ICTS INTERNATIONAL N.V.
established at The Netherlands
NOTICE OF
ANNUAL GENERAL MEETING OF SHAREHOLDERS
Notice is hereby given of the Annual General Meeting of Shareholders (the
"Annual Meeting") of ICTS International N.V. (the "Company") which will be held
on Wednesday, August 6, 2003,September 21, 2005, at 11:10:00 A.M. local time, at the offices of
the Company, located at Biesbosch 225, 1181 JC Amstelveen, The Netherlands.
The agenda for the Annual Meeting, including proposals made by the
Supervisory Board and the Management Board, is as follows:
1. Opening of the meeting by the Chairman.
2. To elect nine members toChairman of the Supervisory Board.
2. Report by the Management Board on the course of business of the Company
during the financial year 2004 with respect to the annual accounts of the
financial year 2004.
3. Report by the Supervisory Board with respect to the annual accounts of the
financial year 2004.
4. Report of the Audit Committee with respect to the annual accounts of the
financial year 2004.
5. Adoption of the English language to be used for the annual accounts and
annual reports of the Company.
4.6. Adoption of the annual accounts of the fiscalfinancial year 2002.
5. Authorization for the Company, for a period2004.
7. Election of eighteen months from the datetwo Managing Directors.
8. Election of the Meeting, to expend funds in an amount up to US $10 million to repurchase
shares of its own common stock in the open market at prices not to exceed US
$10.00 per share.
6. Report by the Management Board on the course of business of the Company with
respect to the annual accounts of the year 2002.
7. Report of the Audit Committee.
8. Report by theseven Supervisory Board with respect to the annual accounts of the
year 2002.Directors.
9. Questions.
10. Adjournment.
Pursuant to the Articles of Association of the Company and Netherlands
law, copies of the annual accounts for the fiscalfinancial year 2002,2004, the annual
report which includes the information required pursuant to Section 2:392 of the
Dutch Civil Code and the report of the Supervisory Board are open for inspection
by the shareholders of the Company and other persons entitled to attend meetings
of shareholders at the offices of the Company at Biesbosch 225, 1181 JC,
Amstelveen, The Netherlands, from the date hereof until the close of the Annual
Meeting.
Shareholders may only exercise their shareholder rights for the shares
registered in their name on July 7, 2003,August 17, 2005, the record date for the
determination of shareholders entitled to vote on the day of the Annual Meeting.
The Management Board
Lior ZoukerAvraham Dan
Ran Langer
Managing Director and Chief Executive Officer
July 7, 2003Directors
August 17, 2005
SHAREHOLDERS ARE URGED TO MARK, SIGN AND RETURN PROMPTLY THE
ACCOMPANYING PROXY CARD OR POWER OF ATTORNEY, AS APPLICABLE,
IN THE ENCLOSED RETURN ENVELOPE.
ICTS INTERNATIONAL N.V.
Biesbosch 225
1181 JC Amstelveen,
The Netherlands
(Registered with the Chamber of Commerce at
Amsterdam/Haarlem, The Netherlands under No. 33.279.300)
PROXY STATEMENT
ANNUAL GENERAL MEETING OF SHAREHOLDERS
To be held on August 6, 2003
This Proxy Statement is being furnished to holders of common shares, par value 1.0 Dutch
guilder per share (the "Common Shares"), of ICTS International N.V., a Netherlands corporation (the
"Company"), in connection with the solicitation by the Management Board of proxies in the form
enclosed herewith for use at the Annual General Meeting of shareholders of the Company to be held at
11:00, A.M. local time, on Wednesday, August 6, 2003,PROXY STATEMENT
ANNUAL GENERAL MEETING OF SHAREHOLDERS To be held on September 21, 2005
This Proxy Statement is being furnished to holders of common shares, par
value 1.0 Dutch guilder per share (the "Common Shares"), of ICTS International
N.V., a Netherlands corporation (the "Company"), in connection with the
solicitation by the Management Board of proxies in the form enclosed herewith
for use at the Annual General Meeting of shareholders of the Company to be held
at 10:00, A.M. local time, on Wednesday, September 21, 2005, at the offices of
the Company, located at Biesbosch 225, 1181 JC, Amstelveen, The Netherlands, or
at any adjournment or adjournments thereof (the "Annual Meeting"). A copy of the Notice of Annual General Meeting of Shareholders (the
"Notice"), which contains the agenda for the Annual Meeting (the "Agenda"), accompanies this Proxy
Statement.
The Company's 2002 annual report (the "Annual Report"), which contains the Company's
audited consolidated financial statements for the fiscal year ended December 31, 2002, expressed in
U.S. Dollars and prepared in accordance with United States generally accepted accounting principles
(hereinafter, the "Annual Accounts"), is being mailed with this Proxy Statement.
It is proposed at the Annual Meeting to adopt resolutions approving the following proposals (the
"Proposals"):
1. Election of nine member Supervisory Board (item 2 of the Agenda).
2. Adoption of the English language to be used for the annual accounts and annual reports of the
Company (item 2 of the Agenda).
3. Adoption of the Annual Accounts for the fiscal year ended December 31, 2002 (item 3 of the
Agenda).
4. Authorization for the Company, for a period of eighteen months from the date of the Meeting, to
expend funds in an amount up to US $10,000,00 to repurchase its own Common Shares in the
open market at prices not to exceed US $10.00 per share within the limits of Article 11 of the
Articles of Association.
Pursuant to the Articles of Association of the Company and Netherlands law, copies of the
Annual Accounts, the Annual Report and the information required under Section 2:392 of the Dutch
Civil Code and the report of the Supervisory Board, written in accordance with the Articles of
Association of the Company, are open for inspection by the shareholders and other persons entitled to
attend meetings of shareholders at the office of the Company at Biesbosch 225, 1181 JC, Amstelveen,
The Netherlands, from the date hereof until the close of the Annual Meeting.
Since the Company is a "foreign private issuer" under United States securities laws, the
solicitation of proxies for use at the Annual Meeting is not subject to the proxy rules contained
in Regulation 14A promulgated under the United States Securities Exchange Act of 1934, as
amended.
This solicitation is made by the Management Board and the cost of the solicitation will
be borne by the Company. The Company will reimburse brokerage firms, fiduciaries and
custodians for their reasonable expenses in forwarding solicitation materials to beneficial
owners. The Company is mailing this Proxy Statement, the Notice, the Annual Report, the form
of proxy and the Power of Attorney to the shareholders on or about July 7, 2003.
Voting Securities and Voting Rights
At the close of business on July 7, 2003, the issued and outstanding voting securities of
the Company consisted of 6,513,100 Common Shares. The class of Common Shares is the only
class of voting stock of the Company. Shareholders may exercise their shareholder rights to vote
only the Common Shares registered in their name on July 7, 2003, the record date for the
Annual Meeting.
Shareholders owning and holding approximately 65% of the issued and outstanding
Common Shares of the Company have indicated that they will vote FOR items 1, 2, 3 and 4 of
the Agenda.
The Agenda set forth in the Notice was proposed by the Management Board and
approved by the Supervisory Board.
A registered holder of Common Shares may cast one vote per share at the Annual
Meeting. In accordance with Article 18 of the Articles of Association of the Company, resolutions
may be adopted only when a quorum of at least fifty percent of the outstanding shares entitled
to vote is represented at the Annual Meeting, and adoption of a resolution requires an absolute
majority of the votes cast at the Annual Meeting.
Common Shares cannot be voted at the Annual Meeting unless the registered holder is
present in person or is represented by a written proxy. The Company is incorporated in The
Netherlands and, as required by the laws of The Netherlands and the Company's Articles of
Association, the Annual Meeting must be held in the Netherlands. Shareholders who are unable
to attend the Annual Meeting in person may authorize the voting of Common Shares at the
Annual Meeting by completing and returning the enclosed proxy card naming Lior Zouker and
Stefan Vermeulen as proxyholders. If the proxy in the enclosed form is duly executed and
returned prior to the Annual Meeting, all Common Shares represented thereby will be voted,
and, where specifications are made by the holder of Common Shares on the form of proxy, such
proxy will be voted by the proxyholders in accordance with such specifications.
If no specification is made in the proxy, the proxy will be voted by the
proxyholders FOR items 2, 3 and 4 of the Agenda.
In the event a shareholder wishes to use any other form of proxy, such proxy shall be
voted in accordance with the specification given therein, provided that (i) such proxy states the
number of registered Common Shares held by such shareholder, (ii) the Common Shares for
which the proxy is given are registered in the name of the shareholder on July 7, 2003, and (iii)
such proxy enables the person named therein to vote the Common Shares represented thereby
either in favor of or against the Proposals, or to abstain from voting, as applicable. The
proxyholder shall present the duly executed proxy together with the enclosed form of Power of
Attorney signed by the registered shareholder.
Right of Revocation
Any shareholder who has executed and delivered a proxy to the Company and who
subsequently wishes to revoke such proxy may do so by delivering a written notice of revocation
to the Company at its address set forth above, Attention: Chief Executive Officer, at any time
prior to the Annual Meeting.
Beneficial Ownership of Securities Owners
The following table sets forth below information regarding the beneficial ownership (as
determined under U.S. securities laws) of the Common Shares of the Company, as of ______,
2003, by each person who is known by the Company to own beneficially more than 5% of the
outstanding Common Shares:
Number of Shares Percent of
Beneficially Owned Class Owned
Beneficially Owned Offering
Ezra Harel(1) 4,228,600 64.0%
Menachem Atzmon(2) 3,848,500 59.0%
Oppenheimer Funds 440,600 6.8%
___________________________
1. Harmony Ventures BV, owns approximately 59% of the issued and outstanding Common Shares. Mr. Menachem J.
Atzmon and Mr. Ezra Harel own, indirectly 100% of the outstanding shares of Harmony Ventures BV and may be deemed to
control Harmony Ventures BV. Harmony Ventures BV, Mr. Atzmon and Mr. Harel may be able to appoint all the directors of
ICTS and control the affairs of ICTS. In addition, Mr. Harel owns 380,100 shares.
2. Harmony Ventures BV, owns approximately 59% of the issued and outstanding Common Shares. Mr. Menachem J.
Atzmon and Mr. Ezra Harel own, indirectly 100% of the outstanding shares of Harmony Ventures BV and may be deemed to
control Harmony Ventures BV. Harmony Ventures BV, Mr. Atzmon and Mr. Harel may be able to appoint all the directors of
ICTS and control the affairs of ICTS.
ITEM TWO OF THE AGENDA:
ELECTION OF SUPERVISORY BOARD
At the Annual Meeting, nine members of the Supervisory Board are to be elected to serve until the
2003 Annual Meeting of Shareholders and until their successors have been elected and qualified. The
nominees to be voted on by Shareholders are Messrs. Ezra Harel, Lynda Davey, Melvin Lazar, M. Albert
Nissim, Moshe Winer, Elie Housman, Menachem J. Atzmon, Johannes Endler, and David W. Sass.
All nominees have consented to be named and have indicated their intent to serve if elected. The
Company has no reason to believe that any of these nominees are unavailable for election. However, if any
of the nominees become unavailable for any reason, the persons named as proxies may vote for the
election of such person or persons for such office as the Supervisory Board of the Company may
recommend in the place of such nominee or nominees. It is intended that the proxies, unless marked to
the contrary, will be voted in favor of the election of Messrs. Ezra Harel, Lynda Davey, Melvin Lazar, M.
Albert Nissim, Moshe Winer, Elie Housman, Menachem J. Atzmon, Johannes Endler, and David W. Sass.
THE MANAGEMENT BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
ELECTION OF THE FOLLOWING NINE NOMINEES (ITEM 1 ON THE PROXY CARD).
Ezra Harel (52) is a controlling shareholder of Harmony Ventures B.V. ("Harmony") an investment holding
company. He served as Chairman of the Board of Directors of both Dash 200+, a company involved with the
conversion of Boeing 747 aircraft from passenger to cargo use, since 1991, and Tuffy Associates Inc., an automotive
service franchise company, since 1993. Mr. Ezra Harel is the Chairman of the Advisory Board of Seehafen Rostock
Umschlagsgesellschaft GmbH ("Port of Rostock"),Germany, a company engaged in sea port activities. He has
developed real estate in the United States, Europe and Israel. Mr. Harel is also a director of Inksure Technologies,
Inc. He has been a director of our company and ICTS since inception.
