| The
following table sets forth certain information regarding
ownership of the Company's ordinary shares as of February
28, 2002 for each person who is known by the Company to
own beneficially more than five percent of the Company's
outstanding ordinary shares.
| Name of Ten Percent |
|
|
Percentage
of |
| Shareholders, Officers and
Directors |
Amount Beneficially |
Class |
|
Owned
|
|
Gil Shwed
Marius Nacht
Shlomo Kramer
|
27,048,996
25,371,796
13,780,650
|
11.0%
10.4%
5.7%
|
The Company is not directly or indirectly
controlled by another corporation or by any foreign
government. The Company's major shareholders do not
have different voting rights with respect to their shares.
ITEM 8.
FINANCIAL INFORMATION
Consolidated Financial Statements
and Dividend Policy
The
Company's Consolidated Financial Statements included
in this Annual Report on Form 20-F beginning on page
F-1 are hereby incorporated into this Annual Report
by reference. The Company anticipates that it will retain
any future earnings to support operations and to finance
the growth and development of its business. In addition,
tax-exempt income attributable to the Company's status
as an "approved enterprise" under Israeli tax law can
be distributed to shareholders without subjecting the
Company to taxes only upon the complete liquidation
of the Company. The Company's Board of Directors has
determined that such tax-exempt income will not be distributed
as dividends. Therefore, the Company does not expect
to pay cash dividends for the foreseeable future.
Legal
Proceedings
(a)
On June 20, 2001, the Company, through its subsidiary
in France received a formal request for information
from the Directorate-General for Competition of the
European Commission (the "Commission") regarding a complaint
submitted by Stonesoft Corporation, a Finnish company
alleging anti-competitive behavior, and in particular,
alleging abuse of a dominant position held by the Company,
and requesting that the Commission investigate the allegations
and order injunctive relief. The Company responded to
the Commission in a timely manner both to this and a
subsequent request for information received on November
6, 2001, and has contested the existence of a dominant
position or of infringing behavior on its part. The
Company's legal counsel has advised that, where the
Commission determines at the conclusion of a formal
proceeding that a company has violated European competition
rules, fines may be imposed up to a maximum of 10% of
the Company's consolidated annual revenues as of the
date of the last violation. Since responding to the
Commission's second request for information, the Company
has been engaging in discussions with the Commission
with a view to resolving the matter in a manner acceptable
to all sides and on the basis of which the complaint
against it would be withdrawn and the investigation
terminated. These discussions are ongoing. To date,
the Commission has not initiated formal proceedings
against the Company. Based on the opinion of the Company's
management and its legal counsel, a provision was recorded
in the financial statements as of December 31, 2001
in respect of probable costs arising from this matter.
(b)
On July 5, 1996, Checkpoint Systems, Inc. ("CSI") a
manufacturer of theft prevention devices for retail
stores filed an action alleging trademark infringement
and unfair competition against the Company in the United
States District Court for the District of New Jersey.
CSI sought to enjoin the Company from using the "Check
Point" name in connection with the Company's products
and services. The District Court issued its opinion
in the Company's favor on July 12, 2000, and the District
Court's decision was affirmed on appeal during 2001.
The judgment is now final and no longer appealable.
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