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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of November 1998
___________
GENESIS DEVELOPMENT AND CONSTRUCTION LTD.
(Name of registrant)
10 Hashikma Street
Haifa 31700, Israel
(Address of principal executive offices)
___________
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F
----- -----
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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GENESIS DEVELOPMENT AND CONSTRUCTION LTD.
____________________________
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD THURSDAY, DECEMBER 24, 1998 AT 10:00 A.M.
______________________
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Shareholders (the
"Meeting") of Genesis Development and Construction Ltd. (the "Company"), an
Israeli company, will be held at the Company's executive offices, 10 Hashikma
Street, Haifa, Israel, on Thursday, December 24, 1998 at 10:00 a.m. (Israel
time), for the following purposes:
1. To appoint six Directors;
2. Report of management and approval of the audited Financial
Statements of the Company for the year ended December 31,
1997;
3. To re-appoint the Company's auditors and authorize the Board
of Directors to determine their remuneration;
4. To create a new General Managers Stock Option Plan pursuant
to which the Company will be authorized to issue, to such
general managers as may be designated by the Board of
Directors, options to purchase up to 1,000,000 of the
Company's Class A Ordinary Shares;
5. To approve an increase in the number of authorized Class B
Ordinary Shares of the Company from 3,000,000 to 4,200,000
and to approve the grant to the Company's Chairman of the
Board of Directors of an option to purchase up to 1,200,000
of the Company's Class B Ordinary Shares;
6. To approve an employment agreement with the Chairman of the
Board of the Company;
7. To approve fees to be paid to the independent Directors of the
Company; and
8. To transact such other business as may properly be brought
before the Meeting or any adjournment thereof.
Shareholders of record at the close of business on October 9, 1998 are
entitled to notice of and to vote at the Meeting. All shareholders are cordially
invited to attend the Meeting in person or, alternatively, to complete, date,
sign and return the enclosed form of proxy.
This notice is accompanied by the Company's Annual Report for the year
ended December 31, 1997, which is not part of the proxy solicitation material,
copies of which are available for inspection by shareholders at the Company's
executive offices during normal business hours. The proposed corporate
resolutions as to the matters set forth above to be voted upon at the Meeting
are available for inspection by shareholders at the Company's executive offices
during normal business hours.
By Order of the Board of Directors,
YARON YENNI
SECRETARY
November 24, 1998
GENESIS DEVELOPMENT AND CONSTRUCTION LTD.
10 HASHIKMA STREET
HAIFA 31700, ISRAEL
__________________________
PROXY STATEMENT
This Proxy Statement is furnished to the holders of the Company's Class A
Ordinary Shares, NIS 0.1 par value (the "Class A Ordinary Shares"), and Class B
Ordinary Shares, NIS 0.1 par value (the "Class B Ordinary Shares" and, together
with the Class A Ordinary Shares, the "Ordinary Shares"), in connection with the
solicitation by the Board of Directors of proxies for use at the Annual General
Meeting of Shareholders (the "Meeting"), or any adjournment thereof, pursuant to
the accompanying Notice of Annual General Meeting of Shareholders. The Meeting
will be held on Thursday, December 24, 1998 at 10:00 a.m. (Israel time).
The Company had previously scheduled the Meeting to be held on November 9,
1998. However, a clerical error by ADP Investor Communications Services ("ADP")
resulted in a very substantial number of the Company's shareholders not being
mailed the proxy material. The Meeting to be held on December 24, 1998 is a
rescheduling of this previous meeting. ADP has agreed to pay all of the
Company's expenses that have resulted from this clerical error.
It is proposed that the following Ordinary Resolutions be adopted at the
Meeting: (1) appointment of six Directors for the coming year; (2) approval of
the audited Financial Statements of the Company for the year ended December 31,
1997; (3) re-appointment of the Company's auditors and authorization of the
Board of Directors to determine their remuneration; (4) creation of a new
General Managers Stock Option Plan; (5) approval of an increase in the number of
authorized Class B Ordinary Shares of the Company and approval of the grant to
the Company's Chairman of the Board of Directors of an option to purchase Class
B Ordinary Shares; (6) approval of an employment agreement with the Chairman of
the Board of the Company; and (7) approval of fees to be paid to the independent
Directors of the Company.
