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FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Month of July 1999
PARADIGM GEOPHYSICAL LTD.
(Translation of Registrant's Name into English)
Shenkar Street 9, Gav Yam Center No.3, P.O.B. 2061 Herzlia B, Israel 46120
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover 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
------- --------
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82---------- .
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Attached to the Registrant's Form 6-K for the month of July 1999 and
incorporated by reference herein is the Registrant's Notice of Annual General
Meeting of Shareholders and Proxy Statement dated July 30, 1999.
<PAGE> 3
SIGNATURE
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.
PARADIGM GEOPHYSICAL LTD.
(Registrant)
By: /s/ Brian Berman
-----------------------
Brian Berman
Chief Financial Officer
Dated: July 30, 1999
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PARADIGM GEOPHYSICAL LTD.
NOTICE OF
ANNUAL GENERAL MEETING
OF SHAREHOLDERS
AUGUST 31, 1999
Notice is hereby given that the Annual General Meeting of Shareholders (the
"Meeting") of Paradigm Geophysical Ltd. (the "Company") will be held at Shenkar
Street 9, Gav Yam Center No. 3, Herzlia 46120, Israel on August 31, 1999 at
10.00 a.m., for the purposes of considering and voting upon resolutions
regarding the following matters:
1. The election of the specified nominees as directors;
2. Ratification of certain matters relating to the conversion of the Class
A, Class B, Class C and Class C-1 Preferred Shares of the Company into
Ordinary Shares upon the closing of the Company's initial public
offering in June 1998;
3. Approval of the action of the Compensation Committee to reduce the
exercise price of options to purchase 30,000 Ordinary Shares granted to
the Chief Executive Officer of the Company under the Company's 1997
Executive Stock Option Plan from $9.00 to $7.00 per Ordinary Share;
4. Ratification of the appointment of Kost, Forer & Gabbay as the Company's
independent auditors for the fiscal year 1999;
5. Approval of the Auditor's Report, the Directors' Report and the
Consolidated Financial Statements of the Company for the fiscal year
1998.
Only shareholders of record, as of the close of business on July 15, 1999
are entitled to notice of, and to vote at, the Meeting and any postponements or
adjournments thereof.
Any shareholder who executes and delivers a proxy may revoke it at any time
prior to its use by delivery of a written notice of such revocation, or a duly
executed proxy bearing a later date, to the Secretary of the Company at the
registered office of the Company set forth above or to the Company's transfer
agent, or by appearing at the Meeting and requesting the return of the proxy, or
by voting at the Meeting.
In accordance with the provisions of the Company's Articles of Association,
all proxies must be received by the Company's transfer agent or at the
registered office of the Company set forth above at least 48 hours prior to the
Meeting to be validly included in the tally of Ordinary Shares voted at the
Meeting.
By Order of the Board of Directors
Jonathan Keller
Secretary
Dated: July 30, 1999
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PARADIGM GEOPHYSICAL LTD.
PROXY STATEMENT
FOR
ANNUAL GENERAL MEETING
OF SHAREHOLDERS
AUGUST 31, 1999
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Paradigm Geophysical Ltd. (the "Company") of proxies
in the form enclosed to be voted at its Annual General Meeting of Shareholders
(the "Meeting") to be held at Shenkar Street 9, Gav Yam Center No. 3, Herzlia
46120, Israel on August 31, 1999 at 10.00 a.m., and at any postponements or
adjournments thereof.
Only shareholders of record, as of the close of business on July 15, 1999
are entitled to notice of, and to vote at, the Meeting and any postponements or
adjournments thereof. As of that date, the Company had outstanding 13,026,334
Ordinary Shares, par value NIS 0.5 per share (the "Ordinary Shares"). Each share
is entitled to one vote.
Each form of proxy which is properly executed and returned to the Company
will be voted in the manner directed by the shareholder executing it or, if no
directions are given, will be voted for:
1. The election of the specified nominees as directors;
2. Ratification of certain matters relating to the conversion of the Class
A, Class B, Class C and Class C-1 Preferred Shares of the Company into
Ordinary Shares upon the closing of the Company's initial public
offering in June 1998;
3. Approval of the action of the Compensation Committee to reduce the
exercise price of options to purchase 30,000 Ordinary Shares granted to
the Chief Executive Officer of the Company under the 1997 Executive
Stock Option Plan from $9.00 to $7.00 per ordinary share;
4. Ratification of the appointment of Kost, Forer &. Gabbay as the
Company's independent auditors for the fiscal year 1999; and
5. Approval of the Auditor's Report, the Directors' Report and the
Consolidated Financial Statements of the Company for the fiscal year
1998.
