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<SEC-DOCUMENT>0000950130-01-000315.txt : 20010123
<SEC-HEADER>0000950130-01-000315.hdr.sgml : 20010123
ACCESSION NUMBER:		0000950130-01-000315
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20010131
FILED AS OF DATE:		20010122

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MIND CTI LTD
		CENTRAL INDEX KEY:			0001119083
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROGRAMMING SERVICES [7371]
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		
		SEC FILE NUMBER:	000-31215
		FILM NUMBER:		1512535

	BUSINESS ADDRESS:	
		STREET 1:		INDUSTRIAL PARK BLDG 7 PO BOX 144
		CITY:			YOQNEAM ILIY 20692 I
		STATE:			L3
		ZIP:			00000
		BUSINESS PHONE:		0119724993
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>FORM 6-K
<TEXT>

<PAGE>

                                   FORM 6-K


                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549


                       Report of Foreign Private Issuer


                     Pursuant to Rule 13a-16 or 15d-16 of


                      the Securities Exchange Act of 1934


                         For the Month of January 2001


                               MIND C.T.I. LTD.
                               ----------------
                (Translation of Registrant's Name into English)


              Industrial Park, Building 7, Yoqneam 20692, Israel
              --------------------------------------------------
                    (Address of Principal Executive Offices)


Indicate by check mark whether the registrant files or will file annual reports
                      under cover Form 20-F or Form 40-F:

               Form 20-F    X                  Form 40-F______
                        --------

          Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934:

                    Yes _______                 No    X
                                                   -------

          If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-___.


<PAGE>

     Attached hereto and incorporated by reference herein is the Notice of
Extraordinary General Meeting of Shareholders to be held on February 12, 2001,
Proxy Statement and Form of Proxy.


<PAGE>

                                   SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                          MIND C.T.I. LTD.
                                          (Registrant)

                                          By:  /s/ Monica Eisinger
                                               ----------------------------
                                               Monica Eisinger
                                               President

Dated: January 22, 2001
<PAGE>

                               MIND C.T.I. LTD.


            NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS


Notice is hereby given that an Extraordinary General Meeting of Shareholders
(the "Meeting") of Mind C.T.I. Ltd. (the "Company") will be held on February 12,
2001 at 11:00 A.M. (Israel time), at the offices of the Company, Industrial
Park, Building 7, Yoqneam 20692, Israel, for the following purposes:


     (1)   To elect Mr. Ami Amir and Mr. Amnon Neubach as outside directors of
           the Company;

After a short recess during which the Board of Directors and the Audit Committee
thereof will convene to consider various resolutions, the Meeting will reconvene
for the following purposes:

     (2)   To approve terms of compensation to be paid to the outside directors
           of the Company;

     (3)   To approve terms for the indemnification, exculpation and insurance
           of the Company's directors; and

     (4)   To approve the continuing service of Monica Eisinger as President,
           Chairperson of the Board of Directors and Chief Executive Officer of
           the Company.

Shareholders of record at the close of business on January 4, 2001 are entitled
to notice of, and to vote at, the Meeting.  All shareholders are cordially
invited to attend the Meeting in person.

Shareholders who are unable to attend the Meeting in person are requested to
complete, date and sign the enclosed form of proxy and to return it promptly in
the pre-addressed envelope provided. No postage is required if mailed in the
United States.  Shareholders who attend the Meeting may revoke their proxies and
vote their shares in person.

Joint holders of shares should take note that, pursuant to Article 32(d) of the
Articles of Association of the Company, the vote of the senior of the joint
shares who tenders a vote, in person or by proxy, will be accepted to the
exclusion of the vote(s) of the other joint holder(s).  For this purpose
seniority will be determined by the order in which the names stand in the
Company's Register of Members.

                                        By Order of the Board of Directors,

                                        /s/ Monica Eisinger
                                        Monica Eisinger
                                        President, Chairperson of the Board of
                                        Directors and Chief Executive Officer

Dated: January 4, 2001
<PAGE>

                               MIND C.T.I. LTD.
                          Industrial Park, Building 7
                             Yoqneam 20692, Israel


                                PROXY STATEMENT


     This Proxy Statement is furnished to the holders of Ordinary Shares, NIS
0.01 nominal value (the "Ordinary Shares"), of Mind C.T.I. Ltd. (the "Company")
in connection with the solicitation by the Board of Directors of proxies for use
at the Extraordinary General Meeting of Shareholders (the "Meeting"), or at any
adjournment or postponements thereof, pursuant to the accompanying Notice of
Extraordinary General Meeting of Shareholders. The Meeting will be held on
February 12, 2001 at 11:00 A.M. (Israel time), at the offices of the Company,
Industrial Park, Building 7, Yoqneam 20692, Israel.