A form of proxy for use at the Meeting is attached. The completed proxy
should be mailed in the pre-addressed envelope provided. Shareholders may revoke
the authority granted by their execution of proxies at any time before the
exercise thereof by filing with the Company a written notice of revocation or a
duly executed proxy bearing a later date, or by voting in person at the Meeting.
Unless otherwise indicated on the form of proxy, shares represented by any proxy
in the attached form, if the proxy is properly executed and received by the
Company prior to the Meeting, will be voted in favor of all the proposed
Ordinary Resolutions to be presented at the Meeting, as described above.
Proxies for use at the Meeting are being solicited by the Company's Board
of Directors. Only shareholders of record at the close of business on October 9,
1998 will be entitled to vote at the Meeting. Proxies are being mailed to
shareholders on or about November 25, 1998 and will be solicited chiefly by
mail; however, certain officers, Directors, employees and agents of the Company,
none of whom will receive additional compensation therefor, may solicit proxies
by telephone, telegram or other personal contact. The Company will bear the cost
of the solicitation of the proxies, including postage, printing and handling,
and will reimburse the reasonable expenses of brokerage firms and others for
forwarding material to beneficial owners of shares.
As of October 9, 1998, the Company had outstanding 2,361,000 Class A
Ordinary Shares, entitling the holders thereof to one vote per share, and
2,939,000 Class B Ordinary Shares, entitling the holders thereof to five votes
per share. Holders of Class A Ordinary Shares and Class B Ordinary Shares will
vote as a single class on all matters submitted to a vote of the shareholders.
On all matters to come before the Meeting, abstentions and non-votes will not be
considered as votes cast, and will be considered only for purposes of
determining whether a quorum is present at the Meeting. By virtue of voting
agreements, Moshe Schnapp, the Company's President, beneficially possesses
approximately 54% of the aggregate votes that may be cast at the Meeting.
Accordingly, the affirmative vote of Mr. Schnapp alone is sufficient to adopt
proposals 1, 2, 3, 4, 6 and 7. Mr. Schnapp has advised the Company that he will
vote all of his shares in favor of such proposals.
BENEFICIAL OWNERSHIP OF SECURITIES BY
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of October 9, 1998
with respect to the beneficial ownership of the Company's outstanding Ordinary
Shares by (i) any shareholder known to the Company to beneficially own more than
ten percent of such outstanding shares and (ii) the Company's Directors and
officers as a group.
Percentage
of Vote as a
Class A Class B Single
Ordinary Shares Ordinary Shares Class (1)
----------------- --------------------- ---------
Name Number % Number % %
---- ------ - ------ - -
Moshe Schnapp -- -- 1,829,000(2) 62.2 53.6
Eli Aran 15,000(3) * 1,110,000(4) 37.8 32.5
Dashwood International, S.A. -- -- 550,000 18.7 16.1
All Directors and officers as group 73,000(5) 3.0% 2,939,000(2)(4) 100.0 86.2
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* Less than 1%.
(1) For purposes of this calculation, the Class A Ordinary Shares and the
Class B Ordinary Shares are treated as a single class. The Class B Ordinary
Shares are entitled to five votes per share, whereas the Class A Ordinary
Shares are entitled to one vote per share.
(2) Includes 1,200,000 Class B Ordinary Shares held by Ageret Sixteen (93)
Ltd., an Israeli corporation which is owned and controlled by Moshe
Schnapp. Also includes 629,000 Class B Ordinary Shares held by certain of
the Company's other existing shareholders (Dashwood International S.A.
("Dashwood") (550,000 shares) and Allied Capital Services, LLC (79,000
shares)). Mr. Schnapp has sole voting authority over such shares pursuant
to voting agreements and is deemed to beneficially own such shares. Such
voting arrangements will expire upon the earlier to occur of
(i) September 30, 2001 with respect to the Dashwood shares, or October 23,
2001 with respect to the other shares, and (ii) the date on which
Mr. Schnapp ceases to be the chief executive officer of the Company.
(3) Represents shares issuable upon currently exercisable options granted to
non-employee directors of the Company residing in the United States.
(4) Represents 1,110,000 Class B Ordinary Shares held by Mr. Aran as trustee of
a trust for the benefit of his wife, Irit Aran.