Lynda Davey (48) is Chief Executive Officer of Avalon Group, Ltd. a private investment banking firm she
co-founded in 1992. She also serves as Chairperson of Avalon Securities, Inc., an NASD member broker-dealer, and
NY Venture Space, LLC, a provider of interim office space. From 1988 throughout 1991, Ms. Davey was Managing
Director of The Tribeca Corporation, a New York based buyout firm. Prior to 1988, Ms. Davey was Vice President
in the corporate finance department of Salomon Brothers Inc. She is a director of Tuffy Associates Corp. Ms. Davey
also serves on the Advisory Council of the Center for Women's Business Research and Retail Finance Group of
Wells Fargo Bank. She became a member of the Supervisory Board of ICTS in 2002.
Melvin F. Lazar (63) is a Certified Public Accountant (New York State) and the founding partner of Lazar
Levine & Felix LLP. Mr. Lazar and his firm have served the business and legal communities for over 30 years. He is
an expert in business valuations and merger and acquisition activities. Mr. Lazar is a board member and audit
committee member of Enzo Biochem, Inc., a New York Stock Exchange listed company, which is a leading
biotechnology company that specializes in gene identification and gene regulation technologies for diagnostic and
therapeutic applications. Mr. Lazar is also a board member and serves as the Chairman of the Audit Committee of
privately-owned Active Media Services, Inc., the largest corporate barter company in the nation. He became a
member of the Supervisory Board of ICTS in 2003 and a director of our company since inception.
M. Albert Nissim (69)has served as Secretary of ICTS since January 1994 and became a member of the
Supervisory Board in 2002. Mr. Nissim also serves as President of ICTS - USA, Inc. From 1994 to 1995, he worked
as the managing director of ICTS and from 1990 to the present, he has been Vice-President and a director of Tuffy
Associates. Mr. Nissim has been the President of Pioneer Commercial Funding Corp. ("Pioneer") since January
1997.
Moshe Winer (53) became a member of the Supervisory Board of ICTS in 2002 and a director of our
company since inception. For the past ten years he is the principal of several businesses in the automotive services
field.
Elie Housman (63) has served as Chairman of Inksure Technologies, Inc. since
February 2002. Mr. Housman was a principal at Charterhouse Group International, a privately
held merchant bank, from 1989 until June 2001. At Charterhouse, Mr. Housman was involved
in the acquisition of a number of companies with total sales of several hundred million dollars.
Prior to Charterhouse, he was co-owner of AP Parts, a $250 million automotive parts
manufacturer. Mr. Housman was also the Chairman of Novo Plc. in London, a leading company
in the broadcast storage and services industry. At present, Mr. Housman is a director of a
number of privately held companies in the United States. He became a member of the
Supervisory Board of ICTS in 2002.
Menachem J. Atzmon (58) is a Chartered accountant (Isr). Mr. Atzmon is a controlling
shareholder of Harmony Ventures B.V. Since 1996 he has been the managing director of
Albermale Investment Ltd. and Kent Investment Holding Ltd., both investment companies.
Since January 1998 he has served as CEO of Seehafen Rostock. He has been a member of the
Supervisory Board of ICTS since 1999.
Johannes Endler (62), has been a member of the Supervisory Board of the Company
since January 2002. Mr. Endler has been the CFO of Fraport since 1993. Mr. Endler holds an
MBA from the University of Freiburg.
David W. Sass (67) for the past 42 years has been a practicing attorney in New York City
and is currently a senior partner in the law firm of McLaughlin & Stern, LLP. He has been a
director of ICTS since 2002. Mr. Sass is also a director of BarPoint.com, Inc, an online and
wireless product information and shopping service provider.. He is also corporate secretary and
a director of Pioneer Commercial Funding Corp. Mr. Sass became a director of Inksure
Technologies, Inc. in 2003, a company which develops, markets and sells customized
authentication systems designed to enhance the security of documents and branded products
and to meet the growing demand for protection from counterfeiting and diversion. He is also a
director of several privately held corporations.
ITEM THREE OF THE AGENDA
ADOPTION OF THE ENGLISH LANGUAGE TO BE USED FOR THE ANNUAL ACCOUNTS AND
ANNUAL REPORTS OF THE COMPANY
Pursuant to Section 2:362, Paragraph 7 of the Dutch Civil Code, the annual accounts of a
Netherlands company such as the Company must be prepared in the Dutch language, unless
the General Meeting resolves to use another language. Due to the international structure of the
Company, the Management proposes that the annual accounts and the annual reports of the
Company be prepared in the English language.
A majority of the votes cast is required for the adoption the English language for the Company's
annual accounts and annual reports.
ITEM FOUR OF THE AGENDA:
ADOPTION OF ANNUAL ACCOUNTS
The Company's audited balance sheet as of December 31, 2002 and statement of income for the
year then ended, as expressed in U.S. Dollars and prepared in accordance with U.S. and Dutch
generally accepted accounting principles (the "Annual Accounts"), are submitted to the
Company's shareholders in the English language.
Copies of the Annual Accounts, the Annual Report, which contains the information required
under Section 2:392 of the Dutch Civil Code, and the report of the Supervisory Board are
available for inspection by the Company's shareholders and other persons entitled to attend
meetings of shareholders at the office of the Company at Biesbosch 225, 1181 JC, Amstelveen,
The Netherlands, from the date hereof until the close of the Annual Meeting.
In accordance with Article 20 of the Articles of Association of the Company, the Supervisory
Board has determined to retain all net profit of the fiscal year 2002, except for dividends paid to
fund development and growth of the Company business. On May 13, 2002 ICTS declared and
paid cash dividend of $2.25 per share on its Common Stock to its shareholders prior to the 25%
withholding tax imposed by the Netherlands. On December 10, 2002 ICTS declared and paid a
dividend of $3.00 per share (prior to the 25% withholding tax imposed by the Netherlands).
Such dividend was paid out of the Company's retained earnings.
Pursuant to Article 19 of the Articles of Association of the Company, the unconditional adoption
of the Annual Accounts by the Shareholders at the Annual Meeting constitutes a discharge, for
purposes of Dutch law, of the members of the Management Board and the Supervisory Board for
the matters disclosed in the Annual Accounts. Such discharge is not absolute and will not be
effective as to matters misrepresented or not disclosed to the shareholders.
A majority of the votes cast is required for the adoption of the Company's Annual Accounts.
THE SUPERVISORY BOARD AND THE MANAGEMENT BOARD RECOMMEND A VOTE "FOR"
ITEM THREE (ITEM 2 OF THE PROXY CARD).
PROPOSAL FOUR:
AUTHORIZATION FOR COMPANY TO EXPEND FUNDS IN AN AMOUNT UP TO US
$10,000,000 TO REPURCHASE ITS COMMON SHARES IN THE OPEN MARKET AT PRICES
NOT TO EXCEED US $10.00 PER SHARE
Pursuant to the Company's Articles of Association and Section 2:98(4) of the
Dutch Civil Code, the Company may only acquire Common Shares (other than for no
consideration) if authorized by the Meeting to do so. This authorization can not be for a period
greater than eighteen months and the authorization shall determine how many shares may be
acquired, how they may be acquired, and the high and low prices to be paid for such shares.
In an effort to raise the price of each outstanding Common Share by reducing the
number of shares outstanding, the Company asks that the shareholder authorize the
expenditure by the Company of up to US $10,000,000 to repurchase Common Shares in the
open market at prices up to $10.00 per share for a period of eighteen months commencing the
date of the Meeting.
This Proposal must be approved by at least a majority of the votes cast at the
Meeting.
The Supervisory Board and the Management Board each recommends a vote
FOR Proposal Four.
ITEM SIX OF THE AGENDA
REPORT OF THE AUDIT COMMITTEE
The Audit Committee consists of Mr. Melvin Lazar (Chairman), Lynda Davey and Moshe Weiner.
The Audit Committee and the Supervisory Board have adopted an Audit Committee Charter
which is attached hereto as Exhibit A. The Charter outlines the duties of the Audit Committee
in relation to its responsibilities of overseeing management's conduct of the Company's financial
reporting process, including the selection of the Company's outside auditors and the review of
the financial reports and other financial information provided by the Company to any
governmental or regulatory body, the public or other users thereof, the Company's systems of
internal accounting and financial controls and the annual independent audit of the Company's
financial statements and the Company's legal compliance and ethics programs as established by
the Management Board and the Supervisory Board. The Audit Committee has met with the
independent auditors as well as hired internal auditors. The Audit Committee after such review
and discussion with internal auditors and the independent auditors have recommended that the
audited financial statements be included in the Company's annual report on Form 20-F.
The Audit Committee held one meeting at the end of each quarter to discuss the financial status
of the Company for a total of four meetings during the last fiscal year. All members of the Audit
Committee are "independent" under the rules of the Securities and Exchange Commission
currently applicable to the Company.
AUDIT COMMITTEE REPORT
The following is the report of the Company's Audit Committee with respect to the Company's
audited financial statements for the fiscal year ended December 31, 2002.
Review With Management
The Committee has reviewed and discussed the Company's audited financial statements with
both the Management Board and the Supervisory Board.
Review and Discussions With Independent Auditors
The Committee has discussed with Kesselman & Kesselman, the Company's independent
auditors, the matters required to be discussed by SAS 61 (Communications with Audit
Committees) regarding the auditor's judgments about the quality of the Company's accounting
principles as applied in its financial reporting.
The Committee has also received written disclosures and the letter from Kesselman &
Kesselman required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees) and has discussed with Kesselman & Kesselman their
independence.
Conclusion
Based on the review and discussions referred to above, the Committee recommended to the
Company's Supervisory Board that its audited financial statements be included in the
Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2002 for filing
with the Securities and Exchange Commission.
Submitted by the Audit Committee of the Supervisory Board
Melvin Lazar, Chairman of the Audit Committee.
The aggregate fees billed to the Company for the fiscal year ended December 31, 2002 by the
principal accounting firm was $232,500 plus $22,745 for other fees for a total of $255,245.
The information contained in the foregoing report shall not be deemed to be "soliciting material"
or to be "filed" with the Securities and Exchange Commission, nor shall such information be
incorporated by reference into any future filing under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, except to the extent that the Company
specifically incorporates it by reference in such filing.
Please sign, date and return the accompanying proxy card or other form of proxy with Power of
Attorney, as applicable, in the enclosed envelope at your earliest convenience.
The Management Board
Lior Zouker
Managing Director and
Chief Executive Officer
July 7, 2003
POWER OF ATTORNEY
The undersigned,
hereby grants power of attorney to:
Lior Zouker
Stefan Vermeulen
for and in name, place and stead of the undersigned to attend the Annual General Meeting of
Shareholders of ICTS International N.V., a public company whose statutory seat and registered
office is in Amstelveen, The Netherlands, which Annual General Meeting to be held at 11:00,
local time, on Wednesday, August 6, 2003, at the offices of the Company, located at Biesbosch
225, 1181 JC, Amstelveen, The Netherlands or any adjournment or adjournments thereof, and
for and in name, place and stead of the undersigned to sign at that Annual General Meeting the
attendance register, to take part in all discussions, to make such proposals as the attorney may
deem expedient, and to exercise the right to vote attached to the shares of the undersigned as
well as all other rights which may be exercised at the Annual General Meeting on behalf of the
undersigned _______________________, and further to do and perform any and all acts relating to
the foregoing which may be useful or necessary and which the undersigned might or could or
should do if personally present, all this with full power of substitution.
Signed in , this day of 2003.
If a natural person insert:_____________________ surname, forenames, full residential address
and date of birth.
If a body corporate insert: _____________________ corporate name, place of registered office,
full business address. A power of attorney given by a body corporate must be signed by an
officer/officers duly authorized to represent the body corporate. If necessary inspect the records
of the Chamber of Commerce where the body corporate is registered, and/or its articles of
association or by--laws.
The Proposed Resolutions
Unless otherwise indicated, this Proxy confers authority to vote "FOR" for the resolutions
contained herein. The Management Board recommends a vote of "FOR" for the resolutions
contained herein. This proxy is solicited on behalf of the Management Board of ICTS
International N.V. and may be revoked prior to its exercise by a written notice to the Chief
Executive Officer of the Company.
1. To elect nine members to the Supervisory Board.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. Adoption of the English language to be used for the annual accounts and annual reports
of the Company.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
8
3. Adoption of the annual accounts of the fiscal year 2002.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Authorization for repurchase of shares.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
NOTE: Signature(s) should follow exactly the name(s) on the stock certificate. Executor,
administrator, trustee or guardian should sign as such. If more than one trustee, all
should sign. ALL JOINT OWNERS MUST SIGN.
