<PAGE> 1
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 October 2000
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
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(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--------
<PAGE> 2
Attached to the Registrant's Form 6-K for the month of October 2000 and
incorporated by reference herein is the Registrant's Proxy Statement dated
October 24, 2000.
<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/ Jonathan Keller
-------------------------------
Jonathan Keller
Company Secretary
Dated: 26 October, 2000
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PARADIGM GEOPHYSICAL LTD.
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
October 24, 2000
Notice is hereby given that the Annual General Meeting of Shareholders (the
"Annual General Meeting" or the "Meeting") of Paradigm Geophysical Ltd.
("Paradigm" or the "Company") will be held on November 30, 2000, at the offices
of the Company, located at 9 Shenkar Street, Gav Yam Center No. 3, Herzlia
Pituach, 46120, Israel, at 10:30 A.M. local time, for the following purposes:
(a) To elect six directors to hold office pursuant to the Company's
Articles of Association;
(b) To appoint two External Directors as required by the Israeli Companies
Law, 1999;
(c) To approve and adopt the Amended and Restated Articles of Association
of the Company;
(d) To approve the indemnification of the Company's officers and Directors
in advance with respect to certain liabilities and in certain amounts;
(e) To approve the Auditors' Report, the Directors' Report and the Audited
Consolidated Financial Statements of the Company and its subsidiaries
for the year ended December 31, 1999; and
(f) To reappoint the Company's auditors and to authorize the Board of
Directors to fix the remuneration of the auditors in accordance with
the volume and nature of their services.
Shareholders of record at the close of business on October 21, 2000 are
entitled to notice of and to vote at the Meeting.
Shareholders who are unable to attend the Meeting in person are requested
to complete, date and sign the enclosed form of proxy and return it promptly in
the enclosed pre-addressed envelope. No postage is required if mailed in the
United States. Shareholders who attend the Meeting may revoke their proxy and
vote their shares in person.
In accordance with the Company's Articles of Association, all proxies must
be received by American Stock Transfer and Trust Company, the Company's transfer
agent, or by the Company at its registered office, located at 9 Shenkar Street,
Gav Yam Center No. 3, Herzlia Pituach, 46120, Israel, at least 48 hours prior to
the Meeting to be validly included in the tally of Ordinary Shares voting at the
Meeting.
Joint holders of Ordinary Shares should take note that, pursuant to Article
98 of the Articles of Association of the Company, the vote of the senior of the
joint holders of any share who tenders a vote, whether in person or by proxy,
will be accepted to the exclusion of the vote(s) of the other registered
holder(s). For this purpose, seniority will be determined by the order in which
the names stand in the Register of Members.
By Order of the Board of Directors,
]ELDAD WEISS
Chairman of the Board of Directors
THE ANNUAL REPORT OF THE COMPANY FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999,
INCLUDING AUDITED CONSOLIDATED FINANCIAL STATEMENTS, IS ENCLOSED, BUT IS NOT
PART OF THE PROXY SOLICITATION MATERIALS.
<PAGE> 5
PARADIGM GEOPHYSICAL LTD.
9 SHENKAR STREET, GAV YAM CENTER NO. 3
HERZLIA PITUACH, 46120, ISRAEL
------------------------
PROXY STATEMENT
------------------------
This proxy statement is furnished to the holders of Ordinary Shares, NIS
0.50 nominal value per share (the "Ordinary Shares"), of Paradigm Geophysical
Ltd., an Israeli company ("Paradigm" or the "Company"), in connection with the
solicitation of proxies for use at the Annual General Meeting of Shareholders
(the "Annual General Meeting" or the "Meeting") scheduled to be held on November
30, 2000, at the offices of the Company, 9 Shenkar Street, Gav Yam Center No. 3,
Herzlia Pituach, 46120, Israel at 10:30 A.M. local time or at any adjournment or
postponement thereof. A form of proxy for use at the Meeting and a return
envelope for the proxy are also enclosed. Shareholders may revoke their proxies
at any time before the effective exercise thereof by filing with the Company a
written notice of revocation or duly executed proxy bearing a later date, or by
voting in person at the Meeting. Unless otherwise indicated on the form of
proxy, Ordinary Shares represented by a proxy in the enclosed form, if the proxy
is properly executed and received by the Company prior to the Meeting, will be
voted in favor of all the matters to be presented at the Meeting, as described
below.