     It is proposed that at the Meeting, resolutions be adopted as follows:

     (1)   To elect Mr. Ami Amir and Mr. Amnon Neubach as outside directors of
           the Company;

After a short recess during which the Board of Directors and the Audit Committee
thereof will convene to consider various resolutions, the Meeting will reconvene
for the following purposes:

     (2)   To approve terms of compensation to be paid to the outside directors
           of the Company;

     (3)   To approve terms for the indemnification, exculpation and insurance
           of the Company's directors; and

     (4)   To approve the continuing service of Monica Eisinger as President,
           Chairperson of the Board of Directors and Chief Executive Officer of
           the Company.

     The Company currently is not aware of any other matters which will come
before the Meeting. If any other matters properly come before the Meeting, the
persons designated as proxies intend to vote in accordance with their judgment
on such matters.

     A form of proxy for use at the Meeting and a return envelope for the proxy
are enclosed. Shareholders may revoke the authority granted by their execution
of proxies at any time before the exercise thereof by filing with the Company a
written notice of revocation or duly executed proxy bearing a later date, or by
voting in person at the Meeting. Unless otherwise indicated on the form of
proxy, shares represented by any proxy in the enclosed form, if the proxy is
properly executed and received by the Company not less than 72 hours prior to
the time fixed for the Meeting, will be voted in favor of all the matters to be
presented to the Meeting, as described above. On all matters to be considered at
the Meeting, abstentions and broker non-votes will be treated as neither a vote
"for" nor "against" the matter, although they will be counted in determining
whether a quorum is present.

     Proxies for use at the Meeting are being solicited by the Board of
Directors of the Company. Only shareholders of record at the close of business
on January 4, 2001 will be entitled to vote at the Meeting. Proxies are being
mailed to shareholders on or about January 10, 2001 and will be solicited
chiefly by mail. However, certain officers, directors, employees and agents of
the Company, none of whom will receive

                                       1
<PAGE>

additional compensation therefor, may solicit proxies by telephone, telegram or
other personal contact. The Company will bear the cost for the solicitation of
the proxies, including postage, printing and handling, and will reimburse the
reasonable expenses of brokerage firms and others for forwarding material to
beneficial owners of shares.

     On January 4, 2001, the Company had outstanding 19,916,220 Ordinary Shares,
each of which is entitled to one vote upon each of the matters to be presented
at the Meeting, and 650,000 Non-Voting Ordinary Shares. Two or more shareholders
holding the Ordinary Shares conferring in the aggregate at least 25% of the
outstanding Ordinary Shares, present in person or by proxy, will constitute a
quorum at the Meeting.

                            PRINICIPAL SHAREHOLDERS

     The following table sets forth certain information regarding the beneficial
ownership of the Company's shares as of September 12, 2000 by each person who is
known to own beneficially more than 10% of the Company's outstanding shares.
<TABLE>
<CAPTION>

Name of Beneficial Owner                  Total Shares Beneficially Owned  Percentage of Shares/1/
- ------------------------                  -------------------------------  ----------------------
<S>                                       <C>                              <C>

Monica Eisinger                           5,040,000/2/                     24.5%

Lior Salansky                             3,899,140/2/                     18.9%

ADC Teledata Communications Ltd./3/       4,502,000                        21.9%

Summit Partners/4/                        2,592,600                        12.6%

Kevin Mohan/5/                            2,592,600                        12.6%
</TABLE>

- --------------------------
/1/ Based on 20,566,220 outstanding Ordinary Shares and Non-Voting Ordinary
Shares.

/2/ The shares owned by Ms. Eisinger and Mr. Salansky include 140,000 shares
owned by Mind Israel Ltd. Each of Ms. Eisinger and Mr. Salansky is considered a
beneficial owner of these shares.

/3/ ADC Teledata Communications Ltd. is a wholly-owned subsidiary of ADC
Telecommunications, Inc., a Minnesota company whose shares are publicly traded
on the Nasdaq Stock Market.

/4/ Summit Partners is the name used to refer to a group of investments
partnerships. Shares reflected include 1,081,100 Ordinary Shares and 650,000
Non-Voting Ordinary Shares held by Summit Ventures V, L.P., 644,180 Ordinary
Shares held by Summit V Companion Fund, L.P., 41,600 Ordinary Shares held by
Summit V Advisors Fund, L.P., 136,120 Ordinary Shares held by Summit V Advisors
Fund (QP), L.P., and 39,600 Ordinary Shares held by Summit Investors III, L.P.