(5) Includes (i) 30,000 shares issuable upon currently exercisable options
granted to non-employee directors of the Company residing in the United
States, (ii) 25,000 Class A Ordinary Shares issuable upon exercise of the
redeemable Class A Warrants acquired by Gary J. Strauss in a private
placement completed by the Company in November 1996 and (iii) 13,500 Class
A Ordinary Shares issuable upon exercise of Class A Warrants and Class B
Warrants acquired by Mr. Strauss in the Company's initial public offering
in February 1997.
3
INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
During the initial phases of the Company's operations, Moshe Schnapp, the
Company's President, provided personal guarantees to secure the Company's
obligations to banks for construction loans and guarantees provided by such
banks with respect to projects. At December 31, 1997, the Company had
outstanding indebtedness in the amount of approximately NIS 5,984,000
($1,692,000) which was guaranteed by Mr. Schnapp. Mr. Schnapp has also provided
a personal guarantee with respect to the mortgage on the Company's executive
offices in the amount of NIS 320,000 ($98,000).
In September 1997, the Company sold a 50% interest in Stipula I.B.V.
("Stipula") the Company's Dutch subsidiary through which the Company holds its
interests in its Rassnitz and Moscow construction projects, to Shay Bar Real
Estate Investments ("Shay Bar"). Yaron Yenni, a director of the Company and its
Chief Financial Officer and Secretary, has served as a director of Shay Bar
since August 1997 and is the owner of 10.15% of its outstanding share capital.
His father, David Yenni, is chairman and the chief executive officer of Shay Bar
and is the owner of 17.20% of its outstanding share capital. Shay Bar paid
$3,300,000 for its interest, of which $1,800,000 was paid in September 1997,
$750,000 was paid in April 1998 and the balance of $750,000 is due in December
1998.
In June 1997, the Company agreed to sell a 54.9% limited partnership
interest in its Rehovot construction project to a group of individual investors,
which included the Company's Chairman, Eli Aran. Mr. Aran acquired a 3.2%
indirect interest in the project for total consideration of $350,000. Mr. Aran
paid $58,334 and delivered a promissory note in the principal amount of $175,000
on October 14, 1997 and paid the balance of $116,666 on December 31, 1997. The
promissory note bears interest at an annual rate of 8.5% and is payable on
December 31, 2003.
In November 1996, Gary J. Strauss, a director of the Company, purchased
$50,000 principal amount of bridge notes and 25,000 bridge warrants in the
Company's November 1996 private placement. The bridge notes were repaid in full
with the proceeds of the Company's initial public offering (the "IPO"), and the
bridge warrants were exchanged on the closing of the IPO for an equal number of
the Company's redeemable Class A Warrants.
In December 1995, Dashwood, a principal shareholder of the Company,
purchased 600,000 Class B Ordinary Shares for a purchase price of $200,000 and
made a no-interest loan to the Company in the principal amount of $300,000. Such
loan, which was payable on June 30, 1997, was repaid out of the proceeds of the
IPO. Under the original terms of such indebtedness to Dashwood, Dashwood had the
option to convert such indebtedness into additional Class B Ordinary Shares
representing 20% of the outstanding Ordinary Shares of the Company. In
September 1996, the Company and Dashwood entered into an agreement providing
that such option could not be exercised until the maturity date of the loan, and
the option was canceled upon the completion of the IPO. Pursuant to the
agreement, Dashwood granted Moshe Schnapp the sole right to vote all of its
Class B Ordinary Shares until the earlier of September 30, 2001 or the cessation
of Mr. Schnapp to act as chief executive officer of the Company. In addition,
Dashwood has granted Mr. Schnapp a right of first refusal with respect to any
transfer of such Class B Ordinary Shares during such period. Pursuant to such
right of first refusal, Mr. Schnapp will be entitled to purchase from Dashwood
for a 30-day period after the giving of notice by Dashwood, any shares proposed
to be sold by Dashwood. Pursuant to the agreement, any proposed transfer of
shares by Dashwood must be on an arms-length basis and for fair value.
4
ITEM 1 - APPOINTMENT OF DIRECTORS
Article 60 of the Company's Articles of Association provides that the
Company shall have three or more Directors as determined by the Board. The
number of Directors is now fixed at six. Management recommends that the
following six nominees be appointed to the Board of Directors at the Meeting.
