SAPIENS INTERNATIONAL CORPORATION N.V.
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
August 26, 2004
Notice is hereby given that the Annual General Meeting of Shareholders (the
"Meeting") of Sapiens International Corporation N.V. (the "Company") will be
held at the registered offices of the Company at Landhuis Joonchi Kaya Richard
J. Beaujon z/n, Curacao, Netherlands Antilles, on August 26, 2004 at 10:00 am
(Curacao time), for the following purposes:
1. To approve the Board of Directors' annual report on the management
of the business of the Company for the year ended December 31, 2003.
2. To adopt the Company's Consolidated Balance Sheet as of December
31, 2003 and the related Consolidated Statements of Operations (profit
and loss account) and Cash Flows for the year then ended.
3. To approve the discharge of the Board of Directors for the
management of the affairs of the Company for the year ended December
31, 2003.
4. To elect the following slate of nominees to the Board of Directors
of the Company to serve as directors of the Company until the next
annual general meeting of shareholders of the Company: Ron Zuckerman,
Dan Goldstein, Gad Goldstein, Naamit Salomon, Yeoshua Agassi, Yocheved
Dvir, Rammy Ringel, Yitzhak Sharir and MeesPierson Intertrust
(Curacao) N.V.
5. To approve the appointment of Kost Forer Gabbay & Kasierer, a
Member of Ernst & Young Global, as independent auditors to audit the
accounts of the Company for the year ending December 31, 2004.
6. To resolve to amend the Articles of Association of the Company in
order to (a) increase the number of authorized common shares to
30,000,000 and to change the par value of all authorized shares to
one Eurocent ([euro] 0.01) each, such that the total nominal capital
of the Company will be [euro] 310,000, (b) effect certain other
changes in order that the Articles of Association conform to the new
Civil Code of the Netherlands Antilles and (c) have the original
Articles of Association read in English. These amendments to the
Company's Articles of Association will be in the form drawn up by
the office of STvB Advocaten (Europe) N.V. ("STvB") and will be
referred to herein as the "Articles Amendment." An outline
indicating textual changes from the current Articles of Association
under the Articles Amendment is attached to the Proxy Statement
accompanying this Notice as Annex A. The verbatim text of the
Articles Amendment is available for review by the shareholders at
the offices of the Company from the date of this notice until the
end of the Meeting. In addition, the shareholders are asked to
authorize each of the lawyers and candidate notaries of STvB, acting
jointly as well as separately, to effect the Articles Amendment by
passing the deed of amendment before a civil law notary and
furthermore to do everything which might be found necessary, all
this with the right of substitution, to complete the amendment of
the Articles of Association in accordance with the Articles
Amendment.
7. To approve an amendment of the Company's stock option plans in
order to increase the aggregate number of common shares reserved for
such plans.
8. To transact such other business and to take action upon such other
matters as may properly come before the Meeting or any adjournment
thereof.
The close of business on July 8, 2004 has been fixed as the record date
of the Meeting. All shareholders of record at such time are entitled to notice
of, and to vote at, the Meeting.
Shareholders who do not expect to attend the Meeting in person are
requested to mark, date, sign and mail the enclosed proxy as promptly as
possible in the enclosed stamped envelope.
By Order of the Board of Directors
Norman Kotler
General Counsel and Corporate Secretary
Curacao, Netherlands Antilles
July 19, 2004
PROXY STATEMENT
-------------------------
Sapiens International Corporation N.V.
Landhuis Joonchi
Kaya Richard J. Beaujon z/n
Curacao, Netherlands Antilles
ANNUAL GENERAL MEETING OF SHAREHOLDERS
August 26, 2004
This Proxy Statement is being furnished in connection with the
solicitations by the board of directors (the "Board of Directors") of Sapiens
International Corporation N.V. (the "Company") of proxies for use at the
Company's Annual General Meeting of Shareholders (the "Meeting") to be held on
August 26, 2004, or at any adjournment thereof. Business at the Meeting is
conducted in accordance with the procedures determined by the presiding officer
and is generally limited to matters promptly brought before the Meeting by or at
the request of the Board of Directors or its Chairman.
The Company's Annual Report to Shareholders for the year ended December 31,
2003 (the "Annual Report") is enclosed herewith. The Company's Consolidated
Balance Sheet as of December 31, 2003, and the related Consolidated Statements
of Operations (profit and loss account) and Cash Flows for the year ended
December 31, 2003, are included in the Annual Report.