It is proposed that at the Meeting: (a) six members of the Board of
Directors be elected; (b) two External Directors be elected according to the
Israeli Companies Law; (c) the Amended and Restated Articles of Association of
the Company be approved and adopted; (d) the indemnification of the Company's
officers and Directors in advance with respect to certain liabilities and in
certain amounts be approved; (e) the Auditors' Report, Directors' Report and
Audited Consolidated Financial Statements of the Company be presented and
approved; and (f) the Company reappoint its auditors and authorize the Board of
Directors to fix the remuneration of the auditors in accordance with the volume
and nature of their services.
The Company is not aware at this time of any other business to be acted
upon at the Meeting. However, if any other business properly comes before the
Meeting, it is the intention of the persons named in the enclosed proxy to vote
on such matters in accordance with their best judgment.
Proxies for use at the Meeting are being solicited by the Board of
Directors of the Company. Proxies will be mailed on or about October 27, 2000 to
shareholders of record at the close of business on October 21, 2000, and will be
solicited mainly by mail, but additional solicitation may be made by telephone,
telecopier or other means of communication or personal contact by certain
officers, directors and regular employees of the Company, none of whom will
receive any additional compensation therefor. The Company will bear the cost of
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 Ordinary Shares.
OUTSTANDING SHARES, VOTING RIGHTS
AND BENEFICIAL OWNERSHIP
The Company had outstanding, as of October 4, 2000, 14,691,902 Ordinary
Shares, each of which is entitled to one vote upon the matters to be presented
to the Annual General Meeting. Only shareholders of record at the close of
business on October 21, 2000 will be entitled to vote at the Meeting. The quorum
at the Meeting shall be at least two members present in person or by proxy,
holding or representing at least one-third of the total outstanding Ordinary
Shares of the Company.
The following table sets forth, as of October 4, 2000, the number of
Ordinary Shares of the Company owned by (i) all persons known to the Company to
own beneficially more than 10% of the Company's Ordinary Shares and (ii) all
directors and officers as a group.
<PAGE> 6
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
ORDINARY SHARES ORDINARY SHARES
NAME AND ADDRESS OWNED OUTSTANDING
---------------- --------------- ---------------
<S> <C> <C>
Shamrock Holdings Inc. ..................................... 1,649,943 11.2%
4444 Lakeside Drive
Burbank, California 91510-7774
U.S.A
Compagnie Generale de Geophysique........................... 1,500,000 10.2%
1, Rue Leon Migaux
91302 Massy Cedex, France
Mashov Gruss Investments Ltd................................ 1,497,766 10.2%
5 Haplada St., Or Yehuda 60219
Israel
All officers and directors as a group(1) (11 persons)....... 768,567 5.1%
</TABLE>
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(1) Comprised of 246,782 Ordinary Shares and options to purchase 482,885
Ordinary Shares of the Company which were exercisable within 60 days of
September 30, 2000.
ELECTION OF DIRECTORS
The Board of Directors proposes to elect six directors set out below. Eldad
Weiss is a director by virtue of his office as Chief Executive Officer of the
Company.
If a nominee should be unable to serve, the proxies will be voted for the
election of such other person as shall be determined by the persons named in the
proxy in accordance with their judgment. The Company is not aware of any reason
why any of the nominees, if elected, should be unable to serve as directors.