The Company's Annual Report for the fiscal year 1998, which is not part of
this proxy solicitation, is being mailed to shareholders together with this
Proxy Statement and the accompanying form of proxy.
The Company's registered address is Shenkar St. 9, Gav Yam Center No. 3,
Herzlia 46120, Israel and its telephone number is +972-9-9709300.
Any shareholder who executes and delivers a proxy may revoke it at any time
prior to its use by delivery of a written notice of such revocation, or a duly
executed proxy bearing a later date, to the Secretary of the Company at the
registered office of the Company set forth above or to the Company's transfer
agent, or by appearing at the Meeting and requesting the return of the proxy, or
by voting at the Meeting.
In accordance with the provisions of the Company's Articles of Association,
all proxies must be received by the Company's transfer agent or at the
registered office of the Company at least 48 hours prior to the Meeting to be
validly included in the tally of Ordinary Shares voted at the Meeting.
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PRINCIPAL SHAREHOLDERS
The following table sets forth the number of shares owned by:
(i) all shareholders known to the Company to beneficially own more
than 5% of the Company's Ordinary Shares as of June 30, 1999;
(ii) all directors and executive officers as a group:
<TABLE>
<CAPTION>
NUMBER OF
ORDINARY PERCENTAGE
SHARES OF SHARES
OWNED OUTSTANDING
--------- -----------
<S> <C> <C>
Mashov Gruss Investments Ltd................................ 1,497,766 11.5%
5 Haplada St., Or Yehuda 60219 Israel
Bachow Investment Partners III L.P.......................... 1,399,000 10.7%
3 Bala Plaza East, 5th floor,
Bala Cynwyd, PA 19004, USA
Shamrock Holdings Inc....................................... 1,110,943 8.5%
4444, Lakeside Drive, PO Box 7774,
Burbank, California, 91510-7774, USA
Hancock International Private Equity Partners II -- Direct
Fund L.P.................................................. 999,000 7.7%
One Financial Center, 44th floor,
Boston, Mass. 02111, USA
Jerusalem Venture Partners L P.............................. 877,193 6.7%
Technology Park, Bldg. No. 1 4th Fl.,
Jerusalem 91487 Israel
All directors and executive officers as a group (12
persons)(1)............................................... 594,966 4.5%
</TABLE>
- ---------------
(1) Comprised of 258,782 Ordinary Shares and options to purchase an aggregate of
336,184 Ordinary Shares of the Company which are exercisable within 60 days
of July 30, 1999.
PROPOSAL NO. 1. THE ELECTION OF THE SPECIFIED NOMINEES AS DIRECTORS.
The Board of Directors recommends the election of the seven nominees for
director named below. The affirmative vote of the holders of a majority of the
Ordinary Shares represented at the Meeting in person or by proxy and entitled to
vote will be necessary for the election of a director. The directors (except for
the Chief Executive Officer, Mr. Eldad Weiss, who serves as a director by virtue
of his office and whose term of office expires upon the termination or
expiration of his employment as the Chief Executive Officer) will hold office
until the Annual General Meeting of Shareholders held in the year following
their election. Should any of the nominees not be available for election, the
proxies will be voted for a substitute nominee designated by the Board of
Directors. It is not expected that any of the nominees will be unavailable.
Each nominee's age, year of appointment as director and their principal
occupation or employment for the past five years is set out in the table below
and the narrative following the table:
<TABLE>
<CAPTION>
YEAR OF
NAME AGE POSITION WITH COMPANY APPOINTMENT
---- --- --------------------- -----------
<S> <C> <C> <C>
Jacob Dunietz......................... 43 Director 1993
Erel Margalit......................... 36 Director 1995
Elie Barr............................. 52 Director 1996
Amos Nur.............................. 61 Director 1998
Jay D. Seid........................... 38 Director 1999
Michael Geiger........................ 61 Director 1999
Mordechai Abir........................ 69
</TABLE>
JACOB DUNIETZ. Mr. Dunietz is Chief Executive Officer, Managing Director
and a member of the Board of Directors of Mashov Computers Ltd., a
publicly-traded holding company, which is quoted on the Tel Aviv
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Stock Exchange ("Mashov"), and a member of the Boards of Directors of Mashov's
subsidiaries. Mr. Dunietz also services as Chief Executive Officer of Magic
Software Enterprises Ltd., an Israeli software company (and a subsidiary of
Mashov) whose securities are publicly-traded on the Nasdaq National Market. Mr.