VOTING PROCEDURE
Each Shareholder of record at the close of business on July 8, 2004 is
entitled to notice of, and to vote at, the Meeting. Each Common Share held by
such a Shareholder of record is entitled to one vote for each matter to be voted
on at the Meeting. The Articles of Incorporation of the Company state that no
action may be taken at any General Meeting of Shareholders unless a quorum
consisting of the holders of at least one-half of the outstanding shares having
voting rights are present at such meeting in person or represented by proxy. If
a quorum is not present in person or represented by proxy in any such meeting, a
second general meeting shall be called to be held within two months, at which
second meeting the quorum requirements shall not apply. Each resolution proposed
at the Meeting requires the affirmative vote of Shareholders present in person
or represented by proxy and holding Common Shares amounting in the aggregate to
at least a majority of the votes actually cast with respect to such resolution.
Shares cannot be voted at the meeting unless the owner of record is present
in person or represented by proxy. The Company is incorporated in the
Netherlands Antilles and, as required by the laws thereof and the Company's
Articles of Incorporation, general meetings of shareholders must be held in
Curacao where the Company is established. The enclosed proxy card is a means by
which a Shareholder may authorize the voting of shares at the Meeting. It may be
revoked at any time by written notice to the Secretary of the Company before it
is voted. If it is not revoked, the shares represented will be voted in
accordance with the proxy. Proxies for use at the meeting are being solicited by
the Company's Board of Directors. Proxies are being mailed to Shareholders on or
about July 19, 2004 and will be solicited chiefly by mail; however, certain
officers, Directors, employees and agents of the Company, none of whom will
receive additional compensation therefore, may solicit proxies by telephone,
telegram or by other personal contacts. 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.
On July 8, 2004 there were 11,743,935 Common Shares (par value 2.30 Euro
per share) of the Company outstanding and entitled to vote.
AGENDA ITEMS
1. Annual Report of Management
The Board of Directors' Annual Report on the management of the business of
the Company for the year ended December 31, 2003, which is enclosed herewith, is
submitted to the Shareholders' vote pursuant to the laws of the Netherlands
Antilles.
A majority of the votes cast is required for the approval of the Board of
Directors' Annual Report.
The Board of Directors Recommends a Vote FOR Item 1
2. Financial Statements
The Company's Consolidated Balance Sheet as of December 31, 2003 and
related Consolidated Statements of Operations (profit and loss account) and Cash
Flows for the year ended December 31, 2003, are submitted to the Shareholders
pursuant to the laws of the Netherlands Antilles and the Articles of
Incorporation the Company adopted in conformity therewith.
A majority of the votes cast is required for the approval and adoption of
the financial results as set forth in such financial statements.
The Board of Directors Recommends a Vote FOR Item 2
3. Discharge of Board of Directors
The discharge of the Board of Directors for the management of the affairs
of the Company for the year ended December 31, 2003, is submitted to the
Shareholders.
A majority of the votes cast is required for the discharge of the Board of
Directors for the management of the affairs of the Company.
The Board of Directors Recommends a Vote FOR Item 3
4. Election of Board of Directors
The slate of nominees for election to the Board of Directors of the
Company, Ron Zuckerman, Dan Goldstein, Gad Goldstein, Naamit Salomon, Yeoshua
Agassi, Yocheved Dvir, Rammy Ringel, Yitzhak Sharir and MeesPierson Intertrust
(Curacao) N.V., is submitted to the Shareholders for election to serve as
directors of the Company until the next annual general meeting of shareholders
of the Company.
Please consider the following information regarding the individuals who
will comprise the Company's Board of Directors assuming election of the 9
nominees.
Ron Zuckerman has served as a director of the Company since 1991 and
assumed the position of Chairman of the Board of Directors in January 1998. He
served as Chief Executive Officer of the Company from January 1995 until March
31, 2000. Mr. Zuckerman served as Chief Operating Officer of the Company from
its incorporation until April 1994.
Dan Goldstein has served as a director of the Company since March 2001.
Mr. Goldstein has served as Chairman of the Board and Chief Executive Officer
of Formula Systems (1985) Ltd. ("Formula") since January 1985. Mr. Goldstein is
also Chairman of the Board or a director of other companies which are
subsidiaries and affiliates of Formula (such companies, together with Formula,
to be referred to as the "Formula Group"), including but not limited to
BluePhoenix Solutions Ltd. ("BluePhoenix"), Magic Software Enterprises Ltd.
("Magic"), Matrix IT Ltd. ("Matrix") and Formula Vision Technologies (F.V.T.)
Ltd. ("Formula Vision").
Gad Goldstein has served as a director of the Company since July 2002. Mr.
Goldstein has been President of Formula since 1995 and a director of Formula
since 1985. Between 1985 and 1995, Mr. Goldstein was Vice President of Formula.
In addition, Mr. Goldstein is Chairman of the Board of BluePhoenix and serves
as a director of other companies in the Formula Group, including but not
limited to Magic, Matrix and Formula Vision. Gad Goldstein is the brother of
Dan Goldstein.