Dated: ____________, 2003
By:________________________
Name:_____________________
Title:_______________________
ICTS INTERNATIONAL N.V.
Audit Committee & Investment Procedures
Audit Committee Charter
There shall be a committee of the Supervisory Board known as the Audit Committee (hereinafter "The
Committee") The primary function of the Committee shall be to assist the Supervisory Board in fulfilling
its oversight role regarding the Company's financial reporting process, its system of internal control and
its compliance with applicable laws, regulations and company policies. The Committee's goal is to
provide an open avenue of communication between the independent auditors, internal auditors and the
Supervisory Board. The regular activities of the Committee are as follows:
Membership and Meetings of Audit Committee
1. The Committee shall consist of no less than three members. Each member must be an
independent director and cannot have worked for ICTS within the past three years. Each
member must be able to read and understand fundamental financial statements and one
member must have employment experience in finance or accounting, a certification in
accounting, or comparable financial management experience. No member may accept any
consulting, advisory or any other compensatory fees from the company other than fees for
service on the Supervisory Board and its committees. One member shall be designated
"Chairperson," and he or she shall have the authority to appoint subcommittees as
necessary.
2. The Committee shall meet at least four times per year or more frequently as
circumstances require; the Committee may ask members of Management or others to
attend meetings and provide pertinent information as necessary. All meetings related to
annual audited financial statements require members to appear in person. All other
meetings may take place over the phone.
3. A majority of Committee members constitutes a quorum and can take action for any
meeting.
4. The Committee will meet any time prior to Management releasing a financial report.
Management is to provide all members of the Committee with copies of this report at
least seven days before the scheduled meeting. The Committee is required to provide
Management with its comments on the report within three days of its meeting.
5. For the annual audit meeting, those present will include the independent auditors, the
CFO, and company counsel. For the unaudited meetings, which are to take place three
times per year, the CFO and those independent auditors who are available shall be
present.
6. In a desire to foster a proactive element in the Committee, whenever a Committee member
believes a meeting is necessary, he/she may call such a meeting, which is to take place
within ten days of the notification of all members.
7. All minutes of the Committee will be distributed as a draft to all the participants, for
receipt of their comments, within seven days of the meeting. If anyone has comments to
the draft, these should be submitted within seven days of receiving the draft. If no
comments are received or all the comments received are acceptable, the Chairperson of
the Committee will sign off on the minutes and distribute them to all Committee
members. If there remain open points, these will be discussed and finalized at the next
meeting.
Independent Auditors and Financial Reports
1. The Committee shall be responsible for the hiring and firing of both independent and
internal auditors and determining their compensation.
A. When hiring an auditor, the Committee shall consider:
(i) The auditor's resume;
(ii) The quality control procedures implemented by the auditor; and
(iii) A report by the auditor describing any material issues raised in the
auditor's most recent quality control review and the steps that the auditor
is taking to respond to any such issues.
B. A majority of the Committee must agree to hire a particular auditor.
C. A majority is required to fire an auditor. If the Committee is split as to whether to
fire an auditor, the Supervisory Board retains the final vote.
D. When determining compensation, the Committee shall consider:
(i) The adequacy of staffing of the audit;
(ii) The experience levels of the auditors assigned to the audit;
(iii) The percentage of the total audit hours actually spent by the more
experienced partner and manager; and
(iv) The going rate in the industry.
2. Auditors must give a status of independence as defined by U.S. federal law.
3. Auditors must be registered with the Public Company Accounting Oversight Board.
4. Auditors are to report directly to the Committee, which is required to pre-approve all
auditing services .
5. The Committee is to meet independently with the independent auditors and with the CFO
and the independent auditors to discuss the audit scope and plan of both the independent
and internal auditors to assure completeness of coverage, reduction of redundant efforts
and efficient use of audit resources.
6. The independent auditors and the CFO are to meet with business-unit CEOs and
controllers for the presentation of an in-depth analysis of the results and activities of the
business units. A memorandum of the results of this meeting is to be provided to the
Committee.
7. Before interim financial reports are released to the public or filed with the SEC, the
Committee is to review them with the independent auditors and the CFO.
8. Auditors are to describe to the Committee:
A. All critical accounting policies and practices to be employed in connection with
the financial statements;
B. All alternative treatments of financial information under GAAP that have been
discussed with management, the ramifications of the use of the alternative
treatments and disclosures, and the treatment preferred by the auditor; and
C. All other material written communications between the auditor and management,
specifically including any management letter and any schedule of unadjusted
differences.
In the event that the Committee disagrees with the auditors' policies and practices, it shall have
the authority to insist that different policies and practices be implemented.
9. The Committee is to request from the auditors "Management Letter Comments"
highlighting any ways the auditors believe that the company's internal controls, policies
and financial disclosures can be improved. The Committee shall also ask auditors to
point out any possible risks or exposures the Company faces and to assess the steps
management has taken to minimize such risks to the Company. Within seven days of
receipt of such reports, the Committee is to meet with the auditors to discuss the
comments. The Committee is required to provide Management with a summary of these
discussions within seven days.
10. Independent auditors are to also assess the appropriateness and acceptability of
accounting principles and financial disclosure practices used or proposed to be used by
the Company. The Committee should also seek the auditors' comments on the degree of
aggressiveness or conservatism of the Company's accounting principles and underlying
estimates. The auditors are to supply their reasoning for all comments.
11. The Committee is to review with Management and the independent auditors the results of
annual audits and related comments in consultation with other committees as deemed
appropriate, including:
A. The annual financial statements, accompanying footnotes and the independent
auditors' reports thereon.
B. Any significant changes required in the independent auditors' audit plans.
C. Any difficulties or disputes encountered during the course of the audit.
D. Other matters related to the conduct of the audit, which are to be communicated to
the Committee under generally accepted auditing standards.
Determine, as it relates to new transactions or events, the auditors' reasoning for the
appropriateness of the accounting principles and disclosure practices adopted by management.
12. Any disagreements between management and the auditors regarding financial reports shall
be resolved by the Committee.
13. Management is to provide the results of the annual audits of directors' and officers'
expense accounts, and management perquisites prepared by the internal audit department
and the independent auditors, respectively.
14. The independent auditors are to be available to the Supervisory Board at least annually.
Internal Auditors
(Numbers 1, 3, 4, 5, 8, 9, 12 & 13) of "Independent Auditors and Financial Reports" are also
applicable to this section)
1. The Committee shall have the task of establishing a periodic workplan for the
internal auditor.
2.. The Committee is to meet with the internal auditor, the Management Board and the
CFO to review:
A. Significant internal audit findings during the year and management's responses to
them.
B. Any difficulties encountered in the course of internal audit work, including any
restrictions on the scope of activities or access to required information.
C. Any changes required in the planned scope of the internal audit plan.
D. The internal audit department charter, budget and staffing.
Certification of Quarterly and Annual Reports
1. The Committee is to assure that the CEO and the CFO certify the contents of the
Company's quarterly and annual reports.
2. These certifications are to include statements by the CEO and CFO that:
A. He or she has read the report;
B. To his or her knowledge, the information in the report is true in all important
respects as of the last day of the period covered by the report; and
C. As of the last day of the period covered by the report, the report contains all
information about the company that he or she is aware of and that he or she
believes is important to a reasonable investor.
(i) For the purposes of these certifications, information is considered
"important to a reasonable investor" if:
1. There is a substantial likelihood that a reasonable investor would
view the information as significantly altering the total mix of
information in the report; and
2. The report would be misleading to a reasonable investor if the
information was omitted from the report.
D. He or she is responsible for establishing and maintaining internal controls, that he
or she has designed the controls to ensure that material information is made known
to him or her, particularly during the period in which the reports are being
prepared, that he or she has evaluated the effectiveness of the controls within 90
days of the report, and has presented in the report his or her conclusions as to the
effectiveness of the controls based on that evaluation (See section on Attestations
in Conjunction with Financial Reports).
E. He or she has disclosed to the auditors and the Committee significant deficiencies
in the internal controls and any fraud by persons with a significant role in the
system of internal controls (See section on Attestations in Conjunction with
Financial Reports).
F. The reports fully comply with the Securities Exchange Act of 1934 and the
information fairly presents, in all material respects, the company's financial
condition and results of operations and that there is compliance with the relevant
securities laws.
G. This certification statement was reviewed with the Committee.
Attestations in Conjunction with Financial Reports
1. The Committee shall ensure that management files an attestation report on internal
controls along with the annual reports. This report is to state the responsibility of
management for establishing and maintaining adequate internal control structures and
procedures for financial reporting. It is also to include an assessment of the effectiveness
of that control structure and those procedures as of the end of the fiscal year.
2. The auditor is required to report on management's assessment of the company's internal
controls under the attestation standards established by the Public Company Accounting
Oversight Board. This attestation report must include:
A. The auditor's findings;
B. An evaluation of whether the internal control structure and procedures include
maintenance of records that accurately and fairly reflect the company's
transactions and disposition of assets;
C. Whether there is reasonable assurance that transactions are recorded as necessary
to permit the preparation of financial statements in accordance with GAAP and are
made in accordance with proper authorization by management and directors;
D. A description of material weaknesses in internal controls found on the basis of the
testing done under the attestation standards; and
E. Whether there has been any material noncompliance with the company's internal
control policies and procedures.
Non-Audit Services and Committee Pre-Approval
1. An auditor may not provide client specific non-audit services, including:
A. Bookkeeping or other services related to the accounting records or financial statements of
the Company;
B. Financial information systems design and implementation;
C. Appraisal or valuation services, fairness opinions, or contribution-in-kind reports;
D. Actuarial services;
13
E. Internal audit outsourcing services;
F. Management functions or human resources;
G. Broker or dealer, investment adviser, or investment banking services;
H. Legal services and expert services (not including tax services) unrelated to the audit; and
I. Any other service that the Public Company Accounting Oversight Board determines by
regulation is impermissible.
2. For any non-audit service not listed above as prohibited, the Committee may grant pre-approval
for an auditor to conduct that service.
A. One member of the Committee shall be designated the task of pre-approving all non-audit
services, subject to the review of the Committee as a whole.
B. Pre-approval for a non-audit service is not to be granted earlier than one year prior to the
commencement of the service.
C. The Committee may pre-approve more than one non-audit service per meeting, provided
that each service is specifically identified.
3. Any pre-approval of non-audit services to be provided by the Company's auditors must be
disclosed in the Company's SEC filings.
Company Investments
1. The Company will have an annual investment plan where the Supervisory Board shall
have the responsibility of determining a separate budget for both core and non-core
investments.
2. For any investment in the core business of up to $5 million per year, the Company
Management together with the Chairman of the Board is authorized to make the final decision.
A. For such a transaction, Management shall provid
a summary of the transaction
for distribution to the members of the Supervisory Board at the first Supervisory
Board meeting succeeding the completion of the transaction. Management shall
also provide this summary in advance to the Committee, which is to give its
comments to the Supervisory Board within seven days of the Board's
aforementioned meeting.
B. Management will advise the Board Members, in
writing, of the acquisition, as
early as possible following the final decision.
3. For all investments in the core business exceeding $5 million per year, as well as all investments
not in the core business, Management shall not have discretionary authority and the transaction
must be approved by the Supervisory Board.
A. Management shall conduct a full due diligence investigation of the proposed investment,
utilizing legal counsel, auditors and advisors as management deems necessary.
B. In deciding whether or not to approve such a transaction, the Supervisory Board shall
seek the comments of the Committee, which is to analyze the reports and provide the
Supervisory Board woth its recommendations within seven days of receipt of the reports.
C. Prior to Supervisory Board consideration the group responsible for due diligence
and negotiation shall prepare a detailed memo on the transaction which should be
disseminated prior to the matter being presented to the Supervisory Board by way
of the Committee for approval.
D. For such transactions, Management shall prepare a summary of the proposed
transaction for distribution to and approval by the members of the Supervisory Board
prior to consummation of the transaction. Such summary shall contain: (a) company
profile; (b) reason for investment; (c) the strategic fit; (d) economic analysis, including
prospects and expected returns; (e) financial structure, including guarantees, collateral
and other off balance sheet liabilities; (f) risk exposure; (g) organizational structure, and
how and where it will be placed within the company.
With respect to investments whether non-operating or non-core, management should periodically
provide results of operations of these investments as well as information concerning forecasts,
business issues and financial matters deemed necessary and appropriate in order for the Audit
Committee to properly evaluate the investment.