Dunietz is a member of the Board of Directors of BVR Technologies Ltd., a
holding Company, whose securities are publicly traded on the Nasdaq National
Market, and of Dunietz Brothers Ltd., a construction and real estate company,
whose securities are publicly traded on the Tel Aviv Stock Exchange, Mr. Dunietz
also serves as a member of the Board of Directors of the subsidiaries of Dunietz
Brothers Ltd.
EREL MARGALIT. Mr. Margalit is the General Partner of each of two venture
capital funds, Jerusalem Pacific Ventures (1994) L.P. and Jerusalem Venture
Partners (1997) L.P., which he founded, targeted at early stage communications,
software and e-commerce companies in Israel, Europe and the U.S. Mr. Margalit
also serves on the Boards of Directors of several privately-held companies. From
1990 to 1993, Mr. Margalit was Director of Business Development for the City of
Jerusalem.
ELIE BARR. Mr. Barr has been a Managing Partner of Mofet Israel Technology
Fund since 1996. Prior to that, Mr. Barr was a consultant to high-tech companies
and certain governmental entities. From 1992 to 1995, Mr. Barr was an Executive
Vice President of Teledata Communications Ltd., a telecommunications company.
AMOS NUR. Professor Nur is Professor of Earth Sciences at Stanford
University. Professor Nur joined the faculty of Stanford University in 1970, and
has served as a Professor of Geophysics at Stanford since 1979, and Chairman of
the University's Department of Geophysics between 1985 and 1991, and again since
1997. He was appointed to the Wayne Loel chair of Earth Sciences in 1988. In
addition, he was a distinguished lecturer in 1997 of the Society of Exploration
Geophysicists and is currently a distinguished lecturer for the American
Association of Petroleum Geologists. Professor Nur is an honorary member of the
Society of Exploration Geophysics.
JAY. D. SEID. Mr. Seid is a Managing Director of Bachow & Associates Inc.
Prior to joining Bachow & Associates Inc. in December 1992, Mr. Seid was
President of Judicate, Inc., a nationwide provider of alternative dispute
resolution (mediation and arbitration) services. Previously, he was an attorney
specializing in mergers and acquisitions at Wolf, Block, Schorr and Solis-Cohen
in Philadelphia. Mr. Seid also serves on the Boards of Directors of several
privately-held companies.
MICHAEL GEIGER. Mr. Geiger has been a senior international consultant to
the Shamrock International Group since 1987. Mr. Geiger serves on the
supervisory board of Netia Holdings and is a director of Tel Ad Jerusalem
studios and Formula Ventures Ltd. Mr. Geiger served as a consultant to
Occidental Petroleum Corporation for their energy and chemical industry
activities in Israel.
MORDECHAI ABIR. Dr. Abir has been Senior Strategist in the field of energy
and international relations at Schroder & Co. Inc. since September 1995, and has
been a consultant to Schroder & Co. Inc. since 1991. From October 1998 until
September 1995, Dr. Abir was a Professor of MidEastern &. African Studies at the
Hebrew University in Jerusalem and has been a Professor Emeritus since 1995. Dr.
Abir is a consultant and guest lecturer in the fields of International and
Middle East affairs, the oil economy and oil politics at academic institutions
and government and non-government organizations in the United States, Europe,
Israel and Japan, including, the Woodrow Wilson and Brookings Institution in
Washington D.C., the U.S. Congress, the NATO Defense College in Rome and several
East European Institutions of Political Science.
The Israeli Companies Ordinance defines the duties of care and skill and
the fiduciary duties of loyalty and good faith owed by directors and officers to
a company. The Company's Articles of Association allow for the indemnification
and insurance of its directors and senior officers against certain liabilities.