2
Naamit Salomon has served as a director of the Company since September
2003. Ms. Salomon has been Vice President, Finance of Formula since 1997 and
also serves as a director of Magic. From 1990 through August 1997, Ms. Salomon
was a controller of two large, privately held companies in the Formula Group.
Yeoshua Agassi has served as a director of the Company since September
2003. From 2001 to 2003, he served as President and Chief Executive Officer of
Scitex Corporation Ltd. and in parallel, as Executive Vice President of Clal
Industries and Investments Ltd. Prior to that, Mr. Agassi served as General
Manager of Leumicard Ltd. From 1993 to 1998 Mr. Agassi served as General Manager
for the Israel Direct Insurance Company (IDI) which he co-founded. Mr. Agassi
served as Vice President at the Hamagen Insurance Company from 1987 to 1993 and
Vice President at the Phoenix Assurance Company from 1983 to 1987.
Yocheved (Yochi) Dvir has served as a director of the Company since
September 2003. Ms. Dvir has been an independent strategic consultant to various
projects since August 2002. Prior to then she was a Senior Vice President of the
Migdal Group, one of Israel's foremost insurance groups, since 1992. She joined
the Migdal Group in 1981 and held a number of senior financial and management
positions, including Head of the Economics Department from 1986 to 1988, Head of
the Corporate Office from 1989 to 1992, Head of the General Insurance Division
and Corporate Office from 1993 to 1997, Head of the Finance Division (chief
financial officer) from 1997 to November 1999 and Head of the group's Strategic
Development Division and Marketing Array and a Risk Manager from November 1999
to July 2000. Ms. Dvir serves on the boards of directors of a number of Israeli
companies including Menorah Insurance Company Ltd., Elite Industries Ltd. and
ECI Telecom Ltd.
Rammy Ringel has served as a director of the Company since September 2003.
Mr. Ringel is a Managing Director of Trigger Consulting Ltd. ("Trigger"), a
management consulting firm specializing in business strategy, business
development and mergers and acquisitions in international markets. Mr. Ringel
co-founded Trigger in 1995. From 1987 to 1995, he worked as a consultant and
then partner at Shaldor Ltd., an Israeli strategic management consulting firm.
From 1984 to 1986, Mr. Ringel was employed as a software engineer by Israeli
Aircraft Industries.
Yitzhak Sharir has served as a director of the Company since July 2002. Mr.
Sharir joined the Company as Chief Executive Officer in November 2000. From 1994
to 2000, Mr. Sharir served as General Manager of Nilit Industries. Prior to
joining Nilit, Mr. Sharir served as President & CEO of Orlite Industries from
1990 through 1994. Mr. Sharir also served as Executive Vice President and
General Manager of Oshap Technologies (1985-1989), Vice President Technology of
Urdan Industries (1983-1985), and manager of engineering teams at Israel
Aircraft Industries and Israel's Nuclear Research Center.
MeesPierson Intertrust (Curacao) N.V. is a corporate body organized and
existing under the laws of the Netherlands Antilles. It and its predecessors,
most recently Intertrust (Curacao) N.V., have provided the Company with
corporate-related services since April 1990, including but not limited to
serving in the past as the Company's transfer agent and registrar, maintaining
the corporate-related records of the Company, and filing various corporate
documents with the governmental authorities in the Netherlands Antilles.
A majority of the votes cast is required for the election of the Board of
Directors.
The Board of Directors Recommends a Vote FOR Item 4
5. Appointment of Auditors
Kost Forer Gabbay & Kasierer, a Member of Ernst & Young Global, has been
selected by the Board of Directors as independent auditors to audit the accounts
of the Company for the year 2004.
A majority of the votes cast is required for the approval of the
appointment of Kost Forer Gabbay & Kasierer as independent auditors to audit the
accounts of the Company for the year 2004.
The Board of Directors Recommends a Vote FOR Item 5
6. Amendment of the Company's Articles of Association
The Company wishes to amend its Articles of Association for two reasons:
First, the Company wishes to change its nominal capital (formerly referred
to as authorized capital) in order to give the Company the flexibility (i) to
issue additional shares for business or financing opportunities which may arise
and (ii) to create additional reserves of shares if necessary. Currently, the
maximum nominal capital of the
3
Company is [euro] 48,300,000, divided into (a) 20,000,000 common shares with a
par value of [euro] 2.30 each and (b) 1,000,000 preferred shares with a par
value of [euro] 2.30 each. The Company wishes to increase the number of
authorized common shares to 30,000,000 and to change the par value of all
authorized shares to one Eurocent ([euro] 0.01) each, such that the total
nominal capital of the Company will be [euro] 310,000.
Second, the legislature of the Netherlands Antilles introduced a new Book 2
of the Civil Code (legal entities) which became effective on March 1, 2004. The
Company has been advised that in order that the Articles of Association conform
to the new law, it is desirable to make certain changes in the Articles.