Director and Officer Investments
1. Reports of stock transactions by company directors and executive officers, as well as beneficial
owners of more than 10% of a company's stock, must be filed within two business days. Such
reports must also be filed electronically and be posted on the Company's web site.
2. The CEO and CFO must disgorge bonuses and other equity or incentive-based compensation
they receive or any profits from stock sales they make within the 12 months following the
issuance or filing of financial documents which are later found to require restatement as a result
of misconduct.
3. Executive officers and directors may not trade the company's securities during a pension fund
blackout period.
4. Nothwithstanding any loans existing at the time of the passage of the Sarbanes-Oxley Act, loans
shall not be made by the Company to its officers.
Related Party Transactions
In addition to the investment procedures outlined above, the following procedures apply:
1. With respect to related party transactions, the following controls:
A. For Securities and Exchange Commission purposes on disclosure of related party
transactions a related party transaction is defined as "any transaction, or series of
similar transactions, since the beginning of the Company's last fiscal year, or any
currently proposed transaction, or series of similar transactions, to which the Company
or any of its subsidiaries was or is to be a party, in which the amount involved exceeds
$60,000 and in which any of the following persons had, or will have, a direct or indirect
material interest, naming such person and indicating the person's relationship to the
Company, the nature of such person's interest in the transaction(s), the amount of such
transaction(s) and, where practicable, the amount of such person's interest in the
transaction(s):
(i) Any director or executive officer of the Company;
(ii) Any nominee for election as a director;
(iii) Any security holder who is known to the Company to own of record or
beneficially more than five percent of any class of the Company's voting
securities; and
(iv) Any member of the immediate family of any of the foregoing persons.
2. Numbers 3(B) and 2(C) under "Company Investments" shall also be controlling as
to this section.
3. Management shall negotiate the proposed terms and conditions of the investment. These
negotiations shall not include the related parties interested in the transaction. The transaction
should be negotiated on behalf of the Company by management who is not interested in the
transaction or if no management meets this criteria then by the independent directors (assuming
they have no interest in the transaction). All members of the Audit Committee are to receive
continuous updates of the progress of the negotiations. In the negotiation process the fairness
and reasonableness of the transaction to the Company and its shareholders is to be the paramount
consideration.
4. Whether or not a fairness opinion should be obtained should be determined by the
Independent Directors of the Supervisory Board and should be decided based upon the nature of
the transaction and its size and its proposed effect on the Company. A fairness opinion, if
obtained, should be from an independent investment banking firm, chosen by the Committee,
which describes the transaction, the terms and concludes that the transaction is fair and
reasonable to the Company and its shareholders. There is no "deminimis rule" as to when a
fairness opinion need not be obtained.
5. All related party transactions must be approved by the majority of the independent
directors of the company. Interested directors shall not vote.
6. Whether or not a transaction should go before the shareholders depends on
A. Local law requirements for the particular transaction such as a merger; or
B. At the discretion of the Supervisory Board in the event it is determined that the
transaction is material to the business of the company.
Other Activities
1. The Committee is to periodically discuss with legal counsel any regulatory matters that may
have a material impact on the Company financial statements, compliance policies and programs.
It is to pay special attention to any changes in the law.
2. The Committee is to meet annually and as required update its charter.
3. The Committee shall also meet annually to discuss company strategy, with issues including, but
not limited to: (a) general aims; (b) future plans; (c) market forecast; and (d) core and non-core
business.
4. Conduct or authorize investigations into any matters within the Committee's scope of
responsibilities; the Committee shall be empowered to retain independent counsel and other
professionals to assist in conducting any investigation.
5. Review and concur with the appointment of the CFO.
6. The Committee shall establish procedures for receiving and addressing complaints regarding
accounting, auditing and internal controls. A mechanism by which employees can submit their
concerns anonymously shall be included.
7. The Committee shall distribute quarterly checklists to the various business units in order to
ensure compliance with all financial requirements at the department levels. Such checklists shall
require the same information required from the CEO and CFO in their certifications of quarterly
and annual reports (see section regarding same).
A copy of the
Notice of Annual General Meeting of Shareholders (the "Notice"), which contains
the agenda for the Annual Meeting (the "Agenda"), accompanies this Proxy
Statement.
The Company's audited consolidated and simple financial statements for the
financial year ended December 31, 2004, expressed in U.S. Dollars and prepared
in accordance with United States and Dutch generally accepted accounting
principles (hereinafter, the "Annual Accounts"), and the Company's 2004 annual
report (the "Annual Report"), is being mailed with this Proxy Statement.
It is proposed at the Annual Meeting to adopt resolutions approving the
following proposals (the "Proposals"):
1 Adoption of the English language to be used for the annual accounts and
annual reports of the Company (Item 5 of the Agenda).
2. Adoption of the Annual Accounts (Item 6 of the Agenda)
3. Election of two Managing Directors (Item 7 of the Agenda)
4. Election of seven Supervisory Directors (Item 8 of the Agenda)
Pursuant to the Articles of Association of the Company and Netherlands
law, copies of the Annual Accounts, the Annual Report and the information
required under Section 2:392 of the Dutch Civil Code and the report of the
Supervisory Board, written in accordance with the Articles of Association of the
Company, are open for inspection by the shareholders and other persons entitled
to attend meetings of shareholders at the office of the Company at Biesbosch
225, 1181 JC, Amstelveen, The Netherlands, from the date hereof until the close
of the Annual Meeting.
2
Since the Company is a "foreign private issuer" under United States
securities laws, the solicitation of proxies for use at the Annual Meeting is
not subject to the proxy rules contained in Regulation 14A promulgated under the
United States Securities Exchange Act of 1934, as amended.
This solicitation is made by the Management Board and the cost of the
solicitation will be borne by the Company. The Company will reimburse brokerage
firms, fiduciaries and custodians for their reasonable expenses in forwarding
solicitation materials to beneficial owners. The Company is mailing this Proxy
Statement, the Notice, the Annual Report, the form of proxy and the Power of
Attorney to the shareholders on or about August 17, 2005.
Voting Securities and Voting Rights
At the close of business on August 17, 2005, the issued and outstanding
voting securities of the Company consisted of 6,672,980 Common Shares. The class
of Common Shares is the only class of voting stock of the Company. Shareholders
may exercise their shareholder rights to vote only the Common Shares registered
in their name on August 17, 2005, the record date for the Annual Meeting.
Shareholders owning and holding approximately 60% of the issued and
outstanding Common Shares of the Company have indicated that they will vote FOR
items 5, 6, 7 and 8 of the Agenda.
The Agenda set forth in the Notice was proposed by the Management Board
and approved by the Supervisory Board.
A registered holder of Common Shares may cast one vote per share at the
Annual Meeting. In accordance with Article 18 of the Articles of Association of
the Company, resolutions may be adopted only when a quorum of at least 50%
percent of the outstanding shares entitled to vote is present or represented at
the Annual Meeting, and adoption of a resolution requires an absolute majority
of the votes cast at the Annual Meeting.
Common Shares cannot be voted at the Annual Meeting unless the registered
holder is present in person or is represented by a written proxy. The Company is
incorporated in The Netherlands and, as required by the laws of The Netherlands
and the Company's Articles of Association, the Annual Meeting must be held in
the Netherlands. Shareholders who are unable to attend the Annual Meeting in
person may authorize the voting of Common Shares at the Annual Meeting by
completing and returning the enclosed power of attorney and proxy card naming
Avraham Dan and Ran Langer as proxyholders. If the power of attorney and proxy
in the enclosed form is duly executed and returned prior to the Annual Meeting,
all Common Shares represented thereby will be voted, and, where specifications
are made by the holder of Common Shares on the form of proxy, such proxy will be
voted by the proxyholders in accordance with such specifications.
If no specification is made in the power of attorney and proxy, the power
of attorney and proxy will be voted by the proxyholders FOR items 5, 6, 7 and 8
of the Agenda.
In the event a shareholder wishes to use any other form of power of
attorney and proxy, such power of attorney and proxy shall be voted in
accordance with the specification given therein, provided that (i) such power of
attorney and proxy states the number of registered Common Shares held by such
shareholder, (ii) the Common Shares for which the power of attorney and proxy is
given are registered in the name of the shareholder on August 17, 2005, and
(iii) such proxy enables the person named therein to vote the Common Shares
represented thereby either in favor of or against the Proposals, or to abstain
from voting, as applicable. The
3
proxyholder shall present the duly executed proxy together with the enclosed
form of Power of Attorney and Proxy signed by the registered shareholder.
Right of Revocation
Any shareholder who has executed and delivered a power of attorney and
proxy to the Company and who subsequently wishes to revoke such power of
attorney and proxy may do so by delivering a written notice of revocation to the
Company at its address set forth above, Attention: Chief Executive Officer, at
any time prior to the Annual Meeting.
Beneficial Ownership of Securities Owners
The following table sets forth below information regarding the beneficial
ownership (as determined under U.S. securities laws) of the Common Shares of the
Company, as of August 17, 2005, by each person who is known by the Company to
own beneficially more than 5% of the outstanding Common Shares:
- --------------------------------------------------------------------------------
Percent of
Name of Five Amount Beneficially Common Shares
Percent Shareholders Owned (a) Outstanding (b)
- --------------------------------------------------------------------------------
Atzmon Family Trust (1)(2) 4,198,500 62%
- --------------------------------------------------------------------------------
All officers and directors
as a group (9 persons) 4,334,500 64%
- --------------------------------------------------------------------------------
(a) The amount includes common shares owned by each of the above, directly
or indirectly and options immediately exercisable or that are exercisable within
60 days from July 15, 2005.
(b) As to each shareholder, the percentage is calculated using the amount
beneficially owned by such shareholder (as determined in accordance with (a)
above) divided by the number of total outstanding common shares and the shares
issuable pursuant to the exercise of options exercisable within 60 days from
July 15,2005, if any held by such shareholder. Common shares subject to options
that are immediately exercisable or exercisable within 60 days of July 15, 2005
are deemed outstanding for computing the ownership percentage of the shareholder
holding such options, but are not deemed outstanding for computing the ownership
of any other shareholder.
1. Harmony Ventures BV, owns directly and indirectly approximately 60% of
the issued and outstanding Common Shares. A family trust for the benefit of the
family of Mr. Menachem J. Atzmon (the "Atzmon Family Trust") owns 90% of Harmony
Ventures BV and the Estate of Ezra Harel owns 10% of the outstanding shares of
Harmony Ventures BV and both may be deemed to control Harmony Ventures BV. Mr.
Atzmon disclaims any beneficial interest in the Atzmon Family Trust. Harmony
Ventures BV and the Atzmon Family Trust may be able to appoint all the directors
of ICTS and control the affairs on ICTS.
2. Includes 250,000 of 550,000 options to Menachem Atzmon (Chairman of the
Board) of which 250,000 shall be immediately vested and 300,000 options to be
vested equally over the next three years. With respect to the Options for
200,000 shares they are granted in lieu of a current salary for Mr. Atzmon.
Options are exercisable at $1.35 per share representing the fair market value on
the date of grant.
ITEM FOUR OF THE AGENDA:
REPORT OF THE AUDIT COMMITTEE
The Audit Committee consists of Mr. Philip M. Getter (Chairman), Lynda Davey and
Gordon Hausmann. The Audit Committee and the Supervisory Board have adopted an
Audit Committee Charter which is attached hereto as Exhibit A. The Charter
outlines the duties of the Audit Committee in relation to its responsibilities
of overseeing management's conduct of the Company's financial reporting process,
including the selection of the Company's outside auditors and the review of the
financial reports and other financial information provided by the Company to any
governmental or regulatory body, the public or other users thereof, the
Company's systems of internal accounting and financial controls and the annual
independent audit of the Company's financial statements and the Company's legal
compliance and ethics programs as established by the Management Board and the
Supervisory Board. The Audit Committee has met with the independent auditors as
well as hired internal auditors. The Audit Committee after such review and
discussion with internal auditors and the independent auditors have recommended
that the audited financial statements be included in the Company's annual report
on Form 20-F.
4
The Audit Committee held one meeting at the end of each quarter to discuss the
financial status of the Company for a total of four meetings during the last
financial year. All members of the Audit Committee are "independent" under the
rules of the Securities and Exchange Commission currently applicable to the
Company.
The Company has also adopted a Code of Ethics for Principal Executive Officers
and Senior Financial Officers which is attached hereto as Exhibit B.
