UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

 

Check the appropriate box:

      NESS TECHNOLOGIES, INC.      

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than Registrant)

Payment of Filing Fee (Check the appropriate box):

		Ness Tower Atidim High-Tech Industrial Park Building 4 Tel Aviv 61580, Israel
		April 27, 2010

Dear Stockholders:

It is our pleasure to invite you to the 2010 Annual Meeting of Stockholders of Ness Technologies. We will hold the meeting on Monday, June 7, 2010, at 2:00 p.m. local time, at the offices of Olshan Grundman Frome Rosenzweig & Wolosky LLP, Park Avenue Tower, 65 East 55th Street, 2nd Floor, New York, NY 10022.

Details regarding admission to the meeting and the business to be conducted are more fully described in the accompanying Notice of Annual Meeting and Proxy Statement.

We hope you will be able to attend the Annual Meeting. Whether or not you expect to attend, please vote your shares by completing, signing and dating the proxy card or voting instruction card and returning it in the prepaid envelope.

Thank you for your ongoing support of and continued interest in Ness Technologies.

Sincerely,

Aharon Fogel Chairman of the Board		Sachi Gerlitz President and Chief Executive Officer

NESS TECHNOLOGIES, INC. AND SUBSIDIARIES

INDEX

Notice of Annual Meeting of Stockholders			1
Important Notice Regarding the Internet Availability of Proxy Materials			2
Questions and Answers about the Proxy Materials and the Annual Meeting			3
Corporate Governance Principles and Board Matters			8
Board Leadership and Structure			8
Director Independence			8
Board Committees			9
Board’s Role in Risk Oversight			10
Director Nominations			11
Director and Nominee Qualifications and Diversity			12
Stockholder Communications with the Board			14
Transactions with Related Persons, Promoters and Certain Control Persons			15
Proposals To Be Voted On			16
Proposal No. 1: Election of Directors			16
Proposal No. 2: Approval of an Amendment to the Amended and Restated 2007 Stock Incentive Plan			18
Proposal No. 3: Ratification of Independent Registered Public Accounting Firm			21
Directors and Executive Officers			23
Voting Securities and Principal Holders Thereof			25
Beneficial Ownership Table			25
Section 16(a) Beneficial Ownership Reporting Compliance			26
Compensation Discussion and Analysis			27
Compensation Objectives			27
Elements of Compensation			27
Other Elements of Compensation and Perquisites			32
Compensation Benchmarking and Peer Group			33
Compensation of the Chief Executive Officer			34
Policies with Respect to Equity Compensation Awards			34
Employment Agreements			35
Compensation Committee Matters			36
Compensation Committee Report			36
Compensation Committee Interlocks and Insider Participation			36
Relationship between Overall Compensation and Risk			36
Compensation of Directors and Executive Officers			38
Summary Compensation			38
Grants of Plan-Based Awards			40
Employment Arrangements			40
Outstanding Equity Awards at Fiscal Year-End			43
Option Exercises and Stock Vested			44
Pension Benefits			44
Nonqualified Deferred Compensation			44
Potential Payments Upon Termination or Change-in-Control			44
Director Compensation			45
Equity Compensation Plan Information			46
Independent Public Accountants			47
Report of the Audit Committee of the Board of Directors			48
Other Matters			48
Annex A: Amended and Restated 2007 Stock Incentive Plan			A-1

Ness Technologies, Inc.
Ness Tower
Atidim High-Tech Industrial Park, Building 4
Tel Aviv 61580, Israel