Furthermore, under the new law the Articles of Association may be drawn up in
the English language, and the Company has been advised that it should take
advantage of this new opportunity.
An outline indicating textual changes of the proposed amended Articles of
Association (the "Articles Amendment") from the current Articles of Association
is attached to this Proxy Statement as Annex A. The verbatim text of the
Articles Amendment is available for review by the shareholders at the offices of
the Company from the date of this notice until the end of the Meeting.
Accordingly, this Item asks the shareholders of Sapiens to amend the
Articles of Association as described above and in the form drawn up by the
office of STvB Advocaten (Europe) N.V. ("STvB"). In addition, the shareholders
are asked to authorize each of the lawyers and candidate notaries of STvB,
acting jointly as well as separately, to effect the Articles Amendment by
passing the deed of amendment before a civil law notary and furthermore to do
everything which might be found necessary, all this with the right of
substitution, to complete the amendment of the Articles of Association in
accordance with the Articles Amendment.
The affirmative vote of the shareholders of Sapiens having a majority of
all outstanding shares of Sapiens' capital shares entitled to vote at the
Meeting is required to resolve to amend the Company's Articles of Association as
contained in this Item.
The Board of Directors Recommends a Vote FOR Item 6
7. Amendment of the Company's Stock Option Plans
In 1992, our Board of Directors and shareholders approved the 1992 Stock
Option and Incentive Plan (the "1992 Stock Plan") pursuant to which our
officers, directors and employees are eligible to receive awards of stock
options and restricted stock. In February 2003, the Board of Directors
authorized the extension of the 1992 Stock Plan until April 2012 and our
shareholders approved that extension. In 2003, our Board of Directors and
shareholders approved the 2003 Share Option Plan (the "2003 Option Plan"),
pursuant to which our officers, directors, employees, consultants and
contractors are eligible to receive awards of stock options. In the remainder of
this section, the 1992 Stock Plan and 2003 Option Plan will be referred to
together as the "Incentive Plans."
The Company has reserved 500,000 authorized but unissued common shares for
purposes of the Incentive Plans. As of December 31, 2003, options to purchase up
to an aggregate of 1,558,495 common shares have been granted under the Incentive
Plans (after taking into account cancellations of options granted), leaving a
remainder of only 202,141 authorized but unissued common shares for the purposes
of the Plans.
In order to allow the Company to continue to use the Plans for their
intended purposes, it is proposed that both Incentive Plans be amended to allow
an increase of 500,000 in the common shares reserved for the Incentive Plans.
According to the terms of the Incentive Plans and rule 4350(i)(1)(A) of the
Nasdaq Stock Market, Inc., a material increase in the aggregate number of common
shares as to which awards may be granted under the Incentive Plans must be
approved by the shareholders of the Company.
The affirmative vote of the shareholders of Sapiens having a majority of
all outstanding shares of Sapiens' capital shares entitled to vote at the
Meeting is required to resolve to amend the Company's Incentive Plans as
described in this Item.
The Board of Directors Recommends a Vote FOR Item 7
4
8. Other Matters
The Board of Directors knows of no other matters to be presented at the
Meeting. If any additional matter should be presented properly, it is intended
that the enclosed proxy will be voted in accordance with the discretion of the
persons named in the proxy.
Shareholders are urged to complete and return their proxies promptly in
order, among other things, to ensure action by a quorum and to avoid the expense
of additional solicitation. If the accompanying proxy is properly executed and
returned in time for voting, and a choice is specified, the shares represented
thereby will be voted as indicated thereon. If no specification is made, the
proxy will be voted in favor of each of the proposals described in this Proxy
Statement.
By Order of the Board of Directors
Yitzhak Sharir
President and Chief Executive Officer
Curacao, Netherlands Antilles
July 19, 2004
5
ANNEX A
ARTICLES AMENDMENT
Note: Additions are indicated by underlinings, deletions by strikethroughs.
Only those clauses which have been changed are set forth here, hence the gaps
in article and clause numbering.
ARTICLE I
NAME AND DOMICILE
.. . .
1.3 The Company [is domiciled] has its statutory seat in Curacao and may
have branches and/or branch offices [elsewhere] outside of the
Netherlands Antilles.
[1.4 The Company may change its place of domicile in accordance with the
Netherlands Antilles ordinance on Transfer of Domicile to Third
Countries pursuant to a resolution of the Board of Directors, and to
have same adopt the status of a legal entity incorporated under the
laws of such country.]
ARTICLE II
PURPOSE
The objects of the Company are: . . .
2.16 The Company shall not be entitled to annul or to otherwise invoke
the nullity of any action on the ground that such action exceeded
the objects of the Company.
. . .