Eli Aran, a founder of the Company, has served as a Director of the Company
since the commencement of its operations in July 1995 and as the Chairman of the
Board since November 1997. Mr. Aran has also served as a director and the
President of Genesis Development and Construction, Inc., the Company's United
States subsidiary, since its formation in February 1997. In addition, Mr. Aran
serves as the managing director of Genesis Europe S.P.R.L., the Company's
Belgian subsidiary, and serves as a director of A.B. Stone B.V. and Stipula, the
Company's Dutch subsidiaries. Since March 1991, Mr. Aran has served as the Vice
President of Apollon Contractors International, a United States real estate
development and construction company with Israeli and other international
operations, with headquarters in New York City. From March 1991 to May 1994,
Mr. Aran was the manager of Enpollon and Company, L.P., a real estate
development and construction company with operations in Israel. During such
time, Mr. Aran also served as a director of Hatishbe A.L. Holdings Ltd., a
developer of a commercial shopping center in Israel.
Moshe Schnapp, a founder of the Company, has served as the Company's
President, Chief Executive Officer and a Director since the commencement of its
operations in July 1995. Mr. Schnapp also served as the Chairman of the Board
until November 1997. From October 1992 to June 1995, Mr. Schnapp served as the
Chief Executive Officer of The Engel Group ("Engel"), an Israeli real estate
development and construction company, and served as the Chief Financial Officer
and a director of Engel from September 1990 to November 1992. Mr. Schnapp is
also a director for other inactive Israeli companies.
Yaron Yenni has served as the Company's Chief Financial Officer and
Secretary since October 1996. Mr. Yenni has also served as a Director of the
Company from October 1996 to January 1998 and since May 1998. In January 1998
Mr. Yenni was appointed chief executive officer of Genesis Construction
Performance (94) Ltd., a subsidiary of the Company. Mr. Yenni has served as a
director of Shay Bar Real Estate Investments Ltd., an Israeli public company
trading on the Tel Aviv Stock Exchange, since August 1997 and is a director of
Credit Lines Financial Services Ltd. Mr. Yenni served as a director of Engel
from November 1992 until December 1997, and from January 1995 to February 1997
he served as a director of Baumel Moshe & Sons Ltd. Mr. Yenni, a certified
public accountant, served as Internal Auditor for Mirage Development Israel Ltd.
from March 1993 to October 1996. In addition, he served as an independent
financial consultant for various Israeli companies until October 1996.
Shalom Rozenberg has served as a Director of the Company since
January 1997. Since June 1997 Mr. Rozenberg has served as an independent
consultant to Carmel Container Systems Limited, an Israeli packing company
trading on the American Stock Exchange, and until November 1994 served as its
manager of sales, marketing and development in its industrial and agricultural
divisions. From April 1987 to October 1994, Mr. Rozenberg was a marketing
manager at Molet Hogla, an Israeli chemicals company, with responsibility for
northern Israel and chain stores throughout Israel.
Gary J. Strauss has served as a Director of the Company since January 1997.
Mr. Strauss has been engaged in the practice of real estate law in the New York
City area for approximately 18 years. Mr. Strauss's areas of practice include
real estate financing, leasing and acquisitions. Mr. Strauss has been a sole
practitioner for more than the past five years.
Ron Berant is a new nominee to the Board of Directors. Mr. Berant has been
engaged in the practice of real estate and commercial law in Haifa, Israel for
approximately seven years. Mr. Berant is also a director of Shay Bar Real
Estate Investments Ltd. and Credit Lines Financial Services Ltd.
It is the intention of the persons appointed as proxies in the accompanying
proxy to vote FOR the election of the nominees named above as Directors unless
specifically instructed to the contrary. Should any nominee become available for
election to the Board of Directors at the Meeting, the persons appointed as
proxies will have discretionary authority in that instance to vote the proxy for
a substitute. Management knows of no current circumstances that would render any
nominee named herein unable to accept nomination or election.
5
ITEM 2 - REPORT OF MANAGEMENT AND THE
APPROVAL OF AUDITED FINANCIAL STATEMENTS
OF THE COMPANY FOR THE YEAR ENDED DECEMBER 31, 1997
The Company's Annual Report for the year ended December 31, 1997 is being
mailed to the Company's shareholders together with this Proxy Statement, but is
not part of the proxy solicitation material. The Company's audited Financial
Statements for the year ended December 31, 1997 are included in such report.