/5/ Represents shares described in note (4) above, beneficially owned by Summit
Partners. Mr. Mohan, one of the Company's directors, is a member of Summit
Partners LLC, the sole general partner of Summit Partners V, L.P. which is the
sole general partner of Summit Ventures V, L.P., Summit V Companion Fund, L.P.,
Summit V Advisors Fund, L.P., Summit V Advisors Fund (QP), L.P., and Summit
Investors III, L.P. Mr. Mohan does not have voting and dispositive authority
over these shares and disclaims beneficial ownership except to the extent of his
pecuniary interest in these shares.

                                       2
<PAGE>

                    ITEM 1 - ELECTION OF OUTSIDE DIRECTORS


       Companies incorporated under the laws of Israel whose shares have been
offered to the public, such as the Company, are required by the Israeli
Companies Law, 5759-1999 (the "Companies Law"), to appoint at least two outside
directors ("outside directors"). To qualify as an outside director, an
individual may not have, and may not have had at any time during the previous
two years, any affiliations with the Company or its affiliates, as such terms
are defined in the Companies Law. In addition, no individual may serve as an
outside director if the individual's position or other activities create or may
create a conflict of interest with his or her role as an outside director. For a
period of two years from termination from office, a former outside director may
not serve as a director or employee of the Company or provide professional
services to the Company for compensation.

     The Company's Board of Directors is divided into three classes of
directors, denominated Class I, Class II and Class III. The initial term of each
class will expire as follows: Class I in 2001, Class II in 2002 and Class III in
2003. The current directors of the Company are Monica Eisinger (Class I), Lior
Salansky (Class II) and Kevin P. Mohan and Ilan Rosen (Class III). At each
annual general meeting of shareholders beginning in 2001, directors will be
elected for a three-year term to succeed the directors whose term then expire.
The outside directors are required to be elected by the shareholders, but they
will not be members of any class. The term of service of an outside director is
three years and may be extended for an additional three years. All of the
outside directors of a company must be members of its audit committee and each
other committee of a company's board of directors must include at least one
outside director.

     At the Meeting, shareholders will be asked to elect Mr. Ami Amir and Mr.
Amnon Neubach as outside directors of the Company. The Company has received a
declaration from each such nominee that he fulfills all the qualifications of an
outside director under the Companies Law.

     A brief biography of each nominee is set forth below:

     Ami Amir founded RADVision Ltd. in 1993 and has served as its CEO since its
inception. From 1987 to 1992, Mr. Amir served as President of RAD Data
Communications Inc. Prior to 1987, Mr. Amir held senior engineering positions in
Simtech Advanced Training and Simulation Systems Ltd., Tadiran Electronic
Industries and Elbit Systems Ltd.  Mr. Amir holds a B.Sc. in Electronics and
Computer Science from the Technion, Israel Institute of Technology.

     Amnon Neubach has served as an economic consultant to several companies in
the private sector since 1997. From 1995-1997, Mr. Neubach served as country
advisor to Goldman Sachs in Israel, and from 1990-1994 he served as the Minister
of Economic Affairs in the Israeli Embassy in Washington, D.C. Mr. Neubach holds
a Bachelor's Degree in Economics and Business Administration and a Masters in
Economics, both from Bar Ilan University.

     It is proposed that at the Meeting the following resolution be adopted:

          "RESOLVED, that Mr. Ami Amir and Mr. Amnon Neubach be elected as
     outside directors of the Company for a term of three years."

     The election of outside directors requires the affirmative vote of a
majority of the shares present, in person or by proxy, and voting on the matter,
provided that either at least one third of the shares of non-controlling
shareholders voted in favor of the election of the outside directors or the
total number of

                                       3
<PAGE>

shares of non-controlling shareholders voted against the election of the outside
directors does not exceed one percent of the outstanding Ordinary Shares.

     The Board of Directors recommends that the shareholders vote FOR approval
of election of all the above-mentioned nominees.


            ITEM 2 - APPROVAL OF COMPENSATION FOR OUTSIDE DIRECTORS

     Under the Companies Law, the terms of compensation to outside directors of
the Company require shareholder approval.

     The Companies Law also requires that the outside directors receive
compensation pursuant to regulations promulgated under the Companies Law. The
regulations provide tables for payment of annual compensation to a company's
outside directors and for additional compensation based on the participation of
the outside directors in meetings of the Board of Directors or committees
thereof.