ITEM FIVE OF THE AGENDA:
ADOPTION OF THE ENGLISH LANGUAGE TO BE USED FOR THE ANNUAL ACCOUNTS AND
ANNUAL REPORTS OF THE COMPANY
Pursuant to Section 2:362, Paragraph 7 of the Dutch Civil Code, the annual
accounts of a Netherlands company such as the Company must be prepared in the
Dutch language, unless the General Meeting of Shareholders resolves to use
another language. Due to the international structure of the Company, the
Management Board proposes that the annual accounts and the annual reports of the
Company be prepared in the English language until the General Meeting of
Shareholders has resolved otherwise.
A majority of the votes cast is required for this proposal, provided that a
quorum of at least 50% percent of the outstanding shares entitled to vote is
present or represented at the Annual Meeting.
THE SUPERVISORY BOARD AND MANAGEMENT RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR
" THE ADOPTION OF THE ENGLISH LANGUA GE (ITEM 1 ON THE POWER OF ATTORNEY AND
PROXY).
ITEM SIX OF THE AGENDA: ADOPTION OF ANNUAL ACCOUNTS
The Annual Accounts are submitted to the Company's shareholders in the English
language.
Copies of the Annual Accounts, the Annual Report, which contains the information
required under Section 2:392 of the Dutch Civil Code, and the report of the
Supervisory Board are available for inspection by the Company's shareholders and
other persons entitled to attend meetings of shareholders at the office of the
Company at Biesbosch 225, 1181 JC, Amstelveen, The Netherlands, from the date
hereof until the close of the Annual Meeting.
In accordance with Article 20 of the Articles of Association of the Company, the
Supervisory Board has determined to retain all net profit of the financial year
2004.
Adoption of the Annual Accounts also implies the approval by the shareholders of
the Company for the extension of the period prescribed by Dutch law for the
preparation of the Annual Accounts within five months after the financial year
ended on December 31,2004.
A majority of the votes cast is required for the adoption of the Annual
Accounts, provided that a quorum of at least 50% percent of the outstanding
shares entitled to vote is present or represented at the Annual Meeting.
THE SUPERVISORY BOARD AND MANAGEMENT RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
THE ADOPTION OF ANNUAL ACCOUNTS (ITEM 2 ON THE POWER OF ATTORNEY AND PROXY).
5
ITEM SEVEN OF THE AGENDA:
ELECTION OF MANAGING DIRECTORS
At the Annual Meeting, Mr. Avraham Dan and Ran Langer are to be elected to
serve as Managing Directors until their successors have been elected.
Messrs. Dan and Langer have consented to be named and have indicated their
intent to serve if elected. The Company has no reason to believe that these
nominees are unavailable for election. However, if a nominee becomes unavailable
for any reason, the persons named as proxies may vote for the election of such
person or persons for such office as the Supervisory Board of the Company may
recommend in the place of such nominee. It is intended that the proxies, unless
marked to the contrary, will be voted in favor of the election of Messrs. Dan
and Langer.
THE SUPERVISORY BOARD AND MANAGEMENT RECOMMENDS THAT THE SHAREHOLDERS VOTE
"FOR" THE ELECTION OF THE FOLLOWING NOMINEES (ITEM 3 ON THE POWER OF ATTORNEY
AND PROXY).
Avraham Dan is a CPA (Isr). joined ICTS in June 2004 as Chief Financial
Officer. In September 2004 to the present he became a Managing Director. From
1995 to 2001 he was Chief Executive Office and a Director of Pazchem Limited, an
Israeli chemical company. Mr. Dan holds an MBA degree from Pace University, NY.
Ran Langer joined ICTS in 1988 through 1998 as General Manager of the German
subsidiaries of ICTS. From 1998 to the present, he serves as General Manager of
Seehafen Rostock Umschlagsgesellschaft mbH, the operator of the Seaport in
Rostock, Germany. Mr. Langer became a Managing Director of ICTS in September
2004.
ITEM EIGHT OF THE AGENDA:
ELECTION OF SUPERVISORY DIRECTORS
At the Annual Meeting, seven members of the Supervisory are to be elected
to serve until their successors have been elected and qualified. The nominees to
be voted on by Shareholders are Messrs. Menachem Atzmon, M. Albert Nissim, Elie
Housman, Gordon Hausmann, David W. Sass, Philip M. Getter and Lynda Davey.
All nominees have consented to be named and have indicated their intent to
serve if elected. The Company has no reason to believe that any of these
nominees are unavailable for election. However, if any of the nominees become
unavailable for any reason, the persons named as proxies may vote for the
election of such person or persons for such office as the Supervisory Board of
the Company may recommend in the place of such nominee or nominees. It is
intended that the proxies, un less marked to the contrary, will be voted in
favor of the election of Messrs. Menachem Atzmon, M. Albert Nissim, Elie
Housman, Gordon Hausmann, David W. Sass, Philip M. Getter and Lynda Davey.
Menachem J. Atzmon is a CPA (Isr). Mr. Atzmon is a controlling shareholder
of Harmony Ventures B.V. Since 1996 he has been the managing director of
Albermale Investment Ltd. and Kent Investment Holding Ltd., both investment
companies. Since January 1998 he has served as CEO of Seehafen Rostock. He has
been a member of the Supervisory Board of ICTS since 1999.
M. Albert Nissim has served as Secretary of ICTS since January 1994 and
became a member of the Supervisory Board in 2002. Mr. Nissim also serves as
President of ICTS - USA, Inc. From 1994 to 1995, he worked as the managing
director of ICTS and from 1990 to the present, he has been Vice-President and a
director of Tuffy Associates. Mr. Nissim has been the President of Pioneer
Commercial Funding Corp. ("Pioneer") since January 1997 and also serves as the
Chairman.
Elie Housman has served as Chairman of Inksure Technologies, Inc. since
February 2002. Mr. Housman was a principal at Charterhouse Group International,
a privately held merchant bank, from 1989 until June 2001. At Charterhouse, Mr.
Housman was involved in the acquisition of a number of companies with total
sales of several hundred million dollars. Mr. Housman was the Chairman of Novo
Plc. in London, a leading company in the broadcast storage and services
industry. He is also a director of EUCI Career Colleges, Incorporated, which is
listed no the Nasdaq Small Cap Market and the Boston Stock Exchange and Top
Image System, Ltd. At present, Mr. Housman is a director of a number of
privately held companies in the United States. He became a member of the
Supervisory Board of ICTS in 2002.
6
Gordon Hausmann is the senior partner of his own law firm which he founded
in London 24 years ago. He specializes in business finance and banking law. He
holds office as a Board Member of the UK subsidiaries of various quoted
companies, Company Secretary of Superstar Holidays Ltd., a subsidiary of El Al
Airlines Ltd., Director of Dominion Trust Co. (UK) Ltd., associated with a
private Swiss Banking Group, and a Governor of the Hebrew University.
David W. Sass for the past 44 years has been a practicing attorney in New
York City and is currently a senior partner in the law firm of McLaughlin &
Stern, LLP. He has been a director of ICTS since 2002. He is also corporate
secretary and a director of Pioneer Commercial Funding Corp. Mr. Sass became a
director of Inksure Technologies, Inc. in 2003, a company which develops,
markets and sells customized authentication systems designed to enhance the
security of documents and branded products and to meet the growing demand for
protection from counterfeiting and diversion. He is also a director of several
privately held corporations
Philip M. Getter, since 2000 is a partner of DAMG Capital, LLC Investment
Bankers. Prior thereto he was most recently head of Investment Banking and a
member of the board of directors of Prime Charter, Ltd. He has more than thirty
years of corporate finance experience. Having served as Administrative Assistant
to the Director of United States Atomic Energy Commission from 1958 to 1959, he
began his Wall Street career as an analyst at Bache & Co. in 1959. He was a
partner with Shearson, Hammill & Company from 1961 to 1969 and a Senior Partner
of Devon Securities, an international investment banking and research boutique
from 1969 to 1975. Mr. Getter was a member of the New York Society of Security
Analysts. From 1975 to 1983 he was President and CEO of Generics Corporation of
America, a public company that was one of the largest generic drug manufacturers
in the United States. As Chairman and CEO of Wolins Pharmacal from 1977 to 1983
he led the reorganization and restructuring one of the oldest and largest direct
to the profession distributors of pharmaceuticals. He has been a member of the
League of American Theatres and Producers, Advisory Board of the American
Theatre Wing, Trustee of The Kurt Weill Foundation for Music, a member of the
Tony Administration Committee and has produced for Broadway, television and
film. He writes frequently concerning the communications, education and
entertainment industries. Mr. Getter received his B.S. in Industrial Relations
from Cornell University. He is a member of several industry organizations and
serves on various boards of both public and private organizations and is
Chairman of the Audit Committees of EVCI Career Colleges, Inksure Technologies,
Inc. as well as the Company.
Lynda Davey is Chief Executive Officer of Avalon Group, Ltd. a private
investment banking firm she co- founded in 1992. She also serves as Chairperson
of Avalon Securities, Inc., a NASD member broker-dealer, and NY Venture Space,
LLC, a provider of interim office space. From 1988 throughout 1991, Ms. Davey
was Managing Director of The Tribeca Corporation, a New York based buyout firm.
Prior to 1988, Ms. Davey was Vice President in the corporate finance department
of Salomon Brothers Inc. She is a director of Tuffy Associates Corp. Ms. Davey
also serves on the Advisory Council of the Center for Women's Business Research
and Retail Finance Group of Wells Fargo Bank. She became a member of the
Supervisory Board of ICTS in 2002.
THE SUPERVISORY BOARD AND MANAGEMENT RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
THE ELECTION OF SUPERVISORY DIRECTORS (ITEM 4 ON THE POWER OF ATTORNEY AND
PROXY).
7
AUDIT COMMITTEE REPORT
The following is the report of the Company's Audit Committee with respect to the
Company's audited financial statements for the fiscal year ended December 31,
2004.
Review With Management
The Committee has reviewed and discussed the Company's audited financial
statements with both the Management Board and the Supervisory Board.
Review and Discussions With Independent Auditors
The Committee has discussed with Goldstein Golub Kessler LLP, the Company's
independent auditors, the matters required to be discussed by SAS 61
(Communications with Audit Committees) regarding the auditor's judgments about
the quality of the Company's accounting principles as applied in its financial
reporting.
The Committee has also received written disclosures and the letter from
Goldstein Golub Kessler LLP required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees) and has discussed with
Goldstein Golub Kessler LLP their independence.
Conclusion
Based on the review and discussions referred to above, the Committee recommended
to the Company's Supervisory Board that its audited financial statements be
included in the Company's Annual Report on Form 20-F for the fiscal year ended
December 31, 2004 for filing with the Securities and Exchange Commission.
Submitted by the Audit Committee of the Supervisory Board
Philip M. Getter, Chairman of the Audit Committee.
The aggregate fees billed to the Company for the financial year ended December
31, 2004 by the principal accounting firm was $393,000 plus $133,000 for other
fees for a total of $526,000.
The information contained in the foregoing report shall not be deemed to be
"soliciting material" or to be "filed" with the Securities and Exchange
Commission, nor shall such information be incorporated by reference into any
future filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent that the Company
specifically incorporates it by reference in such filing.
Please sign, date and return the accompanying proxy card or other form of proxy
with Power of Attorney, as applicable, in the enclosed envelope at your earliest
convenience.
The Management Board
Avraham Dan
Ran Langer
Managing Directors
August 17, 2005
8
EXHIBIT A
CHARTER OF THE AUDIT COMMITTEE
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This Charter of the Audit Committee (this NASDAQ Rule
"Charter") has been adopted by the Supervisory (the4350(d)(1)
Board (the "Board") of ICTS International, N.V. requires that
"Company"). The Audit Committee (the "Committee") that the Committee
shall review and reassess this Charter annually conduct an annual
and recommend any proposed changes to the Board evaluation of its Charter.
for approval.
A. Purpose
The purpose of the Committee is to assist NASDAQ Rule 4350(d)(1)(C)
the Board in its oversight of the Company's the
accounting and financial reporting processes and
audits of the Company's financial statements,
including (i) the quality and integrity of the
Company's financial statements, (ii) the Company's
compliance with legal and regulatory requirements,
(iii) the independent auditors' qualifications and
independence and (iv) the performance of the
Company's internal audit functions and independent
auditors. In fulfilling its purpose, the Committee
shall maintain free and open communication with
the Company's independent auditors, internal
auditors and management.
