholders in any other
country to which the aforesaid provisions apply where shareholders
live in such other country, and may exercise all the powers
mentioned in the Companies Ordinance with regard to such branch
registers.
Books of Account
----------------
133. The Board of Directors shall cause proper books of account in
accordance with the provisions of the Law. The books of account
shall be kept at the Office, or at such other place or places as the
Board of Directors shall deem expedient, and shall at all times be
open to the inspection of members of the Board of Directors. A
shareholder of the Company who is not a member of the Board of
Directors shall not have the right to inspect any books or accounts
or documents of the Company, unless such right has been expressly
granted to him by the Law, or if he has been permitted to do so by
the Board of Directors or by the Company in a General Meeting.
134. The Board of Directors shall from time to time arrange and submit to
the General Meeting a balance sheet and statement of income of the
Company.
A copy of the balance sheet and the statement of income shall be
delivered to the shareholders registered in the Register in the
manner prescribed in regard to the giving of notices, seven days
prior to the meeting.
The provisions of this article shall not make it obligatory to send
a copy of the aforesaid documents to a shareholder whose address is
unknown to the Company, or to more than one joint holder of a share.
Any shareholder to whom a copy of the aforesaid documents is not
sent, and also a person who produces to the Company a certificate
from a bank in Israel to the effect that shares of the Company are
held for him at such bank, shall be entitled to request to receive
copies of such documents at the office of the Company.
135. At least once each year the accounts of the Company and the
correctness of the statement of income and the balance sheet shall
be audited and confirmed by an auditor or auditors.
136. The Company shall, in Annual Meeting, appoint an auditor or auditors
who shall hold such position until the next Annual Meeting, and
their appointment, their remuneration their rights and duties shall
be subject to the provisions of the Law, provided, however, that in
exercising its authority to fix the remuneration of the auditor(s),
the shareholders in Annual Meeting may, by an Ordinary Resolution,
act (and in the absence of any action in connection herewith shall
be deemed to have so acted) to authorize the Board of Directors to
fix such remuneration subject to such criteria or standards, if any,
as may be provided in such Ordinary Resolution, and if no such
criteria or standards are so provided, such remuneration shall be
fixed in an amount commensurate each with the volume and nature of
the services rendered by the auditor(s). By an act appointing such
auditors, the Company may appoint the auditor(s) to serve for a
period of up to the end of completion of the audit of the yearly
financial statement for the three subsequent years.
137. The auditor shall be entitled to receive notices of every General
Meeting of the Company and to attend such meetings and to express
his opinions on all matters pertaining to his function as the
auditor of the Company.
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138. Subject to the provisions of the Law any act done by the auditors of
the Company shall be valid as against any person doing business in
good faith with the Company, notwithstanding any defect in the
appointment or qualification of the auditors.
Notices
-------
139. Subject to any other provisions stated in the U.S. rules or the
Companies Law, the Company shall give notice to its shareholders of
any class by publishing a notice in one daily newspaper, and the
date of publication in the newspaper shall be deemed to be the date
on which the notice was received by the shareholders, or, in its
discretion, as prescribed in Article 64 below.
140. [reserved]
141. [reserved]
142. [reserved]
Reorganization of the Company
-----------------------------
143. On the sale of the Company's undertaking, the directors may, or in
the case of a liquidation, the liquidators may, if authorized to do
so by an Ordinary Resolution of the Company, accept fully or partly
paid-up shares, or securities of another company, Israeli or
foreign, whether in existence at such time or about to be formed in
order to purchase the property of the Company, or part thereof, and
if the profits of the Company so permit, the directors may - or in
the case of a liquidation, the liquidators may - distribute the
aforesaid shares or securities or any other property of the Company
amongst the shareholders without realizing same, or may deposit same
in the hands of trustees for the shareholders, and the General
Meeting by Ordinary Resolution may decide, subject to the provisions
of the Law, on the distribution or allotment of cash, shares or
other securities, or the property of the Company and on the
evaluation of the aforesaid securities or property at such price and
in such manner as the meeting shall decide, and all the shareholders
shall be obliged to accept any valuation or distribution permitted
as aforesaid and to waive their rights in this regard, except in a
case that the Company is about to be wound-up and is in the process
of liquidation to such legal rights (if any) which, according to the
provisions of the Law, may not be changed or modified.