     The Audit Committee and the Board of Directors will convene on the date of
the Meeting to approve the payment to each outside director of an annual
compensation in the amount of $8,000 and an attendance fee in the amount of $400
for each meeting of the Board of Directors or committee thereof attended. The
shareholders are also being asked to authorize the Board of Directors to adjust
the outside director compensation described above to the extent necessary to
enable the Company's outside directors to qualify as such pursuant to applicable
regulations that are promulgated from time to time.

     The affirmative vote of the holders of a majority of the Ordinary Shares
present, in person or by proxy, and voting on the matter is required for the
approval thereof.

     It is proposed that at the Meeting the following resolutions be adopted:

          "RESOLVED, that an annual fee of $8,000 and a participation fee for
     attendance at a meeting of the Board of Directors or committee thereof of
     $400 be paid to each outside director of the Company;

          RESOLVED, that the Board of Directors of the Company be authorized to
     adjust the outside director compensation described above to the extent
     necessary to enable the Company's outside directors to qualify as such
     pursuant to applicable regulations that are promulgated from time to time."

     The Board of Directors recommends a vote FOR approval of these proposed
resolutions.


                                   ITEM 3 -
                   APPROVAL OF INDEMNIFICATION, EXCULPATION
                          AND INSURANCE OF DIRECTORS

     The Companies Law and the Company's Articles of Association authorize the
Company, subject to shareholder approval, to:

     (A) enter into a contract to insure the liability of a director of the
Company by reason of acts or omissions committed in his or her capacity as a
director of the Company for:

                                       4
<PAGE>

               (i) the breach of his or her duty of care to the Company or to
      another person;

               (ii) the breach of his or her duty of loyalty to the Company,
      provided that he or she acted in good faith and had a reasonable cause to
      assume that such act would not prejudice the interests of the Company; and

               (iii) a financial obligation imposed upon him or her in favor of
      another person; and

     (B) indemnify a director of the Company by reason of acts or omissions
committed in his or her capacity as a director of the Company for:

               (i)   a financial obligation imposed upon him or her in favor of
                     another person by a court judgment, including a compromise
                     judgement or an arbitrator's award approved by court; and

               (ii)  reasonable litigation expenses, including attorney's fees,
                     expended by a director or charged to him or her by a court:
                     (a) in a proceeding instituted against him or her by or on
                     behalf of the Company or by another person, (b) in a
                     criminal charge from which he or she was acquitted, or (c)
                     in criminal proceedings in which he or she was convicted of
                     an offense which does not require proof of criminal intent.

     (C) prospectively exculpate a director from his or her responsibility for
damage resulting from the director's breach of the director's duty of care to
the Company.

     The Company may indemnify a director after the fact and may undertake to
indemnify a director in advance, provided the undertaking is limited to types of
occurrences which, in the opinion of the Company's Board of Directors, are
foreseeable and to an amount the Board of Directors has determined is reasonable
in the circumstances.

     The Companies Law provides that a company may not indemnify, exempt or
enter into an insurance contract which would provide coverage for the liability
of a director for: (a) a breach of his or her duty of loyalty, except to the
extent described in paragraph (A)(ii) above and as otherwise permitted by law;
(b) a breach of his or her duty of care committed intentionally or recklessly;
(c) an act or omission done with the intent to unlawfully realize personal gain;
or (d) a fine or monetary settlement imposed upon him or her.

     The Audit Committee and the Board of Directors will convene on the date of
the Meeting to approve the purchase of a liability insurance policy for the
benefit of the Company's directors for an annual premium of up to $200,000 and
to indemnify and exculpate the Company's directors to the fullest extent
permitted by law by providing them with an Indemnification and Exculpation
Letter substantially in the form set forth in Exhibit A hereto.  The Company
purchased a policy that provides for maximum coverage of $20,000,000, and will
be authorized to purchase additional coverage so long as the annual premium
therefor does not exceed $200,000.

     It is proposed that at the Meeting the following resolutions be adopted:

          "RESOLVED, that the Company's purchase of liability insurance coverage
       for the benefit of the Company's directors, for an annual premium of up
       to $200,000, be approved;

                                       5
<PAGE>

          RESOLVED, that the Company's undertaking to indemnify and exculpate
       the Company's directors to the fullest extent permitted by law and to
       provide each of them with an Indemnification and Exculpation Letter
       substantially in the form attached as Exhibit A to the Company's Proxy
       Statement dated January 4, 2001 be approved; and

          RESOLVED, that for the purposes of the foregoing resolutions, the term
       "directors" shall include all present and future directors of the Company
       and its subsidiaries and affiliates as shall serve from time to time."