ARTICLE IV
CAPITAL AND SHARES
4.1 [The authorized capital of the Company shall be FORTY EIGHT MILLION
THREE HUNDRED THOUSAND EURO ([euro] 48,300,000).] The Company has a
nominal capital (nominal capital being the sum of the par values of
all of the issued shares in the Company's capital stock at any time)
divided in shares of one Eurocent ([euro] 0.01). The maximum nominal
capital of the Company shall be three hundred ten thousand Euro
([euro] 310,000.--) divided into (a) [twenty]thirty million
(2030,000,000) common shares with a par value of [Two Euro and
thirty] one Eurocent ([euro] [2.30] 0.01) each (the "Common Shares")
and (b) one million (1,000,000) preferred shares with a par value of
[Two Euro and thirty] one Eurocent ([euro] [2.30] 0.01) each, which
may be issued in separate series (the "Preferred Shares").
4.2 [Shares representing at least twenty percent (20%) of the authorized
capital of the Company must at all times be subscribed for and
outstanding with third parties in the form of shares with full
voting rights.] At all times at least one share with full voting
rights that participates in the profit, or else one share with full
voting rights and one participating share, must be subscribed for
and outstanding with third parties.
.. . .
4.4 [The remaining unissued shares] Shares shall be issued at such
times, under such conditions and for such consideration as may be
determined by the Board of Directors, provided that such
consideration shall not be less than par value. and provided that no
Common Shares can be issued, if, as a result of such issue, the
number of issued common shares may become more than thirty million
(30,000,000) and that no Preferred Shares can be issued, if, as a
result of such issue, the number of issued preferred shares may
become more than one million (1,000,000).
4.5 The actual issue occurs by means of a written instrument signed by
the Company and the aquirer. The Company cannot issue shares to
itself.
[Note: Text within brackets represents deleted material.]
A-1
[4.5] 4.6 Subject to the provisions of these Articles of Association,
Preferred Shares may be issued from time to time in one or more
series or classes on such terms and conditions as may be determined
by the affirmative vote of a majority of the members of the Board of
Directors, after considering the interests of the holders of Common
Shares.
[4.6] 4.7 Prior to the issuance of any series or class of Preferred Shares the
Board of Directors shall specify: . . .
(d) the rights, if any, of the holders of Preferred Shares of such
series or class to vote on issues before an annual or special
General Meeting of Shareholders or Special Class Meeting;
provided, however, that at all times [shares representing] at
least [twenty percent (20%) of the authorized capital of the
Company shall be issued and held by third parties in the form
of shares]one share with full voting rights; that participates
in the profit, or else one share with full voting rights and
one participating share, must be subscribed for and
outstanding with third parties. . . .
[4.7] 4.8 [content unchanged]
[4.8] 4.9 Upon liquidation of the Company, the holders of shares of any series
or class of Preferred Shares shall be entitled to receive, before
any distribution is made to the holders of Common Shares and of any
other series or class of Preferred Shares ranking junior to such
series or class as to liquidation preference, pro rata with any
distribution made to holders of any series or class of Preferred
Shares ranking on parity with such series or class of Preferred
Shares and after any distribution is made to holders of any other
series or class of Preferred Shares ranking senior to such Preferred
Shares, the amount of the liquidation preference of such shares
which shall not exceed the sum of:
(a) the amount paid for such Preferred Shares on issuance, plus
(b) all accumulated and unpaid dividends on such Preferred Shares to
the date fixed for distribution.
[4.9] 4.10 Subject to the provisions of Article VI, the Board of Directors is
competent, without instruction of the General Meeting of
Shareholders or of any Special Class Meeting, to redeem shares of
all series and classes with due observance of the provisions
applicable thereto of these Articles of Association and the terms
and conditions of any Preferred Shares as determined by the Board of
Directors in accordance with paragraph 6 of this Article IV, as duly
amended, if and when establishing a separate series or class of
Preferred Shares[, and to subsequently cancel them] provided that
[at least twenty percent (20%) of the authorized capital]equity of
the Company [must at all times be subscribed for and outstanding
with third parties in the form]at the time of acquisition at least
equals the nominal capital and as a result of [shares]the
acquisition, the equity will not fall below the nominal capital and
provided further that at least one share with full voting rights
that participates in the profit, or else one share with full voting
rights. and one participating share, remains outstanding with third
parties. Shares so repurchased can be redeemed by the Board of
Directors, without instruction of the General Meeting of
Shareholders or of any Special Class Meeting.
[4.10] 4.11 The redemption price per Preferred Share redeemed in accordance with
paragraph 910 of this Article IV shall be the sum of:
(a) the amount paid for such Preferred Share on issuance, plus
(b) the amount of any premium that may be payable with respect to
such redemption, as the same shall have been fixed by the Board of
Directors at the time of issuance of such Preferred Share; plus
(c) all accumulated and unpaid dividends on such Preferred Shares to
the date fixed for redemption.