At the Meeting, Company management will report on the 1997 financial
results. It is proposed that the following Ordinary Resolution be adopted at the
Meeting:
"RESOLVED, that the audited Financial Statements of the Company
for the year ended December 31, 1997 be, and the same hereby are,
approved."
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 approval of
the Ordinary Resolution relating to the audited Financial Statements. THE BOARD
OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" APPROVAL OF THE
COMPANY'S AUDITED FINANCIAL STATEMENTS.
ITEM 3 - RE-APPOINTMENT OF AUDITORS AND AUTHORIZATION
OF THE BOARD OF DIRECTORS TO DETERMINE THEIR REMUNERATION
The Board of Directors has appointed the accounting firm of Kost Levary &
Gabbay (formerly Kost Levary & Forer), a member of Ernst & Young International,
as the auditors of the Company for the year ending December 31, 1998. Kost
Levary & Gabbay has audited the Company's books and accounts since its
inception.
It is proposed that the following Ordinary Resolution be adopted at the
Meeting:
"RESOLVED, that the appointment of Kost Levary & Gabbay as the
Company's auditors for the fiscal year ending December 31, 1998
be, and it hereby is, approved, and that the Board of Directors
be, and it hereby is, authorized to fix the remuneration of such
auditors in accordance with the volume and nature of their
services."
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 approval of
the Ordinary Resolution relating to the re-appointment of the Company's auditors
and the authorization of the Board of Directors to determine their remuneration.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
RE-APPOINTMENT OF THE COMPANY'S AUDITORS AND THE AUTHORIZATION OF THE BOARD OF
DIRECTORS TO DETERMINE THEIR REMUNERATION.
ITEM 4 - PROPOSAL TO CREATE A
NEW GENERAL MANAGERS STOCK OPTION PLAN
On October 15, 1998, the Board of Directors of the Company adopted a
General Managers Stock Option Plan (the "GMSO Plan"), subject to shareholder
approval, pursuant to which 1,000,000 Class A Ordinary Shares were reserved for
issuance upon the exercise of options to be granted to general managers of the
Company and its subsidiaries. No options may be granted under the GMSO Plan to
Eli Aran and Moshe Schnapp. The Board of Directors expects to establish an
option committee to administer the GMSO Plan. If and when established, such
committee will be empowered, among other things, to designate the optionees,
dates of grant and the exercise prices of options; provided, however, that such
exercise price may not be less than 70% of the average closing price, as
reported by The Nasdaq Stock Market, Inc. ("Nasdaq"), of the Class A Ordinary
Shares during the 90 calendar days prior to the date of grant. The Board
believes that option grants under the GMSO Plan will play an important role in
the Company's efforts to attract, employ and retain general managers of
outstanding ability. To date, no options have been granted under the GMSO Plan.
6
A copy of the GMSO Plan will be furnished by the Company to any shareholder
upon written request to the Chief Financial Officer at the Company's executive
offices.
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 approval of
the Ordinary Resolution relating to the establishment of the GMSO Plan and the
reservation of 1,000,000 Class A Ordinary Shares for issuance pursuant to
options to be granted thereunder. THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE "FOR" THE ESTABLISHMENT OF THE GMSO PLAN.
ITEM 5 - PROPOSAL TO AUTHORIZE
1,200,000 ADDITIONAL CLASS B ORDINARY SHARES AND GRANT TO THE
CHAIRMAN OF THE BOARD AN OPTION TO PURCHASE 1,200,000 CLASS B ORDINARY SHARES
On October 15, 1998, the Board of Directors adopted, subject to shareholder
approval, an amendment to Article 4.1 of the Company's Articles of Association
increasing the number of authorized Class B Ordinary Shares from 3,000,000 to
4,200,000 shares (the "Authorized Stock Amendment").
As of October 9, 1998, the Company had 45,000,000 Ordinary Shares
authorized, of which 42,000,000 were designated Class A Ordinary Shares and
3,000,000 were designated Class B Ordinary Shares. Of the 42,000,000 authorized
Class A Ordinary Shares, 2,361,000 were issued and outstanding; of the 3,000,000
authorized Class B Ordinary Shares, 2,939,000 were issued and outstanding. Each
Class A Ordinary Share is entitled to one vote and each Class B Ordinary Share
is entitled to five votes.