     The affirmative vote of the holders of a majority of the Ordinary Shares
present, in person or by proxy, and voting on the matter is required for the
approval thereof. If one or more of our directors is deemed to be a controlling
shareholder, a special majority vote will be required for approval of this
matter. In such event, the affirmative vote of the Ordinary Shares must include
at least one-third of the Ordinary Shares voted by shareholders who do not have
a personal interest in the matter (unless the total shares of non-interested
shareholders voted against the matter does not represent more than one percent
of the outstanding Ordinary Shares). For this purpose, all shareholders are
asked to indicate on the enclosed proxy card whether or not they have a personal
interest in this matter. Under the Israeli Companies Law, 5759-1999 (the
"Companies Law"), a "personal interest" of a shareholder (i) includes a personal
interest of any members of the shareholder's immediate family (or spouses
thereof) or a personal interest of a company with respect to which the
shareholder (or such a family member thereof) serves as a director or the CEO,
owns at least 5% of the shares or has the right to appoint a director or the CEO
and (ii) excludes an interest arising solely from the ownership of shares in any
company.

     The Board of Directors recommends a vote FOR approval of these proposed
resolutions.


                                   ITEM 4 -
     APPROVAL OF MONICA EISINGER TO CONTINUE TO SERVE AS PRESIDENT, CHAIRPERSON
  OF THE BOARD OF DIRECTORS AND CHIEF EXECUTIVE OFFICER

     Pursuant to section 95(a) and 121(c) of the Companies Law, the chief
executive officer of a public company is permitted to serve also as the
Chairperson of the Board of Directors only with the approval of the
shareholders. The shareholders may give such approval for a period of up to
three years from the date of approval.

     Monica Eisinger has served as the President, Chairperson of the Board of
Directors and Chief Executive Officer of the Company since the Company's
inception, and the Board of Directors believes that it is in the best interest
of the Company to allow her to continue to do so.

     It is proposed that at the Meeting the following resolution be adopted:

               "RESOLVED, that the continuing service of Monica Eisinger, as
               President, Chairperson of the Board of Directors and Chief
               Executive Officer of the Company for a period of three years from
               the date of this resolution be approved."

     Approval of this matter will require the affirmative vote of a majority of
the shares present, in person or by proxy, and voting on the matter, which
affirmative vote must include at least two-thirds of the shares of non-
controlling shareholders present, in person or by proxy, and voting on the
matter.

                                       6
<PAGE>

     The Board of Directors recommends a vote FOR approval of this proposed
resolution.


                                OTHER BUSINESS

     Management knows of no other business to be transacted at the Meeting; but,
if any other matters are properly presented to the Meeting, the persons named in
the enclosed form of proxy will vote upon such matters in accordance with their
best judgment.


                          By Order of the Board of Directors,

                          /s/ Monica Eisinger
                          Monica Eisinger
                          President, Chairperson of the Board of Directors and
                          Chief Executive Officer


Dated: January 4, 2001

                                       7
<PAGE>

                               MIND C.T.I. LTD.

                                     PROXY

         THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

     The undersigned hereby appoints Monica Eisinger, President, Chairperson of
the Board and Chief Executive Officer of the Company and Elad Naggar, Chief
Financial Officer of the Company, and each of them, attorneys, agents and
proxies of the undersigned, with full power of substitution to each of them, to
represent and to vote on behalf of the undersigned all the Ordinary Shares of
Mind C.T.I. Ltd. (the "Company") which the undersigned is entitled to vote at
the Extraordinary General Meeting of Shareholders (the "Meeting") to be held at
the offices of the Company, Industrial Park, Building 7, Yoqneam 20692, Israel
on February 12, 2001 at 11:00 A.M. (local time), and at any adjournments or
postponements thereof, upon the following matters, which are more fully
described in the Notice of Extraordinary General Meeting of Shareholders and
Proxy Statement, dated January 4, 2001.

     This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned. If no direction is made, this Proxy will be voted FOR
each Proposal. Any and all proxies heretofore given by the undersigned are
hereby revoked.

     (CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
<PAGE>

   [X] Please mark your votes as in this example.

   1.  Election of Mr. Ami Amir and Mr. Amnon Neubach as outside directors of
       The Company.

   [_] FOR all nominees    [_] AGAINST all nominees    [_] WITHHOLD AUTHORITY to
                                                           vote on all nominees

   [_] FOR all nominees, except WITHHOLD vote on the following nominee(s):______

   [_] AGAINST all nominees, except WITHHOLD vote on the following nominee(s):

   _______________




   2.  Approval of terms of compensation for the outside directors of the
       Company.

                  [_] FOR          [_] AGAINST              [_] ABSTAIN


    3. Approval of the terms of indemnification, exculpation and insurance for
       the Company's directors.

                  [_] FOR          [_] AGAINST              [_] ABSTAIN


         The undersigned hereby certifies that he does NOT have a personal
         interest in item no. 3. (If you do have a personal interest, write an
         "X" through the word "NOT" in the foregoing sentence.)