The nominees as directors, their present principal occupations or
employment, ages and the year in which each first became a director are:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME OR EMPLOYMENT AGE YEAR OF APPOINTMENT
---- -------------------- --- -------------------
<S> <C> <C> <C>
Jacob Dunietz..................................... Director 44 1993
Erel Margalit..................................... Director 37 1995
Elie Barr......................................... Director 53 1996
Jay Seid.......................................... Director 39 1999
Michael Geiger.................................... Director 62 1999
Thierry Le Roux................................... Director 46
</TABLE>
JACOB DUNIETZ has served as a Director since July 1993 and served as
Chairman of the Board of Directors of the Company from July 1993 until July
1999. Mr. Dunietz is Chief Executive Officer and a Director of Magic Software
Enterprises Ltd., an Israeli software Company 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, and he also serves as a member of the Board of
Directors of all of its subsidiaries. Until December 1999, Mr. Dunietz was Chief
Executive Officer and a Director of Mashov Computers Ltd., a publicly-traded
holding Company, which is quoted on the Tel Aviv Stock Exchange.
EREL MARGALIT has served as a Director since May 1995. 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 and software and e-commerce companies in
Israel. 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.
2
<PAGE> 7
ELIE BARR has served as a Director since June 1996. 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.
JAY SEID has served as a Director since April 1999. 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 publicly traded
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 is a member of the Board of Directors of OutSource International. Inc,,
Vista Information Solutions, Inc. and Berger Holdings, Ltd. Mr. Seid also serves
on the Boards of Directors of several privately-held companies.
MICHAEL GEIGER has served as a Director since May 1999. 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. Mr. Geiger is a Governor of Tel-Aviv
University.
THIERRY LE ROUX has served as Senior Executive Vice-President of Compagnie
Generale de Geophysique ("CGG"), a French company, whose securities are publicly
quoted on the New York Stock Exchange and the Paris Stock Exchange, since
October 1998. From January 1995 until September 1998 Mr. Le Roux served as
Executive Vice-President of CGG. Mr Le Roux has served as Chairman and Chief
Executive Officer of Sercel S.A , a French company which is a subsidiary of CGG
since June 1995. Mr Le Roux is a Director of Consotium Francais de Localisation
S.A., Mobiloc S.A.S and Interactive Network Technologies Inc. From 1996 until
1998 Mr. Le Roux was a Director of Dassault Sercel Navigation Positionnement
S.A.
Under the Articles of Association of the Company, the Chairman of the Board
does not cast the deciding vote in the event of a tie.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION
OF THE ABOVE NOMINEES AS DIRECTORS OF THE COMPANY
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 ELECTION OF THE ABOVE NOMINEES AS
DIRECTORS OF THE COMPANY.
ELECTION OF EXTERNAL DIRECTORS
Under the new Israeli Companies Law which came into effect on February 1,
2000, Israeli companies whose shares have been offered to the public in or
outside of Israel (such as the Company) are required to appoint two people to
serve as external directors on the board of directors of the company. The
Companies Law provides that a person may not be appointed as an external
director if the person or the person's relative, partner, employer or any entity
controlled by that person has at the date of appointment, or has had at any time
during the two years preceding that date, any affiliation with the company, any
entity controlling the company or any entity controlled by the company or by
this controlling entity. The term "affiliation" includes:
- an employment relationship;
- business or professional relationship maintained on a regular basis;
- control; or
- service as an officer.
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<PAGE> 8
No person can serve as an external director if the person's position or
other business creates, or may create, conflict of interests with the person's
responsibilities as an external director or if such position or other business
may impair such director's ability to serve as an external director. No person
who is a director in one company can serve as an external director in another
company, if at that time a director of the other company serves as an external
director in the first company. The Companies Law further provides that when, at
the time of appointment of an external director, all members of the board of
directors of the company are of one gender, then the external director appointed
shall be of the other gender.