The Company has agreed to indemnify and insure its directors and executive
officers against certain liabilities which they may incur in connection with the
performance of their duties. Under the terms of such indemnification provisions,
the Company may, to the extent permitted by law, advance funds for legal
expenses covered by such indemnification.
The Companies Ordinance requires disclosure by an "Office Holder" to the
Company in the event that an Office Holder has a direct or indirect personal
interest in transactions to which the Company intends to be a party. An "Officer
Holder" is defined in the Companies Ordinance as a director, managing director,
chief
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business manager, executive vice president, vice president, other manager
directly subordinate to the managing director or any other person assuming the
responsibilities of any of the foregoing positions without regard to such
person's title.
AUDIT COMMITTEE
The Companies Ordinance requires that certain transactions, actions and
arrangements be approved as provided for in a company's Articles of Association
and/or by an Audit Committee of the Board of Directors whose members meet
certain criteria defined in the Companies Ordinance and by the Board of
Directors itself. Those transactions which require such approval pursuant to the
Company's Articles of Association must be approved by both the Company's Board
of Directors and its Audit Committee. In certain circumstances shareholder
approval is also required.
The Company's Audit Committee is comprised of Messrs. Barr, Margalit and
Seid. Approval by the Audit Committee and the Board of Directors is required for
such matters as:
(i) certain transactions to which the Company intends to be a party
and in which an Office Holder, as defined above, or an interested party has
a direct or indirect personal interest; and
(ii) certain transactions defined in the Companies Ordinance as
extraordinary transactions (a transaction which is not in the ordinary
course of business, or is not at market conditions, or a transaction which
is likely to have a material impact on the profitability, property or
obligations of the Company).
Directors with respect to whom the foregoing matters are brought for Board
of Directors or Audit Committee approval are not entitled to vote thereon, and
Office Holders (including directors) with respect to whom such matters are
brought for such approval may not be present during Board of Directors'
discussions pertaining thereto.
COMPENSATION COMMITTEE
The Company's Compensation Committee is comprised of Messrs. Dunietz and
Ofer Nemirovsky. (Mr. Nemirovsky will not seek reelection to the Board and his
place on the Compensation Committee will be filled after the Annual General
Meeting). Approval by the Compensation Committee is required for such matters
as:
(i) Approval of stock option plans
(ii) Approval of options to be granted to employees
(iii) Approval of employment contracts of executive officers
(iv) Approval of bonus arrangements for executive officers.
The affirmative vote of the holders of a majority of the Ordinary Shares
represented at the Meeting in person or by proxy and voting thereon will be
necessary for shareholder approval of this resolution.
THE BOARD OF DIRECTORS DEEMS THE ELECTION AS DIRECTORS OF THE SEVEN
NOMINEES LISTED ABOVE TO BE IN THE BEST INTERESTS OF THE COMPANY AND ITS
SHAREHOLDERS AND RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THESE NOMINEES.
EXECUTIVE COMPENSATION
The aggregate remuneration paid by the Company to all persons as a group
(12 persons) who served in the capacity of director or executive officer in the
year ended December 31, 1998, was approximately $493,000 which includes amounts
paid to provide pension, retirement or similar benefits, but does not include
amounts spent by the Company for automobiles made available to all of its
executive officers, expenses reimbursed to executive officers and other fringe
benefits commonly reimbursed or paid by companies. In 1998, the
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Company set aside approximately $63,000 for the pension and severance fund
benefits of its executive officers and directors.
STOCK OPTION PLANS
In 1994, the Company approved a stock option plan for key employees (the
"Key Employee Plan"), the May 1994 Stock Option Plan (the "May 1994 Plan") and
the 1994 General Stock Option Plan (the "1994 General Plan") (the Key Employee
Plan, the May 1994 Plan and the 1994 General Plan are collectively referred to
as "the 1994 Plans").
Under the Key Employee Plan, the Company granted options to six key
employees of the Company to purchase a total of 63,336 Ordinary Shares,
exercisable at $.59 per Ordinary Share, with the purchase price of the Ordinary
Shares payable in full against issuance of the Ordinary Shares. The options
issued pursuant to the Key Employee Plan are vested and became exercisable
immediately upon the grant of such options.