    4. Approval of continuing service of Monica Eisinger as President,
       Chairperson of the Board of Directors and Chief Executive Officer of the
       Company.


                  [_] FOR          [_] AGAINST              [_] ABSTAIN




   In their discretion, the proxies are authorized to vote upon such other
   matters as may properly come before the Extraordinary General Meeting or any
   adjournment or postponement thereof.

   The undersigned acknowledges receipt of the Notice of Extraordinary General
   Meeting of Shareholders and Proxy Statement, dated January 4, 2001.

Signature ____________________________  ____________________   Date: ____, 2001
                                        title (if applicable)

Signature if held jointly ____________  _____________________  Date: ____, 2001
                                        title (if applicable)

Please date, sign exactly as your name appears on this proxy and promptly return
in the enclosed envelope. In the case of joint ownership, each owner should
sign. Otherwise, the signature of the senior owner who votes shall be accepted
to the exclusion of the vote(s) of the other joint owner(s); for this purpose,
seniority shall be determined by the order in which the names appear in the
shareholders register. When signing as attorney, executor, administrator,
trustee or guardian, or in any other similar capacity, please give full title.
If a corporation, sign in full corporate name by president or other authorized
officer, giving title, and affix corporate seal. If a partnership, sign in
partnership name by authorized person.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>FORM OF INDEMNIFICATION AND EXCULPATION LETTER
<TEXT>

<PAGE>

                                   EXHIBIT A
                                   ---------

                FORM OF INDEMNIFICATION AND EXCULPATION LETTER

Date:

To:  [NAME OF ADDRESSEE]

     It is in the best interest of Mind C.T.I. Ltd. (the "Company") to retain
and attract as directors and officers the most capable persons available, and
such persons are becoming increasingly reluctant to serve publicly-held
companies unless they are provided with adequate protection through insurance
and indemnification in connection with such service.

     You are or have been appointed a director and/or officer of the Company,
and in order to enhance your service to the Company in an effective manner, the
Company desires to provide hereunder for your indemnification to the fullest
extent permitted by law.

     Accordingly, in consideration of your continuing to serve the Company, the
Company agrees as follows:

1.   The Company hereby undertakes to indemnify you to the maximum extent
     permitted by applicable law in respect of the following:

     1.1  any financial obligation imposed on you in favor of another person by
          a court judgment, including a compromise judgment or an arbitrator's
          award approved by court, in respect of any act or omission ("action")
          taken or made by you in your capacity as a director and/or officer of
          the Company; and

     1.2  all reasonable litigation expenses, including attorneys' fees,
          expended by you or charged to you by a court, in a proceeding
          instituted against you by the Company or on its behalf or by another
          person, or in any criminal charge from which you are acquitted, or in
          any criminal proceedings in which you are convicted of an offense
          which does not require proof of criminal intent, all in respect of
          actions taken by you in your capacity as an a director and/or officer
          of the Company.

     The above indemnification will also apply to any action taken by you in
     your capacity as a director and/or officer of any other company controlled,
     directly or indirectly, by the Company (a "Subsidiary") or in your capacity
     as a director, or observer at board of directors' meetings, of a company
     not controlled by the Company but where your appointment as a director or
     observer results from the Company's holdings in such company ("Affiliate").

2.   The Company will not indemnify you for any amount you may be obligated to
     pay in respect of:

                                       1
<PAGE>

     2.1  a breach of your duty of loyalty, except, to the extent permitted by
          law, for a breach of a duty of loyalty to the Company, a Subsidiary or
          an Affiliate while acting in good faith and having reasonable cause to
          assume that such act would not prejudice the interests of the Company;

     2.2  a willful breach of the duty of care or reckless disregard for the
          circumstances or to the consequences of a breach of the duty of care;

     2.3  An action taken or not taken with the intent of unlawfully realizing
          personal gain;

     2.4  A fine or penalty imposed upon you for an offense; and

     2.5  A counterclaim made by the Company or in its name in connection with a
          claim against the Company filed by you.

3.   The Company will make available all amounts needed in accordance with
     paragraph 1 above on the date on which such amounts are first payable by
     you ("Time of Indebtedness"), and with respect to items referred to in
     paragraph 1.2 above, even prior to a court decision. Advances given to
     cover legal expenses in criminal proceedings will be repaid by you to the
     Company if you are found guilty of a crime which requires proof of criminal
     intent. Other advances will be repaid by you to the Company if it is
     determined that you are not lawfully entitled to such indemnification.