External directors are appointed by a majority vote at a shareholders'
meeting, provided that either: (1) the majority of shares voted at the meeting,
including at least one third of the shares of non-controlling shareholders voted
at the meeting, vote in favor of appointment of the director or (2) the total
number of shares of non-controlling shareholders voted against the election of
the director does not exceed one percent of the aggregate voting rights in the
company. The initial term of an external director will be three years and may be
extended for an additional three-year period. Each committee of the Company's
board of directors will be required to include at least one external director
and all external directors must be members of the Company's audit committee.
Regulations promulgated under the Companies Law provide that the applicability
of the Companies Law with respect to the nomination by an Israeli company whose
shares are publicly traded outside Israel (such as the Company) only shall
commence August 1, 2000. These regulations also provide that, with respect to a
company whose shares are publicly traded outside Israel only, the external
directors do not have to be residents of Israel.
An external director is entitled to consideration and to the refund of
expenses, only as provided in regulations adopted under the Companies Law and is
otherwise prohibited from receiving any other consideration, directly or
indirectly, in connection with service provided as an external director.
Nevertheless, the grant of an exemption from liability for breach of fiduciary
duty or duty of care, an undertaking to indemnify, indemnification or insurance
under the provisions of the Companies Law shall not be deemed as consideration.
Under the Companies Law, an external director cannot be dismissed from the
office unless:
- the board of directors determines that the external director no longer
meets the requirements for holding such office, as set forth in the
Companies Law or that the director is in breach of his or her fiduciary
duties to the company and the shareholders of the company vote (by the
same majority required for the appointment) to remove the external
director after the external director has been given the opportunity to
present his or her position;
- an Israeli court determines, upon a request of a director or a
shareholder, that the director no longer meets the requirements for
holding such office as set forth in the Companies Law or that the
director is in breach of his or her fiduciary duties to the company; or
- the court determines, upon a request of the company or a director,
shareholder or creditor of the company, that the external director is
unable to fulfill his or her duty or has been convicted of certain crimes
as specified in the Companies Law.
The Company proposes that General.(res.) Zvi Zamir and Ms. Mary Safrai be
appointed as the Company's External Directors to hold office according to the
provisions of the Companies Law and that they be paid the maximum amount
permitted under the Companies Law and the regulations thereunder or such lesser
amount as determined by the Board of Directors. The brief biographies of the
nominees to act as External Directors are as follows:
ZVI ZAMIR is a director of The Israel Corporation, Pardess Industries,
Magor Holdings and Lapidoth Israel Oil Exploration, whose securities are
publicly traded on the Tel Aviv Stock Exchange. Gen.(res.) Zamir is also a
director of Oil Refineries Ltd. owned jointly by the government of Israel
and The Israel Corporation and of several private companies and public
bodies. Gen(res.) Zamir occupied several senior positions in the Israel
Defence Forces and was a member of its general staff. Gen.(res.) Zamir was
Israel's military and defence attache in the UK and Scandinavia and from
1968 to 1974 was the head of the Mossad, Israel's secret service.
4
<PAGE> 9
MARY SAFRAI was Financial analyst with responsibility for the coverage
of oil service, exploration and production companies at Carl H. Phorzheimer
& Co. in New York between 1996 and 2000. Ms. Safrai served as Committee
Chairman of the New York Society of Security Analysts energy group. Ms.
Safrai is a member of the National Association of Petroleum Investment
Analysts and the Oil Analysts Group of New York.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPOINTMENT OF
GEN(RES.) ZAMIR AND MS. SAFRAI AS EXTERNAL DIRECTORS OF THE COMPANY
TO HOLD OFFICE IN ACCORDANCE WITH THE COMPANIES LAW
THE NOMINEES MUST BE ELECTED AT THE MEETING BY MAJORITY VOTE, PROVIDED THAT
EITHER: (1) THE MAJORITY OF SHARES VOTED AT THE MEETING, INCLUDING AT LEAST ONE
THIRD OF THE SHARES OF NON-CONTROLLING SHAREHOLDERS VOTED AT THE MEETING, VOTE
IN FAVOR OF APPOINTMENT OF THE DIRECTOR, OR (2) THE TOTAL NUMBER OF SHARES OF
NON-CONTROLLING SHAREHOLDERS VOTED AGAINST THE ELECTION OF THE DIRECTOR DOES NOT
EXCEED ONE PERCENT OF THE AGGREGATE VOTING RIGHTS IN THE COMPANY.