B. Duties and Responsibilities
In furtherance of its purpose, the Committee
shall have the following duties and
responsibilities:
1. To review major issues regarding
accounting principles, policies,
practices and judgments and financial
statement presentations, including (i)
any significant changes to the
Company's selection or application of
accounting principles, (ii) the
adequacy and effectiveness of the
Company's internal controls and (iii)
any special audit steps adopted in
light of material control
deficiencies.
2. To review analyses prepared by
management, the independent auditors
and/or others setting forth
significant financial reporting issues
and judgments made in connection with
the preparation of the financial
statements, including analyses of the
effects of alternative GAAP methods on
the financial statements.
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3. To review the effect of regulatory and
accounting initiatives and off-balance
sheet structures on the Company's
financial statements.
4. To review the type and presentation of
information to be included in the
Company's earnings press releases,
paying particular attention to any use
of "pro forma" or "adjusted" non-GAAP
information, as well as review and
discuss earnings press releases and
any financial information and earnings
guidance provided to analysts and
rating agencies.
5. To review, or oversee the review of,
internal audit functions that ensure
the appropriate control process is in
place for reviewing and approving the
Company's internal transactions and
accounting.
6. To periodically discuss with the Board
the adequacy and effectiveness of the
Company's internal controls.
7. To discuss with management and the
independent auditors the integrity of
the Company's financial reporting
processes and controls, including
policies and guidelines with respect
to risk assessment and risk management
and the Company's major financial risk
exposures and the steps management has
taken to monitor and control such
exposures.
8. To discuss with management and the
independent auditors the Company's
annual audited financial statements
and quarterly financial statements,
including the Company's disclosures
under "Management's Discussion and
Analysis of Financial Conditions and
Results of Operations," together with
the results of the independent
auditors' review prior to filing or
distribution.
9. To prepare the report required to be
included in the Company's annual proxy
statements pursuant to the proxy rules
promulgated by the United States
Securities and Exchange Commission
(the "SEC") or, if the Company does
not file a proxy statement, in the
Company's annual report.
10. To discuss with management and the
independent auditors the independent
auditors' judgments about the quality
and appropriateness of the Company's
accounting principles and underlying
estimates in its financial statements.
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11. To review and discuss with management
and the independent auditors any
correspondence with regulators or
governmental agencies and any
published reports and employee
complaints concerning financial
matters which raise material issues
regarding the Company's financial
statements or accounting policies.
12. To discuss with the independent
auditors and management, as
appropriate, any items required to be
communicated by the independent
auditors in accordance with Statement
on Auditing Standards No. 61 not
otherwise addressed in this Charter.
13. To discuss with the independent SEC Release 34-47265
auditors, prior to the filing of the Final Rule:
audit report with the SEC, reports Strengthening the
from management and the independent Commission's
auditors regarding (i) all critical Requirements
accounting policies and practices used Regarding Auditor
by the Company, (ii) all material Independence.
alternative accounting treatments
within GAAP that have been discussed
with management, including the
ramifications of the use of such
alternative treatments and the
treatment preferred by the accounting
firm and (iii) other material written
communications between the accounting
firm and management.
14. To discuss periodically with the SEC Release 34-46427 Final
Company's CEO and CFO (i) all Rule: Certification of
significant deficiencies in the design Disclosure in Companies'
or operation of internal controls Quarterly and Annual
which could adversely affect the Reports; SEC Release
Company's ability to record, process, 34-47986 Final Rule:
summarize and report financial data, Management's Report on
(ii) any significant changes in Internal Control Over
internal controls, including internal Financial Reporting and
control over financial reporting, or certification of
other factors that could significantly Disclosure in Exchange Act
affect such internal controls, Periodic Reports.
including any corrective actions with
regard to significant deficiencies and
material weaknesses and (iii) any
fraud involving management or other
employees who have a significant role
in the Company's internal controls.
15. To review the internal control reports SEC Release 34-47986 Final
of management prepared pursuant to the Rule: Management's Reports
rules and regulations of the SEC on Internal Control Over
promulgated under the Sarbanes-Oxley Financial Reporting and
Act of 2002 prior to filing with the Certification of
SEC. Disclosure in Exchange Act
Periodic Reports.
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16. To directly appoint, retain, Exchange Act Rule 10A-
compensate, evaluate and oversee the 3(b)(2), (5).
independent auditors engaged for the
purpose of preparing or issuing an
audit report or related work or
performing other audit, review or
attest services for the Company, and
to resolve any disagreements between
management and the independent
auditors. To approve in advance, or,
in the alternative, to establish and
periodically review pre-approval
policies and procedures for all audit
engagement fees and terms, including
the retention of the independent
auditors for any significant
permissible non-audit engagement or
relationship. To have direct
responsibility for the oversight of
the independent auditors. The
Committee shall inform each registered
public accounting firm performing work
for the Company that such firm shall
report directly to the Committee. The
Committee may terminate the
independent auditors in its sole
discretion. The Committee should also
take into account the opinions of
management in its dealings with the
independent auditors.
17. To annually evaluate the experience, NASDAQ Rule 4350(d)(1)(B);
qualifications, performance and SEC Release 34-47265 Final
independence of the independent Rule: Strengthening the
auditors, including their lead Commission's Requirements
partners. To assure the regular Regarding Auditor
rotation of the audit partners, Independence Regarding
including the lead and concurring Auditor Independence.
audit partners, as required by
applicable laws, rules and
regulations. To consider whether there
should be regular rotation of the
independent auditors. The Committee
should take into account the opinions
of management and the internal
auditors in its evaluation of the
independent auditors. The Committee
should present its conclusions with
respect to the independent auditors to
the full Board.
18. To obtain and review, on an annual
basis, a formal written report from
the independent auditors describing
(i) the auditing firm's internal
quality control procedures; (ii) any
material issues raised within the
preceding five (5) years by the
auditing firm's internal
quality-control reviews, peer reviews,
or any governmental or other inquiry
or investigation relating to any
independent audit conducted by the
auditing firm, and the steps taken to
deal with such issues; and (iii) all
relationships between the independent
auditors and the Company.
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19. To discuss with the independent NASDAQ Rule
auditors any disclosed relationships 4350(d)(1)(B)
between the auditors and the Company
or any other relationships that may
adversely affect the objectivity or
independence of the independent
auditor. To discuss with the
independent auditors any services
provided to the Company or any other
services that may adversely affect the
objectivity and independence of the
independent auditor. To take, or to
recommend that the full board take,
appropriate action to oversee the
objectivity and independence of the
independent auditor.
20. To review with the independent
auditors any audit problems or
difficulties, together with
management's responses, including any
restrictions on the scope of the
independent auditors' activities or on
access to requested information, and
any significant disagreements with
management.
21. To review the independent auditors'
audit plan, including its scope,
staffing, locations, reliance upon
management and general audit approach.
22. To review and approve all related NASDAQ Rule 4350(h).
party transactions for potential
conflict of interest situations on an
ongoing basis.
23. To establish clear guidelines for the SEC Release 34-47265 Final
hiring of current or former employees Rule: Strengthening the
of the Company's independent auditors. Commission's Requirements
Regarding Auditor
Independence.
24. To review and discuss with the
independent auditors the quality of
the Company's financial and auditing
personnel and the responsibilities,
budget and staffing of the Company's
internal audit functions.
25. To review with the Company's legal
counsel on a quarterly basis, or more
frequently as circumstances dictate,
any legal matters that could have a
significant impact on the Company's
financial statements or the Company's
compliance with applicable laws, rules
and regulations, any breaches of
fiduciary duties and inquiries
received from regulators or
governmental agencies.
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26. To establish and maintain procedures Exchange Act Rule 10A-
for the receipt, retention and (b)(3)
treatment of complaints regarding
accounting, internal accounting
controls or auditing matters,
including procedures for the
confidential and anonymous submission
by the Company's employees of concerns
regarding questionable accounting or
auditing matters.
27. To conduct any investigation SEC Release 34-47654 Final
appropriate to fulfill its Rule: Standards Relating
responsibilities with the authority to to Listed Company Audit
have direct access to the independent Committees.
auditors as well as anyone in the
Company.
28. To ensure that no improper influence SEC Release 34-47654 Final
on the independent directors is Rule: Standards Relating
exerted by any officers or directors to Listed Company Audit
of the Company or any person acting Committees.
under their direction.
29. To keep abreast of new accounting and Suggested
reporting standards promulgated by the Responsibilities.
Public Company Accounting Oversight
Board, the FASB, the SEC and other
relevant standard setting bodies.
30. To approve ordinary administrative Exchange Act Rule 10A-
expenses of the Committee that are 3(b)(5).
necessary or appropriate in carrying
out its duties.
31. To perform any other activities
consistent with this Charter, the
Company's by-laws and governing law,
as the Committee or the Board deems
necessary or appropriate.
C. Outside Advisors
The Committee, acting by majority vote, Exchange Act Rule 10A-
shall have the authority to retain, at the 3(b)(4), (5).
Company's expense, outside legal, accounting, or
other advisors or experts it deems necessary to
perform its duties. The Committee shall retain
these advisors without seeking Board approval and
shall have sole authority to approve related fees
and retention terms.
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D. Annual Performance Evaluation
The Committee shall conduct an annual self
performance evaluation, including an evaluation of
its compliance with this Charter. The Committee
shall report on its annual self performance
evaluation to the Board.
E. Membership
The Committee shall consist of no fewer than NASDAQ Rule 4350(d)(2)(A);
three (3) directors, as determined by the Board. SEC Release 34-47235 Final
Each Committee member shall meet the independence Rule: Disclosure Required
requirements of The NASDAQ Stock Market and of the by Section 406 and 407 of
SEC, as determined by the Board, and any other the Sarbanes- Oxley Act of
requirements set forth in applicable laws, rules 2002.
and regulations. All Committee members shall
have/a basic understanding of finance and
accounting and be able to read and understand
fundamental financial statements, including the
Company's balance sheet, income statement and cash
flow statement. At least one Committee member
shall have past employment experience in finance
or accounting, requisite professional
certification in accounting or any other
comparable experience. At least one Committee
member shall meet the requirements of an "audit
committee financial expert" as such term is
defined by the SEC.
Committee members shall be appointed
annually by a majority vote of the Board on the
recommendation of the Corporate Governance &
Nominating Committee. Each prospective Committee
member shall carefully evaluate existing time
demands before accepting Committee membership. No
director may serve as a Committee member if such
director serves on the audit committee of more
than two (2) other public companies, unless the
Board expressly determines that such service would
not impair that director's ability to serve on the
Committee and such determination is disclosed in
the Company's annual proxy statement. The
Committee members may be removed, with or without
cause, by a majority vote of the Board.
No member of the Committee shall receive SEC Release 34-47654 Final
compensation other than (i) director's fees for Rule: Standards Relating
service as a director of the Company, including to Listed Company Audit
reasonable compensation for serving on the Committees.
Committee and regular benefits that other
directors receive and (ii) a pension or similar
compensation for past performance, provided that
such compensation is not conditioned on continued
or future service to the Company.
7
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F. Chairman
The Committee shall include a Committee Determined by the Board.
chairman. The Committee chairman shall be
appointed by a majority vote of the Board. The
Committee chairman shall be entitled to chair all
regular sessions of the Committee, add topics to
the agenda and cast a vote to resolve any ties.
G. Meetings
The Committee shall meet at least one (1) Determined by the Board.
time per quarter, or more frequently as
circumstances dictate, and all Committee members
shall strive to attend all Committee meetings. At
least two Committee meetings each year shall be in
person. Directors physically present outside the
United States may participate in all other
Committee meetings by telephone or by any other
similar technology that permits instantaneous and
simultaneous communication. The Committee meetings
shall follow a set agenda established by the
Committee.
The chairman may call a Committee meeting
upon notice to each other Committee member at
least forty-eight (48) hours prior to the meeting.
A majority of the Committee members, acting in
person or by proxy, shall constitute a quorum. The
Committee shall be responsible for maintaining
minutes and other applicable records of each
Committee meeting. The Committee shall report its
actions and recommendations to the Board at the
next Board meeting after each Committee meeting.
The Committee shall meet separately in
executive sessions with management, the
independent auditors and those responsible for the
internal audit functions, on a periodic basis, to
discuss any matter that the Committee or any of
these groups believes may warrant Committee
attention.