[4.11] 4.12 The redemption price per Common Share redeemed in accordance with
paragraph 910 of this Article IV shall be calculated in accordance
with generally accepted accounting principles as being the value
that would be payable on such share were the Company liquidated or
dissolved.
[4.12] 4.13 The Board of Directors is entitled to issue warrants and options to
subscribe for Common Shares for such consideration and on such terms
as determined by the Board of Directors or a duly appointed
committee thereof[.] provided, however, that no rights to acquire
Common Shares can be issued, if, as a result of the exercise of such
right, the number of issued Common Shares will become more than
thirty million (30,000,000). Warrants and options to subscribe for
Common Shares may also be issued to directors, former
[Note: Text within brackets represents deleted material.]
A-2
directors, officers and other persons employed or formerly employed
by the Company or whose services are otherwise contracted by the
Company.
. . .
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
6.1 The Company may for its own account and for valuable consideration
from time to time acquire fully paid up shares, provided [that at
least twenty percent (20%)] the equity of the [authorized
capital] Company at the time of [the Company must at all times be
subscribed for] acquisition at least equals the nominal capital [and
outstanding with third parties in the form] as a result of
[shares] the acquisition, the equity will not fall below the nominal
capital and provided further that at least one share with full
voting rights that participates in the profit, or else one share
with full voting rights. and one participating share, remains
outstanding with third parties. The authority to make any such
acquisition is vested in the Board of Directors. Any shares so
acquired may be cancelled by the Board of Directors.
6.2 Acquisition of shares or certificates of shares in violation with
paragraph 1 of this article 6 is null and void.
[6.2] 6.3 The Company shall not acquire any voting rights by reason of
ownership of its Common Shares, and, in connection with any General
Meeting of Shareholders, Common Shares owned by the Company shall
not be counted as outstanding, or as present or represented, for the
purpose of determining a quorum or for any other purpose.
. . .
ARTICLE VII
FORM AND TRANSFER OF SHARES; SHARE REGISTRY
7.2 The shares shall be entered into a share register (the "Register")
which is kept by the Board of Directors or by a registrar designated
thereto by the Board of Directors (the "Registrar"). The entry shall
mention all information required by article 109 of Book 2 of the
Civil Code, including the name of the shareholder, his [residence or
his elected domicile] address, the quantity of his shares and the
number of the share certificate, if any, representing such shares.,
the amount paid up on each share, voting rights relating thereto,
the obligation to further pay up on the share, if any, the date of
acquisition, the delivery as well as the date of delivery. In the
Register also mention shall be made of any vesting or transfer of a
right of pledge that was either served upon the Company or
acknowledged by the Company (each such right of pledge a "notified
right of pledge") or a right of usufruct on shares as well as the
names and addresses of those who have a notified right of pledge or
a right of usufruct on shares. The Register shall not be open to
inspection by third parties or shareholders, with respect to shares
other than those registered in their name, except with respect to
shares that have not been paid up in full and except further with
respect to the Registrar, if said Registrar has been requested, or
if demand of said Registrar has been made, to disclose any piece of
information in the Register and failure to disclose such information
would lead to liability of the Registrar.
7.3 The transfer of shares shall be effected by way of a written
instrument of transfer ("deed of transfer") signed by the transferor
and the transferee and either serving [a] that deed of transfer upon
the Company or by written acknowledgement of the transfer by the
Company [or by a transfer agent (the "Transfer Agent") designated by
the Board of Directors, which can only take place by an annotation
on the share certificate, if share certificates have been issued for
the registered shares concerned.]. If share certificates have been
issued for the shares concerned the share certificate signed for
transfer by the transferee and the transferor may serve as deed of
transfer. Acknowledgement occurs by means of a signed annotation on
the deed of transfer, or a written statement from the Company
addressed to the transferee. If it concerns shares on which an
amount still has to be paid-up, acknowledgement can only occur on a
deed of transfer that has a formally fixed date. The transfer of
shares listed on a stock exchange may also be effected in accordance
with the system applied by such exchange.
[7.4 The entry in the Register provided for in paragraph 5 of this
Article VII shall have the effect of a written acknowledgement of
the transfer by the Company in the event no share certificate(s) has
(have) been issued.]
[Note: Text within brackets represents deleted material.]
A-3
[7.5] 7.4 Every transfer and devolution of a [registered] share and the
creation of, and every transfer of, a limited right therein shall be
entered in the Register and every such entry shall be signed by a
director or by the Registrar.
[7.6] 7.5 Share certificates for the shares may be issued at the request of
the shareholder. Share certificates for [registered] shares shall
bear a legend in a form as determined from time to time by the Board
of Directors setting forth the terms and conditions specified by the
Board of Directors in accordance with Article IV of these Articles
of Association.