APPROVAL OF AMENDED AND RESTATED ARTICLES OF ASSOCIATION
The Company's existing Articles of Association have been in force since the
Company made its initial public offering in June 1998. However, due to changes
in circumstances and particularly, the entering into force of the new Israeli
Companies law of February 1, 2000, the Company's Articles of Association are
outdated and, the Company believes do not provide it or the shareholders with
the flexibility which a Company requires. The Board of Directors proposes that
the Company adopt an Amended and Restated Articles of Association. A copy of the
proposed form of Amended and Restated Articles of Association is available for
review at the Company's offices in Israel during normal business hours or will
be sent to shareholders upon request.
Some of the most significant changes relative to the existing Articles of
Association, include:
- The existing Articles of Association contain certain provisions which
were effective prior to the Company's initial public offering and are no
longer relevant.
- The ability of the Board of Directors to declare dividends (in cash or in
kind) to shareholders (the existing Articles of Association require
shareholders' approval).
- All decisions which under the existing Articles of Association and the
Israeli law in force until February 1, 2000 required that the amendments
to the Articles of Association and a number of other decisions like the
increase of share capital, share splits and other recapitalizations
required the approval of at least 75% of the shareholders present and
voting at a special meeting of shareholders. As permitted under the new
Companies Law, according to the proposed Amended and Restated Articles of
Association, these decisions will require a simple majority of
shareholders present and voting at any shareholders meeting (with the
exception of Article 100 which deals with certain business combinations
the amendment to which requires the affirmative vote of at least 75% of
the Shareholders present (in person or by proxy) at the Meeting and
voting on the resolution).
- The Company is permitted to purchase its own shares in certain
circumstances (this was previously prohibited).
- The existing Articles of Association require a quorum of one third of the
total outstanding shares at any meeting of shareholders; the proposed
Amended and Restated Articles of Association will reduce this to twenty
five percent (25%).
The aforesaid is only a very brief summary and is qualified in its entirety
by the full form of the proposed Amended and Restated Articles of Association.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL
OF THE AMENDED AND RESTATED ARTICLES OF ASSOCIATION.
THIS RESOLUTION REQUIRES THE AFFIRMATIVE VOTE OF AT LEAST 75% OF THE
SHAREHOLDERS PRESENT
(IN PERSON OR BY PROXY) AT THE MEETING AND VOTING ON THIS RESOLUTION
APPROVAL OF INDEMNIFICATION OF DIRECTORS AND OFFICERS IN ADVANCE
The Companies Law permits a company to insure a director and a officer in
respect of liabilities incurred by him by reason of acts or omissions committed
in his capacity as a director or officer with respect to: a breach of the
director's or officer's duty of care to the company or to another person, or a
breach of the director's or officer's fiduciary duty to the company, to the
extent that he acted in good faith and had reasonable cause to believe that the
act would not prejudice the company. Furthermore, the Companies Law provides
that a company can indemnify a director or officer for monetary liabilities or
obligations imposed upon him in favor of other persons pursuant to a court
judgement, including a compromise judgement or an arbitrator's decision approved
by a court, and reasonable litigation expenses, including attorney's fees,
actually incurred by the director or officer or imposed upon him by a court, in
an action, suit or proceedings brought against him by or on behalf of the
company or by other persons, in connection with a criminal action from which he
was acquitted or in connection with a criminal action which does not require
proof of criminal intent in which he was convicted, in each case by reasons of
acts or omissions of such person in his capacity as director or officer.