Under the May 1994 Plan and the 1994 General Plan, the Company has granted
options to purchase a total of 226,184 and 60,176 Ordinary Shares, respectively.
Both the May 1994 Plan and the 1994 General Plan are administered by either the
Board of Directors or the Compensation Committee. The option exercise price
under the May 1994 Plan for 114,678 Ordinary Shares is $2.50 per Ordinary Share,
and for 111,506 Ordinary Shares is $4.00 per Ordinary Share. The option exercise
price under the 1994 General Plan is $7.00 per Ordinary Share. Furthermore,
under each of such Plans, the option exercise price is payable in cash, by check
or by any other form of payment that is satisfactory to the Board of Directors
or the Compensation Committee and the Company may provide loans to employees to
assist them in purchasing shares upon exercise of the options. Under the May
1994 Plan, 226,184 options are vested and are exercisable immediately. Options
granted under the 1994 General Plan are vested, two thirds are exercisable
immediately and one-third on July 15, 2000. Options granted under the May 1994
Plan and 1994 General Plan, if unexercised, expire ten years from the date of
grant.
Options granted under the 1994 Plans are not transferable by the option
holder, other than by will or pursuant to the laws of descent and distribution.
Under the 1994 Plans, the options expire immediately upon the termination of the
option holder's employment, unless the Board of Directors or the Compensation
Committee authorizes an extension of the exercise term beyond the employees
termination date. In the event of a termination of employment without cause, any
unexpired vested options may be exercised up to 90 days following the date of
termination of employment, but only with respect to the number of shares
purchasable at the time of the option holder's termination of employment. In the
event of the termination of employment as a result of death or disability of the
option holder, any unexpired vested options may be exercisable up to six months
from the date of such termination but only with respect to the number of shares
purchasable at the time of such termination. In the event of the option holder's
retirement, any outstanding options shall, at the discretion of the Board of
Directors or the Compensation Committee, accelerate and become immediately
exercisable as of the later of the date of retirement or one year following the
date of the grant.
As of June 30, 1999, the Company had granted options under the 1994 Plans
to certain officers of the Company to purchase an aggregate of 139,439 Ordinary
Shares at exercise prices ranging from $.59 to $7.00 per share; in each case,
the option exercise price was equal to the fair market value of the Ordinary
Shares on the date of grant, as determined by the Company's Board of Directors.
THE 1997 STOCK OPTION PLANS
Under the 1997 Stock Option Plan for Qualifying Israel Employees, the 1997
Executive Stock Option Plan and the 1997 Stock Option Plan for U.S. Employees
(collectively, the "1997 Plans"), the Company has reserved for issuance an
aggregate of 1,950,000 Ordinary Shares. The 1997 Plans are administered by the
Board of Directors or the Compensation Committee and will terminate on January
4, 2005. The option exercise price per Ordinary Share will be determined by the
Board of Directors or the Compensation Committee and will be set forth in an
option agreement between the Company and each optionee, with the option price
not being less that 100% of the fair market value of each option share at the
date of the option grant, unless otherwise determined by the Board or the
Compensation Committee. Fair market value is
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defined in the 1997 Plans as the mean between the highest and lowest quoted
selling prices of the Company's publicly traded shares listed on a stock
exchange on such date. If no sales occur on the desired date, then fair market
value will be determined by taking a weighted average of the mean between the
highest and lowest quoted selling prices for a reasonable period both before and
after the desired date. The option exercise price will be payable in cash, by
check or by any other form of payment that is satisfactory to the Board of
Directors or the Compensation Committee. In addition, the Company may provide
loans to employees to assist them in purchasing shares upon exercise of the
options. The 1997 Plans vest as to 25% of the options granted after a period of
employment with the Company or its subsidiaries of 12 consecutive months from
the date of the grant. The remaining 75% vest in 12 equal quarterly installments
commencing from the end of the first 12 month vesting period. These options
expire eight years from the date of grant.
Options granted under the 1997 Plans are not transferable by the option
holder, other than by will or pursuant to the laws of descent and distribution.