[7.7] 7.6 If any shareholder shall establish to the satisfaction of the Board
of Directors that his share certificate has been lost or destroyed,
then, at his request, a duplicate may be issued under such
conditions and guarantees (which, if required by the Board of
Directors, may include an indemnity bond issued by an insurance
company) as the Board of Directors shall determine. By the issuance
of the new share certificate on which shall be recorded that it is a
duplicate, the old certificate in place of which the new one has
been issued shall become null and void.
[7.8] 7.7 The Board of Directors may authorize the exchange of new share
certificates for mutilated share certificates for [registered]
shares. In such case the mutilated share certificates shall be
delivered to the Company and shall be canceled immediately. The cost
of a duplicate share certificate and any proper expenses incurred by
the Company in connection with the issuance thereof may, at the
option of the Board of Directors, be charged to the shareholder.
. . .
ARTICLE IX
MANAGEMENT
.. . .
9.3 The directors shall be elected at a General Meeting of Shareholders
by a majority of votes cast, in person or by proxy, by the
shareholders entitled to vote. The number of persons constituting
the whole Board of Directors shall be not less than three (3) nor
more than twenty-four (24), as fixed and elected by the General
Meeting of Shareholders. The number of persons constituting the
whole Board of Directors shall, until changed at any succeeding
General Meeting of Shareholders, be the number so fixed and elected.
[Directors may be removed or suspended at any time by the General
Meeting of Shareholders.] At any General Meeting of Shareholders at
which action is taken to increase the number of the whole Board of
Directors or to remove a director, or at any subsequent General
Meeting of Shareholders, any vacancy or vacancies created by such
action may be filled.
9.4 Directors may be removed or suspended at any time by the General
Meeting of Shareholders. A suspension as referred to in this article
automatically terminates if the person concerned has not been
dismissed within two (2) months after the day of suspension.
[Remaining clauses of Article 9 renumbered but content unchanged]
. . .
ARTICLE XI
OFFICERS
11.3 In case of a conflict of interest between the Company and one or
more directors or officers, acting either in private or ex officio,
the Company shall be represented by a person appointed thereto by
the General Meeting of Shareholders. or the Board of Directors. A
director who knows or ought to understand that in a certain instance
there is mention of a conflicting interest between the Company and
him acting privately or ex officio, will timely inform the General
Meeting of Shareholders or the person designated by the General
Meeting of Shareholders or the Board of Directors of such conflict
of interest.
[Note: Text within brackets represents deleted material.]
A-4
. . .
ARTICLE XIII
GENERAL MEETINGS OF SHAREHOLDERS
13.1 All General Meetings of Shareholders shall be held in Curacao.
13.2 [The]Once a year an annual General Meeting of Shareholders shall be
held [within nine (9) months after the end of the preceding
financial year] on a date determined from year to year by the Board
of Directors, for the following purposes: (1) receiving the report
by the Board of Directors on the course of business during the
preceding financial year; (2) [adopting the financial
statements] approving the annual accounts for that year; (3)
determining the allocation of the profits insofar as not destined
for reservation pursuant to article XVII paragraph 3; (4) electing
directors where necessary; (5) dealing with discharge of the Board
of Directors for its management over the preceding financial year;
and [(4](6) for any other purposes required by law and for such
additional purposes as may be specified in the notice of such
meeting.
. . .
13.4 Notice of General Meetings of Shareholders, whether annual General
Meetings or special General Meetings, stating the time and place of
the meeting, shall be mailed to each shareholder at the address
thereof appearing in the Register not less than [ten (10]twelve (12)
(excluding the day of the notice and the day of the General Meeting
of Shareholders) nor more than sixty (60) days prior to the date of
the meeting in question.
. . .
ARTICLE XIV
SPECIAL CLASS MEETINGS
14.3 Notice of a Special Class Meeting stating the time, date and place
of the meeting shall be mailed to each shareholder at the address
thereof appearing in the Register, not less than [ten (10]twelve
(12) nor more than sixty (60) days prior to the date of the Special
Class Meeting concerned.
. . .
ARTICLE XV
ATTENDANCE AND VOTING OF SHARES
.. . .
15.2 Each holder of Common Shares and each holder of Preferred Shares
with full voting rights shall be entitled to one (1) vote for each
Common Share [remainder of 15.2 unchanged]
15.3 On shares belonging to a legal entity in which the Company as a
result of voting rights directly or indirectly has or may exercise
control, voting rights can be exercised.
[15.3] 15.4 For the purpose of determining shareholders entitled to notice . . .
and, in case of a General Meeting of Shareholders or Special Class
Meeting, not less than ten (10) days [(10)] prior to the date on
which the particular action requiring such determination of
shareholders is to be taken. . . . [Remainder of clause 15.4
unchanged]
. . .