Furthermore, the Companies Law provides that the company's articles of
association may provide for indemnification of a director or officer after the
fact and may also provide that a company may undertake to indemnify a director
or officer in advance, provided such undertaking is limited to types of
occurrences which, in the opinion of the company's board of directors, are, at
the time of the undertaking, foreseeable and, to an amount the board of
directors has determined is reasonable in the circumstances.
The Company's Articles of Association, as presently in effect, allow the
Company to insure and indemnify director's and officer's to the fullest extent
permitted by law except that the Company's shareholders have not yet approved
the indemnification of director's and officer's in advance and the required
amendments to its Articles of Association. The requisite shareholder approval is
being sought, and these amendments are being proposed as part of the Amended and
Restated Articles of Association for which shareholder approval is being sought,
at the Meeting, as described below. The Company has previously approved
indemnification for officers and directors according to the then prevailing law
in Israel.
It is proposed that the Shareholders adopt the following resolution:
"OFFICER AND DIRECTOR INDEMNIFICATION
That it is deemed in the best interest of the Company and its shareholders
to enter into indemnification agreements with its officers and directors
pursuant to indemnification agreements in substantially the form attached
hereto as EXHIBIT A, together with any such changes thereto determined by
the Chief Executive Officer of the Company, (or in the case of his
indemnification agreement, as determined by the Chief Financial Officer of
the Company), to be desirable (subject to the provisions of the Israeli
Companies Law), such determination to be conclusively presumed by such
officer's execution and delivery of definitive indemnification agreements,
and such agreements are hereby approved and adopted.
That the Shareholders of this Company believe it to be in the best
interests of the Company and its shareholders to enter into indemnification
agreements with all directors and officers of the Company and to approve in
advance indemnification of such individuals pursuant to the terms of the
indemnification agreements up to the amount, each individually or in the
aggregate, of $10,000,000.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL
OF THE INDEMNIFICATION OF COMPANY DIRECTORS AND OFFICERS AS SET FORTH ABOVE.
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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 INDEMNIFICATION AGREEMENTS WITH ALL
DIRECTORS AND OFFICERS OF THE COMPANY AND TO APPROVE IN ADVANCE INDEMNIFICATION
OF SUCH INDIVIDUALS.
APPROVAL OF AUDITORS' REPORT, DIRECTORS'
REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS
At the Meeting, the Auditors' Report, Directors' Report and Audited
Consolidated Financial Statements of the Company and its subsidiaries for the
fiscal year ended December 31, 1999, 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, Directors' Report and Audited Consolidated Financial
Statements of the Company and its subsidiaries for the fiscal year ended
December 31, 1999.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AUDITORS' REPORT,
DIRECTORS' REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY
AND ITS SUBSIDIARIES FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999.
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, DIRECTORS' REPORT
AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY AND ITS
SUBSIDIARIES FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999.
APPOINTMENT OF AUDITORS
Kost, Forer & Gabbay, Certified Public Accountants (Israel) and a member of
Ernst & Young International, has been nominated by the Board of Directors of the
Company for reappointment as auditors of the Company for the fiscal year ending
December 31, 2000, 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE REAPPOINTMENT
OF KOST, FORER & GABBAY AS AUDITORS OF THE COMPANY.
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 FOR THE FISCAL YEAR ENDING DECEMBER 31,
2000.
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.
By Order of the Board of Directors,
ELDAD WEISS
Chairman of the Board of Directors
Dated: October 24, 2000
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<PAGE> 12
EXHIBIT A
PARADIGM GEOPHYSICAL LTD.
Gav Yam Center No. 3
9, Shenkar St.