Additionally, the options expire immediately upon the termination of the option
holder's employment, unless the Board of Directors or the Compensation Committee
authorizes an extension of the exercise term beyond the employee termination
date. In the event of termination of employment without cause, any unexpired
vested options may be exercised up to 90 days following the date of termination
of employment, but only with respect to the number of shares purchasable at the
time of the option holder's termination of employment. In the event of the
termination of employment as a result of death or disability of the option
holder, any unexpired vested options may be exercised up to six months following
the date of such termination, but only with respect to the number of shares
purchasable at the time of such termination. In the event of the option holder's
retirement, any outstanding options shall, at the discretion of the Board of
Directors or the Compensation Committee, accelerate and become immediately
exercisable as of the later of the date of retirement or one year following the
date of the grant. The shares underlying any options which expire or are
cancelled prior to exercise are subject to future options grants under the 1997
Plans.
As of June 30, 1999, the Company had granted options under the 1997 Plans
to certain officers of the Company to purchase an aggregate of 378,934 Ordinary
Shares at exercise prices ranging from $5.00 to $7.00 per share; in each case,
the option exercise price was equal to the fair market value of the Ordinary
Shares on the date of grant, as determined by the Company's Board of Directors.
In the case of options to purchase 30,000 Ordinary Shares granted to the Chief
Executive Officer of the Company, the exercise price of $7 is subject to
shareholder approval.
PROPOSAL NO. 2. RATIFICATION OF CERTAIN MATTERS RELATING TO THE CONVERSION OF
THE CLASS A, CLASS B, CLASS C AND CLASS C-1 PREFERRED SHARES OF
THE COMPANY INTO ORDINARY SHARES UPON THE CLOSING OF THE
COMPANY'S INITIAL PUBLIC OFFERING IN JUNE 1998.
Article 4.3(b)(ii) of the Company's Articles of Association provides that
each share of Class A Preferred Shares, Class B Preferred Shares, Class C and
Class C-1 Preferred Shares (the "Preferred Shares") shall immediately and
automatically, without the need to provide notice to holders of the Preferred
Shares, be converted into fully-paid and non-assessable Ordinary Shares of the
Company upon the closing of the Company's initial public offering.
After the closing of the Company's initial public offering in June 1998,
the Company notified the Israeli Registrar of Companies (the "Registrar") that
the conversion had taken place and requested that the Registrar update his
records accordingly. The records of the Registrar in this respect are not a
pre-condition to the legal effect of the conversion.
Nevertheless, the Registrar did not respond and did not update his records
because the Registrar claimed that the conversion could theoretically have led
to a decrease in shareholders' equity or an illegal "disguised issuance" of
shares.
The Company, through it's attorneys, has opposed these claims, on the
grounds that, among other things, the conversion took place on the basis of one
Ordinary Share for every one Preferred Share converted and the amount of
outstanding shares did not change as a result of the conversion.
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The Registrar has thus far not agreed to register the conversion and has
proposed that instead the shareholders of the Company simply ratify the
conversion. The Company, under protest and without making any admission that the
conversion procedures detailed in its Articles of Association are in any way
subject to question, proposes that the shareholders ratify this conversion in
order to finally settle this matter without any further waste of time and effort
in correspondence or legal proceedings with the Registrar.
Consequently, it is proposed that the shareholders of the Company adopt the
following special resolution:
"TO RATIFY THE CONVERSION OF ALL CLASS A PREFERRED SHARES OF NIS 0.5
NOMINAL VALUE EACH, CLASS B PREFERRED SHARES OF NIS 0.5 NOMINAL VALUE EACH,
CLASS C PREFERRED SHARES OF NIS 0.5 NOMINAL VALUE EACH AND CLASS C-1 PREFERRED
SHARES OF NIS 0.5 NOMINAL VALUE EACH INTO ORDINARY SHARES NIS 0.5 NOMINAL VALUE
EACH OF THE COMPANY AT A RATIO OF ONE ORDINARY SHARE FOR EACH ONE PREFERRED
SHARE."
The affirmative vote of the holders of seventy-five percent (75%) of the
Ordinary Shares represented at the Meeting in person or by proxy and voting
thereon will be necessary for shareholder approval of this resolution.
THE BOARD OF DIRECTORS DEEMS THIS PROPOSAL TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS A VOTE FOR APPROVAL TO RATIFY
THE CONVERSION OF THE PREFERRED SHARES INTO ORDINARY SHARES OF THE COMPANY IN
THE MANNER STATED ABOVE.