H. Related Party Transactions
With respect to related party transactions, the following controls:
A. For Securities and Exchange Commission purposes on disclosure of
related party transactions a related party transaction is defined as "any
transaction, or series of similar transactions, since the beginning of the
Company's last fiscal year, or any currently proposed transaction, or series of
similar transactions, to which the Company or any of its subsidiaries was or is
to be a party, in which the amount involved exceeds $60,000 and in which any of
the following persons had, or will have, a direct or indirect material interest,
naming such person and indicating the person's relationship to the Company, the
nature of such person's interest in the transaction(s), the amount of such
transaction(s) and, where practicable, the amount of such person's interest in
the transaction(s):
8
(i) Any director or executive officer of the Company;
(ii) Any nominee for election as a director;
(ii) Any security holder who is known to the Company to own of
record or beneficially more than five percent of any class of
the Company's voting securities; and
(iv) Any member of the immediate family of any of the foregoing
persons.
2. Management shall conduct a full due diligence investigation of the proposed
investment, utilizing legal counsel, auditors and advisors as management deems
necessary.
3. Prior to Supervisory Board consideration the group responsible for due
diligence and negotiation shall prepare a detailed memo on the transaction which
should be disseminated prior to the matter being presented to the Supervisory
Board by way of the Committee for approval.
4. Management shall negotiate the proposed terms and conditions of the
investment. These negotiations shall not include the related parties interested
in the transaction. The transaction should be negotiated on behalf of the
Company by management who is not interested in the transaction or if no
management meets this criteria then by the independent directors (assuming they
have no interest in the transaction). All members of the Audit Committee are to
receive continuous updates of the progress of the negotiations. In the
negotiation process the fairness and reasonableness of the transaction to the
Company and its shareholders is to be the paramount consideration.
5. Whether or not a fairness opinion should be obtained should be determined by
the Supervisory Board and should be decided based upon the nature of the
transaction and its size and its proposed effect on the Company. A fairness
opinion, if obtained, should be from an independent investment banking firm,
chosen by the Committee, which describes the transaction, the terms and
concludes that the transaction is fair and reasonable to the Company and its
shareholders. There is no "de minimis rule" as to when a fairness opinion need
not be obtained.
6. All related party transactions must be approved by the majority of the
independent directors of the company. Interested directors shall not vote.
7. Whether or not a transaction should go before the shareholders depends on
A. Local law requirements for the particular transaction such as a merger;
or
B. At the discretion of the Supervisory Board in the event it is
determined that the transaction is material to the business of the company.
9
Exhibit B
ICTS INTERNATIONAL, N.V.
("ICTS")
CODE OF BUSINESS CONDUCT AND ETHICS
INTRODUCTION
We are committed to maintaining the highest standards of business conduct
and ethics. This Code of Business Conduct and Ethics (the "Code") reflects the
business practices and principles of behavior that support this commitment. We
expect every employee, officer and Managing Director and Supervisory Director to
read and understand the Code and its application to the performance of his or
her business responsibilities. References in the Code to employees are intended
to cover officers and, as applicable, Management Directors and Supervisory
Directors.
Officers, managers and other supervisors are expected to develop in
employees a sense of commitment to the spirit, as well as the letter, of the
Code. Supervisors are also expected to ensure that all agents and contractors
conform to Code standards when working for or on behalf of ICTS. Nothing in the
Code alters the employment at-will policy of ICTS.
The Code cannot possibly describe every practice or principle related to
honest and ethical conduct. The Code addresses conduct that is particularly
important to proper dealings with the people and entities with whom we interact,
but reflects only a part of our commitment.
Action by members of your immediate family, significant others or other
persons who live in your household also may potentially result in ethical issues
to the extent that they involve ICTS business. For example, acceptance of
inappropriate gifts by a family member from one of our suppliers could create a
conflict of interest and result in a Code violation attributable to you.
Consequently, in complying with the Code, you should consider not only your own
conduct, but also that of your immediate family members, significant others and
other persons who live in your household.
The integrity and reputation of ICTS depends on the honesty, fairness and
integrity brought to the job by each person associated with us. It is the
responsibility of each employee to apply common sense, together with his or her
own highest personal ethical standards, in making business decisions where there
is no stated guideline in the Code. Unyielding personal integrity is the
foundation of corporate integrity.
YOU SHOULD NOT HESITATE TO ASK QUESTIONS ABOUT WHETHER ANY CONDUCT MAY VIOLATE
THE CODE, VOICE CONCERNS OR CLARIFY GRAY AREAS. SECTION 16 BELOW DETAILS THE
COMPLIANCE RESOURCES AVAILABLE TO YOU. IN ADDITION, YOU SHOULD BE ALERT TO
POSSIBLE VIOLATIONS OF THE CODE BY OTHERS AND REPORT SUSPECTED VIOLATIONS,
WITHOUT FEAR OF ANY FORM OF RETALIATION, AS FURTHER DESCRIBED IN SECTION 16.
Violations of the Code will not be tolerated. Any employee who violates the
standards in the Code may be subject to disciplinary action, up to and including
termination of employment and, in appropriate cases, civil legal action or
referral for criminal prosecution.
LEGAL COMPLIANCE
Obeying the law, both in letter and in spirit, is the foundation of this Code.
Our success depends upon each employee's operating within legal guidelines and
cooperating with local, national and international authorities. It is therefore
essential that you understand the legal and regulatory requirements applicable
to your business unit and area of responsibility. While we do not expect you to
memorize every detail of these laws, rules and regulations, we want you to be
able to determine when to seek advice from others. If you do have a question in
the area of legal compliance, it is important that you not hesitate to seek
answers from your supervisor, a Managing Director, the General Counsel or the
Chairperson of the Audit Committee of the Supervisory Board.
Disregard of the law will not be tolerated. Violation of domestic or foreign
laws, rules and regulations may subject an individual, as well as ICTS, to civil
and/or criminal penalties. You should be aware that conduct and records,
including emails, are subject to internal and external audits, and to discovery
by third parties in the event of a government investigation or civil litigation.
It is in everyone's best interests to know and comply with our legal and ethical
obligations.
1. INSIDER TRADING
Employees who have access to confidential (or "inside") information are not
permitted to use or share that information for stock trading purposes or for any
other purpose except to conduct our business. All non-public information about
ICTS or about companies with which we do business is considered confidential
information. To use material non-public information in connection with buying or
selling securities, including "tipping" others who might make an investment
decision on the basis of this information, is not only unethical, it is illegal.
Employees must exercise the utmost care when handling material inside
information. We have adopted a separate Insider Trading Policy which you should
consult for more specific information on the definition of "material inside
information" and on buying and selling our securities or securities of companies
with which we do business.
2. DISCRIMINATION AND HARASSMENT
The diversity of ICTS's employees is a tremendous asset. We are firmly
committed to providing equal opportunity in all aspects of employment and will
not tolerate any illegal discrimination or harassment of any kind. In addition,
retaliation against individuals for raising claims of discrimination or
harassment is prohibited.
3. CONFLICTS OF INTEREST
A "conflict of interest" occurs when an individual's personal interest may
interfere in any way with the performance of his or her duties or the best
interests of ICTS. A conflicting personal interest could result from an
expectation of personal gain now or in the future or from a need to satisfy a
prior or concurrent personal obligation. We expect our employees to be free from
influences that conflict with the best interests of ICTS. Even the appearance of
a conflict of interest where none actually exists can be damaging and should be
avoided. Whether or not a conflict of interest exists or will exist can be
unclear. Conflicts of interest are prohibited unless specifically authorized as
described below.
If you have any questions about a potential conflict or if you become
aware of an actual or potential conflict, and you are not an officer or director
of ICTS, you should discuss the matter with your supervisor, a Managing
Director, the General Counsel or the Chairperson of the Audit Committee (as
further described in Section 16). Supervisors may not authorize conflict of
interest matters without first seeking the approval of a Managing Director, the
General Counsel or the Chairperson of the Audit Committee and filing with a
Managing Director, the General Counsel or the Chairperson of the Audit Committee
a written description of the authorized activity. If the supervisor is involved
in the potential or actual conflict, you should discuss the matter directly with
a Managing Director, the General Counsel or the Chairperson of the Audit
Committee. Factors that may be considered in evaluating a potential conflict of
interest are, among others:
whether it may interfere with the employee's job performance, responsibilities
or morale;
whether the employee has access to confidential information;
whether it may interfere with the job performance, responsibilities or morale of
others within the organization;
any potential adverse or beneficial impact on our business;
any potential adverse or beneficial impact on our relationships with our
customers or suppliers or other service providers;
whether it would enhance or support a competitor's position;
the extent to which it would result in financial or other benefit (direct or
indirect) to the employee;
the extent to which it would result in financial or other benefit (direct or
indirect) to one of our customers, suppliers or other service providers; and
the extent to which it would appear improper to an outside observer.
Loans to, or guarantees of obligations of, employees or their Family
Members by ICTS could constitute an improper personal benefit to the recipients
of these loans or guarantees, depending on the facts and circumstances. Some
loans are expressly prohibited by law and applicable law requires that our
Supervisory Board approve all loans and guarantees to employees. As a result,
all loans and guarantees by ICTS must be approved in advance by the Audit
Committee of the Board of Directors.
4. HEALTH AND SAFETY
ICTS strives to provide a safe and healthy work environment. Each of us
shares the responsibility for maintaining a safe and healthy workplace by
following safety and health rules and practices and reporting accidents,
injuries, unsafe equipment and any other unsafe practices or conditions.
Further, misusing controlled substances or selling, manufacturing, distributing,
possessing, using or being under the influence of illegal drugs on the job is
absolutely prohibited.
5. INTERNATIONAL BUSINESS LAWS
Our employees are expected to comply with the applicable laws in all
countries to which they travel, in which they operate and where we otherwise do
business, including laws prohibiting bribery, corruption or the conduct of
business with specified individuals, companies or countries.
The fact that in some countries certain laws are not enforced or that
violation of those laws is not subject to public criticism will not be accepted
as an excuse for noncompliance. In addition, we expect employees to comply with
U.S. laws, rules and regulations governing the conduct of business by its
citizens and corporations outside the U.S.
These U.S. laws, rules and regulations, which extend to all our activities
outside the U.S., include:
The Foreign Corrupt Practices Act, which prohibits directly or indirectly giving
anything of value to a government official to obtain or retain business or
favorable treatment, and requires the maintenance of accurate books of account,
with all company transactions being properly recorded;
U.S. Embargoes or Sanctions Programs, which restrict or, in some cases, prohibit
companies, their subsidiaries and certain employees from trading with, investing
in or traveling to certain countries identified on a list that changes
periodically (including, for example, Angola (partial), the Balkans, Burma
(partial), Cuba, Iran, Liberia, North Korea, Sudan, Syria and Zimbabwe),
specific companies or individuals, or being involved in specific activities such
as certain diamond trading and proliferation activities;
Export Controls, which prohibit or restrict the export of goods, services and
technology to designated countries, denied persons or denied entities from the
U.S., the re-export of U.S. origin goods from the country of original
destination to such designated countries, and the export of foreign origin goods
made with U.S. technology; and
Antiboycott Compliance, which prohibits U.S. companies from taking any action
that has the effect of furthering or supporting a restrictive trade practice or
boycott that is fostered or imposed by a foreign country against a country
friendly to the U.S. or against any U.S. person, and requires the reporting of
any boycott receipts.
If you have a question as to whether an activity is restricted or
prohibited, seek assistance before taking any action, including giving any
verbal assurances that might be regulated by international laws.
6. CORPORATE OPPORTUNITIES
You may not take personal advantage of opportunities that are presented to
you or discovered by you as a result of your position with us or through your
use of corporate property or information, unless authorized by your supervisor,
a Managing Director, the General Counsel or the Chairperson of the Audit
Committee. Even opportunities that are acquired privately by you may be
questionable if they are related to our existing or proposed lines of business.
Participation in an investment or outside business opportunity that is related
to our existing or proposed lines of business must be pre-approved. You cannot
use your position with us or corporate property or information for improper
personal gain, nor can you compete with us in any way.
7. MISUSE OF COMPANY COMPUTER EQUIPMENT
You may not, while acting on behalf of ICTS or while using our computing
or communications equipment or facilities, either:
access the internal computer system (also known as "hacking") or other resource
of another entity without express written authorization from the entity
responsible for operating that resource; or
commit any unlawful or illegal act, including harassment, libel, fraud, sending
of unsolicited bulk email (also known as "spam") in violation of applicable law,
trafficking in contraband of any kind, or espionage.
If you receive authorization to access another entity's internal computer
system or other resource, you must make a permanent record of that authorization
so that it may be retrieved for future reference, and you may not exceed the
scope of that authorization.
Unsolicited bulk email is regulated by law in a number of jurisdictions.