Herzliya B 46120
Israel
INDEMNIFICATION AGREEMENT
To: Date:
------------------------
------------------------------
------------------------------
Dear
------------------------
WHEREAS it is in the best interest of Paradigm Geophysical Ltd. (the "COMPANY")
to retain and attract as directors, officers and/or employees the most
capable persons available, and such persons are becoming more reluctant
to serve publicly-held companies unless they are provided with adequate
protection thorough insurance, indemnification and exculpation in
connection with such service; and
WHEREAS you are a director, officer and/or employee of the Company, or one of
its subsidiaries that serves as an "office holder" as that term defined
in the Companies Law -- 1999 ("OFFICE HOLDER", "LAW") and in order to
enhance your continued service to the Company in an effective manner,
the Company desires to provide hereunder for your indemnification and
exculpation to the fullest extent permitted by law; and
WHEREAS the board of directors of the Company (the "BOARD") and the
Shareholders of the Company have resolved that the Company shall
indemnify and exculpate you as further specified below and the general
meeting of the shareholders of the Company has approved that
resolution.
NOW, THEREFORE, in consideration of your continuing to serve the Company, the
Company hereby undertakes to indemnify you in advance in respect of:
1. INDEMNIFICATION
The Company shall indemnify you, to the maximum extent permitted by applicable
law, for the following ("Indemnifiable Events"):
1.1 Any financial obligation imposed on you in favor of a third party by a
court judgment, including a compromise judgment approved by court
(provided that the Company approved the compromise in advance) or an
arbitrator's award approved by court (provided that it was given
pursuant to arbitration agreed to by the Company in advance), for an
act or omission performed by you in your capacity as an Office Holder.;
and
1.2 reasonable legal expenses, including attorneys' fees, expended by or
charged to you or adjudicated against you by a court in a proceeding
commenced against you by the Company or on its behalf or by another
person, or in a criminal charge from which you were acquitted, or in a
criminal charge that does not require intent, in which you were
convicted, all for an act or omission performed in your capacity as an
Office Holder.
<PAGE> 13
2. Without derogating from the aforesaid the said indemnity shall apply in
certain foreseeable events and up to a feasible amount under the circumstances,
as the Board shall determine and shall not apply with respect to:
2.1 a breach of a fiduciary duty, except for a breach of a fiduciary duty
to the Company while acting in good faith and having reasonable cause
to assume that such act would not prejudice the interests of the
Company;
2.2 a willful breach of the duty of care or reckless or with disregard for
the circumstances or to the consequences of a breach of the duty of
care;
2.3 an act with intent to unlawfully realize personal gain; or
2.4 a fine or monetary composition imposed for an offense.
3. The provisions of Section 1 above to the contrary notwithstanding, no
payment hereunder shall be made to you in connection with an Indemnifiable Event
for which payment is actually paid to you under a valid and collectible
insurance policy or under a valid and enforceable agreement, except in respect
of any excess beyond the payment under such insurance or agreement.
If so requested by you, the Company shall advance an amount (or amounts)
estimated by it to cover your reasonable legal expenses, including attorneys'
fees, with respect to which you are entitled to be indemnified under Section 1
above. The obligation of the Company to make such advances shall be subject to
the condition that, if, when and to the extent that it is determined that you
were not entitled to be so indemnified under applicable law, you hereby agree to
promptly reimburse the Company for all such amounts theretofore advanced.
As part of the aforementioned undertaking, the Company will make available to
you any security or guarantee that you may be required to post in accordance
with an interim decision given by a court or an arbitrator, including for the
purpose of substituting liens imposed on your assets.
4. The total amount of indemnification that the Company undertakes towards all
persons whom it has been resolved to indemnify pursuant to the above
resolutions, jointly and in the aggregate, shall not exceed the greater of:
4.1 An amount equal to 10 Million US Dollars, according to the
representative rate of exchange, or any other official rate of exchange
that may replace it, at the time of indebtedness; or
4.2 The amount adjudicated against you jointly and severally with others
who the Company has not resolved to indemnify pursuant to the above
resolutions -- the amount adjudicated against you subject to the
limitations in paragraph 4.1 plus the amount adjudicated against such
others if their portion is not collected for any reason.
5. The Company will be entitled to any amount collected from a third party in
connection with liabilities indemnified hereunder.