PROPOSAL NO. 3. APPROVAL OF THE ACTION OF THE COMPENSATION COMMITTEE OF THE
COMPANY TO REDUCE THE EXERCISE PRICE OF OPTIONS TO PURCHASE
30,000 ORDINARY SHARES WHICH WERE GRANTED TO THE CHIEF EXECUTIVE
OFFICER OF THE COMPANY UNDER THE COMPANY'S 1997 EXECUTIVE STOCK
OPTION PLAN FROM $9.00 TO $7.00 PER ORDINARY SHARE.
At the time of the initial public offering of the Company's ordinary shares
in June 1998, options granted to employees at prices exceeding the initial
public offering price of $7.00 per share were reduced to the initial public
offering price. The exception to this was options to purchase 30,000 Ordinary
Shares which were granted to the Chief Executive Officer, Eldad Weiss, at an
exercise price of $9.00 per share. The Compensation Committee has reduced the
exercise price of these options to $7.00 per share subject to, in accordance
with Israeli law, shareholder approval at the Annual General Meeting.
Consequently, it is proposed that the shareholders of the Company adopt the
following resolution:
"TO APPROVE THE ACTION OF THE COMPENSATION COMMITTEE OF THE COMPANY TO
REDUCE THE EXERCISE PRICE OF OPTIONS TO PURCHASE 30,000 ORDINARY SHARES WHICH
WERE GRANTED TO THE CHIEF EXECUTIVE OFFICER OF THE COMPANY UNDER THE COMPANY'S
1997 EXECUTIVE STOCK OPTION PLAN FROM $9.00 TO $7.00 PER ORDINARY SHARE."
The affirmative vote of the holders of a majority of the Ordinary Shares
represented at the Meeting in person or by proxy and voting thereon will be
necessary for shareholder approval of this resolution.
THE BOARD OF DIRECTORS DEEMS THIS PROPOSAL TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS A VOTE FOR APPROVAL OF THE
ACTION OF THE COMPENSATION COMMITTEE TO REDUCE THE EXERCISE PRICE OF OPTIONS TO
PURCHASE 30,000 ORDINARY SHARES GRANTED TO THE CHIEF EXECUTIVE OFFICER OF THE
COMPANY UNDER THE COMPANY'S 1997 EXECUTIVE STOCK OPTION PLAN FROM $9 TO $7 PER
ORDINARY SHARE.
PROPOSAL NO. 4. RATIFICATION OF THE APPOINTMENT OF KOST, FORER & GABBAY AS THE
COMPANY'S INDEPENDENT AUDITORS.
Kost, Forer & Gabbay, Certified Public Accountants (Israel), a member firm
of Ernst & Young, International have been nominated by the Board of Directors of
the Company for reappointment as auditors of the Company for the year 1999, and
their remuneration shall be fixed by the Board of Directors according to the
volume and nature of their services. They have no relationship with the Company
or with any affiliate of the Company except as auditors.
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The affirmative vote of the holders of a majority of the Ordinary Shares
represented at the Meeting in person or by proxy and voting thereon will be
necessary for shareholder approval of the reappointment of Kost, Forer & Gabbay
as independent auditors of the Company.
THE BOARD OF DIRECTORS DEEMS THIS PROPOSAL TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS A VOTE FOR APPROVAL OF THE
REAPPOINTMENT OF KOST, FORER & GABBAY AS AUDITORS OF THE COMPANY.
PROPOSAL NO. 5. APPROVAL OF THE AUDITOR'S REPORT, THE DIRECTORS' REPORT AND THE
CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY FOR THE YEAR
ENDED DECEMBER 31, 1998.
At the meeting, the Auditor's Report, the Directors' Report and the
Consolidated Financial Statements of the Company for the year ended December 31,
1998, will be presented.
The affirmative vote of the holders of a majority of the Ordinary Shares
represented at the Meeting in person or by proxy and voting thereon will be
necessary for shareholder approval of the Auditors' Report, the Directors'
Report and the Consolidated Financial Statements of the Company for the year
ended December 31, 1998
THE BOARD OF DIRECTORS DEEMS THIS PROPOSAL TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS A VOTE FOR APPROVAL OF THE
AUDITORS' REPORT, THE DIRECTORS' REPORT AND THE CONSOLIDATED FINANCIAL
STATEMENTS OF THE COMPANY FOR THE YEAR ENDED DECEMBER 31, 1998.