     As part of the aforementioned undertaking, the Company will make available
     to you any security or guarantee that you may be required to post in
     accordance with an interim decision given by a court or an arbitrator,
     including for the purpose of substituting liens imposed on your assets.

4.   The Company will indemnify you even if at the relevant Time of Indebtedness
     you are no longer a director and/or officer of the Company or of a
     Subsidiary or a director or board observer of an Affiliate, provided that
     the obligations are in respect of actions taken by you while you were a
     director, officer and/or board observer, as aforesaid, and in such
     capacity, including if taken prior to the above resolutions.

5.   The indemnification will be limited to the expenses mentioned in paragraph
     1.2 (pursuant and subject to paragraph 3 and insofar as indemnification
     with respect thereto is not restricted by law or by the provisions of
     paragraph 2 above) and to the matters mentioned in paragraph 1.1 above
     insofar as they result from your actions in the following matters or in
     connection therewith:

     5.1  The offering of securities by the Company and/or by a shareholder to
          the public and/or to private investors or the offer by the Company to
          purchase securities from the public and/or from private investors or
          other holders pursuant to a prospectus, agreements, notices, reports,
          tenders and/or other proceedings;

                                       2
<PAGE>

     5.2  Occurrences resulting from the Company's status as a public company,
          and/or from the fact that the Company's securities were issued to the
          public and/or are traded on a stock exchange, whether in Israel or
          abroad;

     5.3  Occurrences in connection with investments the Company and/or
          Subsidiaries and/or Affiliates make in other corporations whether
          before and/or after the investment is made, entering into the
          transaction, the execution, development and monitoring thereof,
          including actions taken by you in the name of the Company and/or a
          Subsidiary and/or an Affiliate as a director, officer, employee and/or
          board observer of the corporation the subject of the transaction and
          the like;

     5.4  The sale, purchase and holding of negotiable securities or other
          investments for or in the name of the Company, a Subsidiary and/or an
          Affiliate;

     5.5  Actions in connection with the merger or proposed merger of the
          Company, a Subsidiary and/or an Affiliate with or into another entity;

     5.6  Actions in connection with the sale or proposed sale of the operations
          and/or business, or part thereof, of the Company, a Subsidiary and/or
          an Affiliate;

     5.7  Without derogating from the generality of the above, actions in
          connections with the purchase or sale of companies, legal entities or
          assets, and the division or consideration thereof.

     5.8  Actions taken in connection with labor relations and/or employment
          matters in the Company Subsidiaries and/or Affiliates and trade
          relations of the Company, Subsidiaries and/or Affiliates, including
          with employees, independent contractors, customers, suppliers and
          various service providers;

     5.9  Actions in connection with the testing of products developed by the
          Company, Subsidiaries and/or Affiliates or in connection with the
          distribution, sale, license or use of such products;

     5.10 Actions taken in connection with the intellectual property of the
          Company, Subsidiaries and/or Affiliates, and its protection, including
          the registration or assertion of rights to intellectual property and
          the defense of claims related to intellectual property;

     5.11 Actions taken pursuant to or in accordance with the policies and
          procedures of the Company, Subsidiaries and/or Affiliates, whether
          such policies and procedures are published or not.

6.   The total amount of Indemnification that the Company undertakes towards all
     persons whom it has resolved to indemnify for the matters and in the

                                       3
<PAGE>

     circumstances described herein, jointly and in the aggregate, shall not
     exceed an amount equal to US$20,000,000.


7.   The Company will not indemnify you for any liability with respect to which
     you have received payment by virtue of an insurance policy or another
     indemnification agreement other than for amounts which are in excess of the
     amounts actually paid to you pursuant to any such insurance policy or other
     indemnity agreement (including deductible amounts not covered by insurance
     policies), within the limits set forth in paragraph 6 above.

8.   Subject to the provisions of paragraphs 6 and 7 above, the indemnification
     hereunder will, in each case, cover all sums of money (100%) that you will
     be obligated to pay, in those circumstances for which indemnification is
     permitted under the law.

9.   The Company will be entitled to any amount collected from a third party in
     connection with liabilities indemnified hereunder.

10.  In all indemnifiable circumstances indemnification will be subject to the
     following:

     10.1  You shall promptly notify the Company of any legal proceedings
           initiated against you and of all possible or threatened legal
           proceedings without delay following your first becoming aware
           thereof, and that you deliver to the Company, or to such person as it
           shall advise you, without delay all documents you receive in
           connection with these proceedings.