NOTIFICATION AND DEFENSE OF CLAIM
6. Promptly after receipt by you of notice or any other indication of any claim
or of the commencement or threatened commencement of any action, suit or other
proceeding which may give rise to an Indemnifiable Event, you will notify the
Company in writing thereof and you will deliver to the Company or pursuant to
its instructions, without delay, and all documents which you received or will
receive in connection therewith.
7. Notwithstanding any other provision of this Agreement, with respect to any
claim, action, suit or other proceeding which may give rise to an Indemnifiable
Event: (other than with respect to proceedings that have been initiated against
you by the Company or in its name).
7.1 The Company will be entitled to participate therein at its discretion
and expense;
2
<PAGE> 14
7.2 You shall fully cooperate with the Company and provide any reasonable
assistance requested by the Company to it and its counsel including,
but not limited to, the execution of power(s) of attorney and other
documents, at the expense of the Company; and
7.3 To the extent that it may so desire, the Company shall be entitled to
assume the exclusive defense thereof and to settle the same as it sees
fit, with counsel satisfactory to the Company, provided that you do not
object, on reasonable grounds, to the Company's choice of counsel.
8. After notice from the Company to you of its election to so assume the
defense thereof, the Company shall not be liable to you under this Agreement for
any legal expenses, including attorneys' fees, subsequently incurred by you in
connection with the defense thereof.
9. The Company shall not be liable to indemnify you under this Agreement for
any amounts paid in settlement of any claim, action, suit or other proceeding
effected without the Company's written consent.
EXCULPATION
10. Subject to the provisions of the Companies Law, the Company will exculpate
you from liability, or any party of a liability, for damages sustained by a
breach of duty of care to the Company.
GOVERNING LAW
11. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Israel.
Kindly sign and return the enclosed copy of this letter to acknowledge your
agreement to the contents thereof.
Very truly yours,
PARADIGM GEOPHYSICAL LTD.
By:
--------------------------------------
Title:
--------------------------------------
ACKNOWLEDGMENT OF AGREEMENT:
--------------------------------------
Date:
--------------------------------------
3
<PAGE> 15
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL GENERAL MEETING OF SHAREHOLDERS
PARADIGM GEOPHYSICAL LTD.
NOVEMBER 30, 2000
Please Detach and Mail in the Envelope Provided
A /X/ PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
<TABLE>
<CAPTION>
WITHHOLD
FOR AUTHORITY
all nominees to vote for all nominees
listed at right listed at right.
<S> <C> <C> <C>
1. The Election / / / / NOMINEES: Mr. Jacob Dunietz
of the Mr. Erel Margalit
Nominees Mr. Elie Barr
listed at Mr. Jay D. Seid
right as Mr. Michael Geiger
Directors Mr. Thierry Le Roux
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST AT RIGHT.)
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
2. Appointment of the two nominees as External / / / / / /
Directors as required by the Israeli Companies
Law, 1999.
3. Approval and adoption of the Amended and / / / / / /
Restated Articles of Association of the
Company.
4. Approval of the indemnification of the / / / / / /
Company's officers and directors, in advance,
with respect to certain liabilities and in certain
amounts.
5. Ratification of the Appointment of the / / / / / /
Company's Independent Auditors.
6. Approval of the Auditor's Report, the Directors' / / / / / /
Report and the Consolidated Financial
Statements of the Company for the Year Ended
December 31, 1999.
</TABLE>
Discretionary authority is hereby granted with respect to such other matters
as may properly come before the meeting.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
Signature _____________________________________________________________________
Signature if held jointly____________________________ Dated:____________, 2000
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.
<PAGE> 16
PARADIGM GEOPHYSICAL LTD.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 30, 2000
The undersigned shareholder of Paradigm Geophysical Ltd. (the "Company") hereby
appoints Eldad Weiss, Brian Berman and Jonathan Keller, 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 10:30 a.m. on November 30, 2000, 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
6.
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 ON THE REVERSE SIDE.
(CONTINUED AND TO BE DATED AND SIGNED ON OTHER SIDE)