OTHER BUSINESS
Management knows of no other business to be transacted at the Meeting; but,
if any other matters are properly presented to the Meeting, the persons named in
the enclosed form of proxy will vote upon such matters in accordance with their
best judgment.
All expenses in connection with this solicitation will be borne by the
Company. In addition to solicitation by mail, officers and regular employees of
the Company may solicit proxies by personal interview, and by telephone and
telegraph, and may request brokers holding stock in their names, or the names of
nominees, to forward proxy soliciting material to the beneficial owners of such
stock, and will reimburse such brokers for their reasonable expenses.
By Order of the Board of Directors
Jonathan Keller
Secretary
Dated: July 30, 1999
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 20-F WILL BE SENT WITHOUT CHARGE
TO ANY SHAREHOLDER REQUESTING IT IN WRITING FROM:
PARADIGM GEOPHYSICAL LTD.
SHENKAR STREET 9,
GAV YAM CENTER NO. 3
HERZLIA 46120 ISRAEL
ATTENTION: SECRETARY
8
<PAGE> 10
PARADIGM GEOPHYSICAL LTD.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 31, 1999
The undersigned shareholder of Paradigm Geophysical Ltd. (the "Company") hereby
appoints Eldad Weise and Brian Berman, and each of them acting singly, with
power of substitution, the attorneys, agents and proxies of the undersigned and
authorizes them to represent and vote on behalf of the undersigned, as
designated, all of the shares of the Company that the undersigned is entitled
to vote at the Annual General Meeting of Shareholders of the Company to be held
at 10:00 a.m. on August 31, 1999, and at any adjournment or postponement of such
meeting for the purposes identified on the reverse side of this proxy and with
the discretionary authority as to any other matters that properly come before
the Annual General Meeting, in accordance with and as described in the Notice
of Annual General Meeting of Shareholders and Proxy Statement. This proxy when
properly executed will be voted in the manner directed herein by the
undersigned shareholder. If this proxy is returned without direction being
given, this proxy will be voted FOR proposals 1 through 5.
(Continued and to be dated and signed on other side)
<PAGE> 11
[DOWN ARROW] PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED [DOWN ARROW]
<TABLE>
<CAPTION>
<S> <C> <C>
----- Please mark your
A X votes as in this
----- example.
</TABLE>
<TABLE>
<CAPTION>
WITHHOLD
FOR AUTHORITY
all nominees to vote for all
listed at nominees listed
right at right FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C> <C>
1. The Election Nominees: 2. Ratification of Certain Matters
of the / / / / Mr. Jack Dunietz Relating to the Conversion of the / / / / / /
Nominees Mr. Erel Margalit Class A, Class B, Class C and Class
Listed at right as Directors Mr. Elie Barr C-1 Preferred Shares of the Company.
Dr. Amos Nur
(INSTRUCTION: To withhold authority to Mr. Jay D. Seid 3. Approval of the Action of the
vote for any individual nominee, strike Mr. Michael Geiger Compensation Committee reducing the / / / / / /
a line through the nominee's name in the Dr. Mordechai Abir exercise price of options granted
list at right) to the Chief Executive Officer.
4. Ratification of the Appointment of
the Company's Independent Auditors. / / / / / /
5. Approval of the Auditor's Report,
the Directors' Report and the / / / / / /
Consolidated Financial Statements of
the Company for the Year Ended December 31, 1998.
Discretionary authority is hereby granted with respect to
such other matters as may properly come before the meeting.
This proxy, when properly executed, will be voted in the
manner directed herein by the undersigned shareholder. If no
direction is made, this proxy will be voted for each of the
proposals named at right.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARE PROMPTLY,
USING THE ENCLOSED ENVELOPE.
Signature ________________________________________ Signature if held jointly ______________________________ Dated: ___________, 1999
</TABLE>
<TABLE>
<S> <C>
NOTE: Please sign exactly as name appears hereon. When shares are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate
name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person. The
above signed acknowledges receipt of the Notice of the Annual General Meeting of Shareholders and the Proxy Statement
furnished therewith.
</TABLE>