           Similarly, you must advise the Company on an ongoing and current
           basis concerning all events which you suspect may give rise to the
           initiation of legal proceedings against you.

     10.2  Other than with respect to proceedings that have been initiated
           against you by the Company or in its name, the Company shall be
           entitled to undertake the conduct of your defense in respect of such
           legal proceedings and/or to hand over the conduct thereof to any
           attorney which the Company may choose for that purpose, except to an
           attorney who is not, upon reasonable grounds, acceptable to you.

           The Company and/or the attorney as aforesaid shall be entitled,
           within the context of the conduct as aforesaid, to conclude such
           proceedings, all as it shall see fit, including by way of settlement.
           At the request of the Company, you shall execute all documents
           required to enable the Company and/or its attorney as aforesaid to
           conduct your defense in your name, and to represent you in all
           matters connected therewith, in accordance with the aforesaid.

           For the avoidance of doubt, in the case of criminal proceedings the
           Company and/or the attorneys as aforesaid will not have the right to
           plead guilty in your name or to agree to a plea-bargain in your name
           without

                                       4
<PAGE>

           your consent. Furthermore, in a civil proceeding (whether before a
           court or as a part of a compromise arrangement), the Company and/or
           its attorneys will not have the right to admit to any occurrences
           that are not indemnifiable pursuant to this letter and/or pursuant to
           law, without your consent. However, the aforesaid will not prevent
           the Company and/or its attorneys as aforesaid, with the approval of
           the Company, to come to a financial arrangement with a plaintiff in a
           civil proceeding without your consent so long as such arrangement
           will not be an admittance of an occurrence not indemnifiable pursuant
           to this letter and/or pursuant to law.

     10.3  You will fully cooperate with the Company and/or any attorney as
           aforesaid in every reasonable way as may be required of you within
           the context of their conduct of such legal proceedings, including but
           not limited to the execution of power(s) of attorney and other
           documents, provided that the Company shall cover all costs incidental
           thereto such that you will not be required to pay the same or to
           finance the same yourself.

     10.4  If, in accordance to paragraph 10.2, the Company has taken upon
           itself the conduct of your defense, the Company will have no
           liability or obligation pursuant to this letter or the above
           resolutions to indemnify you for any legal expenses, including any
           legal fees, that you may expend in connection with your defense,
           except to which the Company in its absolute discretion shall agree.

     10.5  The Company will have no liability or obligation pursuant to this
           letter or the above resolutions to indemnify you for any amount
           expended by you pursuant to any compromise or settlement agreement
           reached in any suit, demand or other proceeding as aforesaid without
           the Company's consent to such compromise or settlement.

     10.6  If required by law, the Company's authorized organs will consider the
           request for indemnification and the amount thereof and will determine
           if you are entitled to indemnification and the amount thereof.

11.  The Company hereby exempts you, to the fullest extent permitted by law,
     from any liability for damages caused as a result of a breach of your duty
     of care to the Company, provided that in no event shall you be exempt with
     respect to any actions listed in paragraph 2 above.

12.  If for the validation of any of the undertakings in this letter any act,
     resolution, approval or other procedure is required, the Company undertakes
     to cause them to be done or adopted in a manner which will enable the
     Company to fulfill all its undertakings as aforesaid.

13.  For the avoidance of doubt, it is hereby clarified that nothing contained
     in this letter or in the above resolutions derogate from the Company's
     right to indemnify you post factum for any amounts which you may be
     obligated to pay

                                       5
<PAGE>

     as set forth in paragraph 1 above without the limitations set forth in
     paragraphs 5 and 6 above.

14.  If any undertaking included in this letter is held invalid or
     unenforceable, such invalidity or unenforceability will not affect any of
     the other undertakings which will remain in full force and effect.
     Furthermore, if such invalid or unenforceable undertaking may be modified
     or amended so as to be valid and enforceable as a matter of law, such
     undertakings will be deemed to have been modified or amended, and any
     competent court or arbitrator are hereby authorized to modify or amend such
     undertaking, so as to be valid and enforceable to the maximum extent
     permitted by law.

15.  This letter and the agreement herein shall be governed by and construed and
     enforced in accordance with the laws of the State of Israel.

Kindly sign and return the enclosed copy of this letter to acknowledge your
agreement to the contents hereof.


                                   Very truly yours,

                                   MIND C.T.I. LTD.


                                   By:________________________

                                      Name:
                                      Title:

Accepted and agreed to as of the date
first above written:


__________________________
Name:

                                       6
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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