If you intend to send unsolicited bulk email to persons outside of ICTS, either
while acting on our behalf or using our computing
or communications equipment or facilities, you should contact your supervisor, a
Managing Director, the General Counsel or the Chairperson of the Audit Committee
for approval.
All data residing on or transmitted through our computing and
communications facilities, including email and word processing documents, is the
property of ICTS and subject to inspection, retention and review by ICTS in
accordance with applicable law.
Environment Compliance
Federal law imposes criminal liability on any person or company that
contaminates the environment with any hazardous substance that could cause
injury to the community or environment. Violation of environmental laws can be a
criminal offense and can involve monetary fines and imprisonment. We expect
employees to comply with all applicable environmental laws.
It is our policy to conduct our business in an environmentally responsible
way that minimizes environmental impacts. We are committed to minimizing and, if
possible, eliminating the use of any substance or material that may cause
environmental damage, reducing waste generation and disposing of all waste
through safe and responsible methods, minimizing environmental risks by
employing safe technologies and operating procedures, and being prepared to
respond appropriately to accidents and emergencies.
8. MAINTENANCE OF CORPORATE BOOKS, RECORDS, DOCUMENTS AND ACCOUNTS;
FINANCIAL INTEGRITY; PUBLIC REPORTING
ICTS is committed to producing full, fair, accurate, timely and
understandable disclosure in reports and documents that it files with, or
submits to, the Securities and Exchange Commission (the "SEC") and other
regulators. Accordingly, ICTS requires honest and accurate recording and
reporting of information. All of ICTS's books, records, accounts and financial
statements must be maintained in reasonable detail, must appropriately reflect
ICTS's transactions and must conform both to applicable legal requirements and
to ICTS's system of internal controls. By way of example, unrecorded or "off the
books" funds or assets should not be maintained, only the true and actual number
of hours should be reported, and business expense accounts must be documented
and recorded accurately.
Business records and communications sometimes become public. Accordingly,
we should avoid exaggeration, derogatory remarks, guesswork, or inappropriate
characterizations of people and companies that may be misunderstood. This
applies equally to e-mail, internal memos, and formal reports. Records should
always be retained or destroyed according to ICTS's record retention policies.
Inappropriate access or modifications to, or unauthorized destruction of,
accounting or other business records is prohibited. These prohibitions apply to
all business records and data, regardless of whether such data and records are
in written form or electronically stored.
9. FAIR DEALING
We seek to outperform our competition fairly and honestly. We seek
competitive advantages though superior performance and never through unethical
or illegal business practices. Stealing proprietary information, possessing
trade secret information that was obtained without the owner's consent, or
inducing such disclosures by past or present employees of other companies is
prohibited. Each director, officer and employee should endeavor to respect the
rights of and deal fairly with ICTS's customers, suppliers, competitors and
employees. No unfair advantage should be taken of anyone through manipulation,
concealment, abuse of privileged information, misrepresentation of material
facts, or any other unfair dealing practice.
10. GIFTS AND ENTERTAINMENT
Business entertainment and gifts are meant to create goodwill and sound
working relationships and not to gain improper advantage with customers or
facilitate approvals from government officials. Unless express permission is
received from a supervisor, a Managing Director, the General Counsel or the
Chairperson of the Audit Committee, entertainment and gifts cannot be offered,
provided or accepted by any employee unless) consistent with customary business
practices and not (a) excessive in value, (b) in cash, (c) susceptible of being
construed as a bribe or kickback or (d) in violation of any laws. This principle
applies to our transactions everywhere in the world, even where the practice is
widely considered "a way of doing business." Under some statutes, such as the
U.S. Foreign Corrupt Practices Act (further described in Section 5), giving
anything of value to a government official to obtain or retain business or
favorable treatment is a criminal act subject to prosecution and conviction.
Discuss with your supervisor, a Managing Director, the General Counsel or the
Chairperson of the Audit Committee any proposed entertainment or gifts if you
are uncertain about their appropriateness.
11. ANTITRUST
Antitrust laws are designed to protect the competitive process. These laws
generally prohibit: agreements, formal or informal, with competitors that harm
competition or customers, including price fixing and allocations of customers,
territories or contracts; agreements, formal or informal, that establish or fix
the price at which a customer may resell a product; and the acquisition or
maintenance of a monopoly or attempted monopoly through anti-competitive
conduct.
Certain kinds of information, such as pricing, production and inventory,
should not be exchanged with competitors, regardless of how innocent or casual
the exchange may be and regardless of the setting, whether business or social.
Understanding the requirements of antitrust and unfair competition laws of
the various jurisdictions where we do business can be difficult, and you are
urged to seek assistance from your supervisor, a Managing Director, the General
Counsel or the Chairperson of the Audit Committee whenever you have a question
relating to these laws.
12. PROTECTION AND PROPER USE OF COMPANY ASSETS
All employees are expected to protect our assets and ensure their
efficient use. Theft, carelessness and waste have a direct impact on our
profitability. Our property, such as office supplies, computer equipment,
buildings, and products, are expected to be used only for legitimate business
purposes, although incidental personal use may be permitted. Employees should be
mindful of the fact that we retain the right to access, review, monitor and
disclose any information transmitted, received or stored using our electronic
equipment, with or without an employee's or third party's knowledge, consent or
approval. Any misuse or suspected misuse of our assets must be immediately
reported to your supervisor, a Managing Director, the General Counsel or the
Chairperson of the Audit Committee.
13. CONFIDENTIALITY
One of our most important assets is our confidential information.
Employees who have received or have access to confidential information should
take care to keep this information confidential. Confidential information may
include business, technical, marketing, and service plans, financial
information, product specifications or architecture, source codes, engineering,
and manufacturing ideas, designs, databases, customer lists, pricing strategies,
personnel data, personally identifiable information pertaining to our employees,
customers or other individuals (including, for example, names, addresses,
telephone numbers and social security numbers), and similar types of information
provided to us by our customers, suppliers and partners. This information may be
protected by privacy, patent, trademark, copyright and trade secret laws.
You should also take care not to inadvertently disclose confidential
information. Materials that contain confidential information, such as memos,
notebooks, computer disks and laptop computers, should be stored securely.
Unauthorized posting or discussion of any information concerning our business,
information or prospects on the Internet is prohibited. You may not discuss our
business, information or prospects in any "chat room," regardless of whether you
use your own name or a pseudonym. Be cautious when discussing sensitive
information in public places like elevators, airports, restaurants and
"quasi-public" areas within ICTS[, such as cafeterias]. All ICTS emails,
voicemails and other communications are presumed confidential and should not be
forwarded or otherwise disseminated outside of ICTS, except where required for
legitimate business purposes.
In addition to the above responsibilities, if you are handling information
protected by any privacy policy published by us, such as our website privacy
policy, then you must handle that information solely in accordance with the
applicable policy.
14. MEDIA/PUBLIC DISCUSSIONS
It is our policy to disclose material information concerning ICTS to the
public only through specific limited channels to avoid inappropriate publicity
and to ensure that all those with an interest in the company will have equal.
access to information. All inquiries or calls from the press and financial
analysts should be referred to a Managing Director.
15. WAIVERS
There will be no waivers of this Code.
16. COMPLIANCE STANDARDS AND PROCEDURES Compliance
Resources
Your most immediate resource for any matter related to the Code is your
supervisor. He or she may have the information you need, or may be able to refer
the question to another appropriate source. There may, however, be times when
you prefer not to go to your supervisor. In these instances, you should feel
free to discuss your concern with a Managing Director, the General Counsel or
the Chairperson of the Audit Committee.
Clarifying Questions and Concerns; Reporting Possible Violations
If you encounter a situation or are considering a course of action and its
appropriateness is unclear, discuss the matter promptly with your supervisor, a
Managing Director, the General Counsel or the Chairperson of the Audit
Committee; even the appearance of impropriety can be very damaging and should be
avoided.
If you are aware of a suspected or actual violation of Code standards by
others, you have a responsibility to report it. You are expected to promptly
provide a compliance resource with a specific description of the violation that
you believe has occurred, including any information you have about the persons
involved and the time of the violation. Whether you choose to speak with your
supervisor, a Managing Director, the General Counsel or the Chairperson of the
Audit Committee, you should do so without fear of any form of retaliation. We
will take prompt disciplinary action against any employee who retaliates against
you, up to and including termination of employment.
Supervisors must promptly report any complaints or observations of Code
violations to a Managing Director, the General Counsel or the Chairperson of the
Audit Committee. A Managing Director, the General Counsel or the Chairperson of
the Audit Committee will investigate all reported possible Code violations
promptly and with the highest degree of confidentiality that is possible under
the specific circumstances. Your cooperation in the investigation will be
expected.
IF THE INVESTIGATION INDICATES THAT A VIOLATION OF THE CODE HAS PROBABLY
OCCURRED, WE WILL TAKE SUCH ACTION AS WE BELIEVE TO BE APPROPRIATE UNDER THE
CIRCUMSTANCES. IF WE DETERMINE THAT AN EMPLOYEE IS RESPONSIBLE FOR A CODE
VIOLATION, HE OR SHE WILL BE SUBJECT TO DISCIPLINARY ACTION UP TO, AND
INCLUDING, TERMINATION OF EMPLOYMENT AND, IN APPROPRIATE CASES, CIVIL ACTION OR
REFERRAL FOR CRIMINAL
PROSECUTION. APPROPRIATE ACTION MAY ALSO BE TAKEN TO DETER ANY FUTURE CODE
VIOLATIONS.
Acknowledgement Form
All employees, officers and directors of ICTS are required to sign this
acknowledgement form at the time their employment commences and annually
thereafter.
This Code describes important information regarding values and ethical behavior
at ICTS, and I understand that I should consult the General Counsel or a
Managing Director, the Chairperson of the Audit Committee regarding any
questions not answered in this Code.
Since the information described here is necessarily subject to change, I
acknowledge that revisions to this Code may occur. All such changes will be
communicated through official notices, and I understand that revised information
may supersede, modify or eliminate the existing Code. This Code may only be
changed as provided herein.
I have received this Code and I understand that it is my responsibility to read
and comply with the principles contained in this Code and any revisions made to
it. I understand that by signing this I am acknowledging that I have read this
Code and any violations of this Code will be subject to disciplinary action, up
to and including dismissal.
NAME (printed):
SIGNATURE:
DATE:
POWER OF ATTORNEY AND PROXY
The undersigned,
hereby grants power of attorney and proxy, jointly and severally to:
Avram Dan
Ran Langer
for and in name, place and stead of the undersigned to attend the Annual General
Meeting of Shareholders of ICTS International N.V., a public company whose
statutory seat and registered office is in Amstelveen, The Netherlands, which
Annual General Meeting to be held at 10:00, local time, on Wednesday, September
21, 2005, at the offices of the Company, located at Biesbosch 225, 1181 JC,
Amstelveen, The Netherlands or any adjournment or adjournments thereof, and for
and in name, place and stead of the undersigned to sign at that Annual General
Meeting the attendance register, to take part in all discussions, to make such
proposals as the attorney may deem expedient, and to exercise the right to vote
attached to the shares of the undersigned as well as all other rights which may
be exercised at the Annual General Meeting on behalf of the undersigned
, and further to do and perform any and all acts relating to the
foregoing which may be useful or necessary and which the undersigned might or
could or should do if personally present, all this with full power of
substitution.
Signed in , this day of 2005.
If a natural person insert: surname, forenames, full
residential address and date of birth. If a body corporate insert:
corporate name, place of registered office, full business
address. A power of attorney given by a body corporate must be signed by an
officer / officers duly authorized to represent the body corporate. If necessary
inspect the records of the Chamber of Commerce where the body corporate is
registered, and/ or its articles of association or by-laws.
The Proposed Resolutions
Unless otherwise indicated, this Power of Attorney and Proxy confers authority
to vote "FOR" for the resolutions contained herein. The Management Board and the
Supervisory Board recommends a vote of "FOR" for the resolutions contained
herein. This proxy is solicited on behalf of the Management Board of ICTS
International N.V. and may be revoked prior to its exercise by a written notice
to the Chief Executive Officer of the Company.
1. Adoption of the English language to be used for the annual accounts and
annual reports of the Company.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. Adoption of the annual accounts of the fiscal year 2004.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Election of two Managing Directors
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Election of seven Supervisory Directors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
NOTE: Signature(s) should follow exactly the name(s) on the stock certificate.
Executor, administrator, trustee or guardian should sign as such. If more
than one trustee, all should sign. ALL JOINT OWNERS MUST SIGN.
Dated: , 2005
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By:
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Name:
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Title:
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