ARTICLE XVII
DISTRIBUTION OF PROFITS
.. . .
[17.4 In the event that the profit and loss account shows a loss for any
given year, which cannot be covered by the reserves or compensated
in another manner, no profit shall be distributed in any subsequent
year, as long as the loss has not been recovered.]
[Former clauses 17.5 through 17.10 renumbered but content unchanged]
[Note: Text within brackets represents deleted material.]
A-5
17.10 Any distribution as provided for in the preceding paragraphs can
only occur if, at the moment of distribution, the equity of the
Company at least equals the nominal capital and as a result of the
distribution will not fall below the nominal capital.
. . .
ARTICLE XIX
BALANCE SHEET AND PROFIT AND LOSS ACCOUNT
19.1 Within eight (8) months after the end of the financial year of the
Company, the Board of Directors shall prepare the balance sheet and
profit and loss account together with the explanatory notes (the
"annual accounts") with respect to such past financial year. The
annual accounts shall be prepared in accordance with generally
accepted standards and shall provide such insight as shall make it
possible for a sound opinion to be formed as regards the Company's
capital and the results and also, insofar as the nature of the
annual accounts shall so permit, as regards the Company's solvency
and liquid assets.
19.2 Subsequently, the [balance sheet and profit and loss account] annual
accounts shall be submitted to the shareholders for inspection and
[adoption] approval at the annual General Meeting of Shareholders.
From the day at which the notice of the annual General Meeting of
Shareholders is sent until the close of the annual General Meeting
of Shareholders, the balance sheet and profit and loss account,
shall be available for inspection by the shareholders at the office
of the Company, and at any additional place, if specified in the
notice of such meeting.
[19.3 The adoption of the balance sheet and profit and loss account by the
annual General Meeting of Shareholders shall have the effect of
acquitting and discharging the Board of Directors for their actions
during the past financial year to the extent such actions appear
from the balance sheet and profit and loss account or to the extent
the results of such actions are clearly embodied therein.]
. . .
ARTICLE XXI
DISSOLUTION
.. . .
21.5 During liquidation the provisions of these Articles of Association
shall remain in force as far as possible. Article XVII paragraph 10,
is equally applicable to preliminary liquidation distributions
.. . .
# # # # # # #
[Note: Text within brackets represents deleted material.]
A-6
SAPIENS INTERNATIONAL CORPORATION N.V.
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
AUGUST 26, 2004
Notice is hereby given that the Annual General Meeting of Shareholders of
Sapiens International Corporation N.V. will be held at the registered offices of
Sapiens International Corporation N.V. at Landhuis Joonchi Kaya Richard J.
Beaujon z/n, Curacao, Netherlands Antilles, on August 26, 2004 at 10:00 am
(Curacao time), for the following purposes:
(Continued and to be signed on the reverse side)
14475
ANNUAL GENERAL MEETING OF SHAREHOLDERS OF
SAPIENS INTERNATIONAL CORPORATION N.V.
August 26, 2004
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 THROUGH 7.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE |X|
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
1. To approve the Board of Directors' annual report on the |_| |_| |_|
management of the business of the Company for the year
ended December 31, 2003.
2. To adopt the Company's Consolidated Balance Sheet as of |_| |_| |_|
December 31, 2003 and the related Consolidated
Statements of Operations (profit and loss account) and
Cash Flows for the year then ended
3. To approve the discharge of the Board of Directors for |_| |_| |_|
the management of the affairs of the Company for the
year ended December 31, 2003.
4. To elect the following slate of nominees to the Board of |_| |_| |_|
Directors of the Company to serve as directors of the
Company until the next annual general meeting of
shareholders of the Company: Ron Zuckerman, Dan
Goldstein, Gad Goldstein, Naamit Salomon, Yeoshua
Agassi, Yocheved Dvir, Rammy Ringel, Yitzhak Sharir and
MeesPierson Intertrust (Curacao) N.V.
5. To approve the appointment of Kost Forer Gabbay & |_| |_| |_|
Kasierer, a Member of Ernst & Young Global, as
independent auditors to audit the accounts of the
Company for the year ending December 31, 2004.
6. To resolve to amend the Articles of Association of the |_| |_| |_|
Company as described in the Proxy Statement.
7. To approve an amendment of the Company's Stock Option |_| |_| |_|
Plans in order to increase the aggregate number of
common shares reserved for such plans.
--------------------------------------------------------------------------------
To change the address on your account, please check the box at right and |_|
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via
this method.
Signature of Shareholder ____________________________ Date: ____________________
Signature of Shareholder ____________________________ Date: ____________________
Note: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full corporate
name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.