Insurance and Indemnity
-----------------------
144. For purposes of these Articles, the term "Office Holder" shall mean
every Director and every officer of the Company, including, without
limitation, each of the persons defined as "Nosei Misra" in the Law.
145. Subject to the provisions of the Law, the Company shall be entitled
to enter into a contract to insure all or part of the liability of
an Office Holder of the Company, imposed on him in consequence of an
act which he has performed by virtue of being an office holder, in
respect of any of the following:
145.1 The breach of a duty of care to the Company or to any
other person;
145.2 The breach of a fiduciary duty to the Company, provided
that the officer acted in good faith and had reasonable
grounds for believing that the action would not
adversely affect the best interests of the Company;
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145.3 A pecuniary liability imposed on him in favor of any
other person in respect of an act done in his capacity
as an Office Holder.
146.
146.1 The Company may undertake, in advance, to indemnify, or
may indemnify, an Office Holder in respect of, a
liability or expense (as referred to below) that may be
imposed on such Office Holder (due to an act performed
by him in his capacity as an Office Holder): The breach
of a duty of care to the Company or to any other person
that arises from those types of events which the Board
of Directors deems to be foreseeable, and limited to
those amounts determine by the Board of Directors to be
reasonable under the circumstances; or
146.2 that arises from an event that took place prior to the
Company's giving such indemnity;
the liability and expense referred to above are as
follows:
146.3 A pecuniary liability imposed on him in favor of any
other person in terms of a judgment, including a
judgment given in the scope of a compromise or an
arbitrator's ruling which is confirmed by the court, in
respect of an act done by him in his capacity as an
Office Holder of the Company;
146.4 Reasonable costs of litigation, including attorneys'
fees, incurred by the Office Holder, or which he is
ordered by the court to pay in proceedings instituted
against him by the Company, or on its behalf, or by any
other person, or in a criminal indictment in which
judgment is given in his favor or in respect of which he
is acquitted, or in a criminal indictment in which he
was convicted of a felony which does not require proof
of criminal intent, in relation to an act done by him in
his capacity as an Office Holder of the Company.
147. The Company may release exculpate and exempt, in advance, all or
part of an Office Holder's liability to the Company for damage which
arises from the breach of his duty of care to the Company (as such
term is understood by Sections 252 and 253 of the Companies Law).
148. The provisions of these Articles are not intended, and shall not be
interpreted, to restrict the Company in any manner in respect of the
procurement of insurance and/or in respect of indemnification (i) in
connection with any person who is not an Office Holder, including,
without limitation, any employee, agent, consultant or contractor of
the Company who is not an Office Holder, and/or (ii) in connection
with any Office Holder to the extent that such insurance and/or
indemnification is not specifically prohibited under law; provided
that the procurement of any such insurance and/or the provision of
any such indemnification shall be approved by the Board of Directors
or in such manner as may be required by the Companies Law.
Winding-Up
----------
149. Should the Company be wound up and the assets of the Company
available for distribution amongst shareholders be insufficient to
repay all the paid-up capital, such assets shall be divided in a
manner whereby the losses shall, as far as possible, be borne by the
shareholders pro rata to the nominal value of the paid-up capital on
the shares held by each one of them, and if at the time of the
winding-up the property of the Company available for distribution
amongst the shareholders should exceed the amount sufficient for the
repayment of the full nominal value of the paid-up capital at the
time of commencement of the winding-up, the surplus shall be
distributed to the shareholders pro rata to the paid-up capital held
by each of them.
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