On November 16, 1998, the Company's Board of Directors granted, subject to
shareholder approval, a three-year option to Eli Aran, the Company's Chairman of
the Board, to purchase from time to time up to 1,200,000 of the Company's Class
B Ordinary Shares. Such options will be immediately exercisable at U.S. $2.875
per share, which was the most recent closing price of the Class A Ordinary
Shares, as reported by Nasdaq, on the date of grant. Such options shall
terminate prior to the end of the three-year term upon Mr. Aran's ceasing to be
involved in the operations of the Company.
The affirmative vote of the holders of 75% of the voting power represented
at the Meeting in person or by proxy is necessary for approval of the Ordinary
Resolution relating to the Authorized Stock Amendment and the grant of the
above-described option to the Company's Chairman of the Board. SUCH APPROVAL
REQUIRES THAT AT LEAST ONE-THIRD OF THE VOTING POWER REPRESENTED AT THE MEETING
IN PERSON OR BY PROXY, WHICH IS HELD BY NON-INTERESTED SHAREHOLDERS, VOTE IN
FAVOR OF SUCH PROPOSAL. THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" THE AUTHORIZED STOCK AMENDMENT AND THE GRANT OF THE ABOVE-DESCRIBED
OPTION TO THE COMPANY'S CHAIRMAN OF THE BOARD.
ITEM 6 -PROPOSAL TO APPROVE AN EMPLOYMENT AGREEMENT
WITH THE CHAIRMAN OF THE BOARD OF THE COMPANY
The Company is subject to the provisions of Israel's Companies Ordinance
[New Version], 1983, as amended. Pursuant to the Companies Ordinance and Article
62 of the Company's Articles of Association, the payment of compensation to
Directors requires shareholder approval. Eli Aran is a Director of the Company
and is also the Company's Chairman of the Board.
In recognition of the contribution by Mr. Aran to the Company's
performance, the Company's Board of Directors has approved a five year
employment agreement with Eli Aran. Such employment agreement provides, among
other things, for a salary of U.S. $350,000 per year, for incentive compensation
of U.S. $50,000 for each U.S. $1,000,000 of net income of the Company for each
fiscal year of the contract term and for additional compensation upon a change
of control of the Company if the Company ceases to use Mr. Aran's services as
specified in the employment agreement. It is therefore proposed that the
shareholders approve the employment agreement with Mr. Aran (who is also a
Director) for his service as an officer.
7
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 approval of
the Ordinary Resolution relating to the employment agreement with Mr. Aran. SUCH
APPROVAL REQUIRES THAT AT LEAST ONE-THIRD OF THE VOTING POWER REPRESENTED AT THE
MEETING IN PERSON OR BY PROXY, WHICH IS HELD BY NON-INTERESTED SHAREHOLDERS,
VOTE IN FAVOR OF SUCH PROPOSAL. THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE "FOR" APPROVAL OF THE PROPOSAL RELATING TO COMPENSATION OF
OFFICERS WHO ARE ALSO DIRECTORS OF THE COMPANY AND THE PAYMENT OF FEES TO
OUTSIDE DIRECTORS.
ITEM 7 -PROPOSAL TO APPROVE FEES TO BE PAID
TO THE INDEPENDENT DIRECTORS OF THE COMPANY
As stated above, the Companies Ordinance and Article 62 of the Company's
Articles of Association require that the payment of compensation to Directors be
approved by the Company's shareholders. The Company's Board of Directors has
approved the payment of fees to the Company's independent Directors. It is
therefore proposed that the shareholders approve the fees to be paid to the
independent Directors, in the amounts to be presented at the Meeting, as
approved by the Company's Board of Directors.
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 approval of
the Ordinary Resolution relating to the fees to be paid to the independent
Directors of the Company. THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE "FOR" APPROVAL OF THE PROPOSAL RELATING TO THE FEES TO BE PAID
TO THE INDEPENDENT DIRECTORS OF THE COMPANY.
OTHER BUSINESS
Management knows of no other business to be transacted at the Meeting;
however, if any other matters are properly presented before the Meeting, the
person named in the enclosed form of proxy will vote upon such matters in
accordance with their best judgment.
November 24, 1998 By Order of the Board of Directors,
YARON YENNI
SECRETARY
8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GENESIS DEVELOPMENT AND CONSTRUCTION LTD.
By: /s/ Eli Aran
----------------------
Name: Eli Aran
Title: Chairman
Date: December 2, 1998