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Time and Date		2:00 p.m., local time, on Monday, June 7, 2010
Place		The offices of Olshan Grundman Frome Rosenzweig & Wolosky LLP, Park Avenue Tower, 65 East 55 th Street, 2 nd Floor, New York, NY 10022
Items of Business		1. To elect eight directors
		2. To approve an amendment to the Amended and Restated 2007 Stock Incentive Plan
		3. To ratify the appointment of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, as our independent registered public accounting firm for the fiscal year ending December 31, 2010
		4. To consider such other business as may properly come before the meeting
Adjournments and Postponements		Any action on the items of business described above may be considered at the annual meeting at the time and on the date specified above or at any time and date to which the annual meeting may be properly adjourned or postponed.
Record Date		You are entitled to vote only if you were a stockholder of Ness Technologies as of the close of business on April 12, 2010.
Meeting Admission		You are entitled to attend the annual meeting only if you were a stockholder of Ness Technologies as of the close of business on April 12, 2010 or hold a valid proxy for the annual meeting. You should be prepared to present photo identification for admittance. In addition, if you are a stockholder of record, your ownership will be verified against the list of stockholders of record on the record date prior to your being admitted to the meeting. If you are not a stockholder of record but hold shares through a broker, trustee or nominee (i.e., in street name), you should provide proof of beneficial ownership as of the record date, such as your most recent account statement prior to April 12, 2010, a copy of the voting instruction card provided by your broker, trustee or nominee, or similar evidence of ownership. If you do not provide photo identification and comply with the other procedures outlined above, you will not be admitted to the annual meeting. If you intend to vote shares you hold beneficially in street name with a broker, trustee or nominee, you will also need to obtain and present a “legal proxy” from the broker, trustee or nominee that holds your shares, which will give you the right to vote the shares at the annual meeting. The annual meeting will begin promptly at 2:00 p.m., local time. You should allow adequate time for the check-in procedures.
Voting		Your vote is very important. Whether or not you plan to attend the annual meeting, we encourage you to read this proxy statement and submit your proxy or voting instructions as soon as possible. You may submit your proxy or voting instructions for the annual meeting by completing, signing, dating and returning your proxy or voting instruction card in the pre-addressed envelope provided. For specific instructions on how to vote your shares, please refer to the section entitled “Questions and Answers about the Proxy Materials and the Annual Meeting” beginning on page 3 of this proxy statement and the instructions on the proxy or voting instruction card.

By order of the Board of Directors,

Ilan Rotem
Chief Legal Officer and Secretary

This notice of annual meeting, proxy statement and form of proxy are first being distributed on or about April 27, 2010.

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Important Notice Regarding the Internet Availability of Proxy Materials
for the Stockholder Meeting to be Held on June 7, 2010

This proxy statement, our form of proxy card and our Annual Report on Form 10-K for the year ended December 31, 2009 are available on the Internet at the following address:

http://proxymaterials.ness.com

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PROXY STATEMENT

In this Proxy Statement, we use the terms “Ness,” “we,” “our,” “us” and “the company” to refer to Ness Technologies, Inc. and its subsidiaries.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING

This proxy statement and 2009 annual report, along with either a proxy card or a voting instruction card, are being mailed to stockholders beginning April 27, 2010. The proxy statement summarizes the information you need to know to vote at the annual meeting. You do not need to attend the annual meeting to vote your shares.

Investor Relations
Ness Technologies
3 University Plaza, Suite 600
Hackensack, NJ 07601 USA

If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial owner” of shares held in street name. The proxy statement and annual report have been forwarded to you by your broker, bank or nominee who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your broker, bank or nominee how to vote your shares by using the voting instruction card included in the mailing or by following their instructions for voting by telephone or the Internet, if they offer that alternative. Since a beneficial owner is not the stockholder of record, you may not vote these shares in person at the meeting unless you obtain a “legal proxy” from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the meeting.

The board recommends a vote FOR each of the nominees to the board of directors, FOR the amendment to the Amended and Restated 2007 Stock Incentive Plan and FOR the ratification of the appointment of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, as

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our independent registered public accounting firm for the fiscal year ending December 31, 2010.

If you are a beneficial owner of shares, you may submit new voting instructions by contacting your broker, bank or nominee. You may also vote in person at the annual meeting if you obtain a legal proxy as described in the answer to the previous question. Attendance at the annual meeting will not, by itself, revoke a proxy.

If you do not vote your shares held beneficially in street name with a broker, your broker will likely only be permitted to vote your shares on matters that the NYSE has ruled “discretionary.” The election of the nominees to the board of directors and the amendment to the Amended and Restated 2007 Stock Incentive Plan are not discretionary matters, and therefore most brokers will not be able to vote your shares for the election of directors or the amendment to the Amended and Restated 2007 Stock Incentive Plan if you fail to provide instructions. If your broker is not able to vote your shares, they will constitute “broker non-votes,” which are counted for the purposes of determining the presence of a quorum, but otherwise do not affect the outcome of any matter being voted on at the meeting.

All other proposals require the affirmative “FOR” vote of a majority of the votes cast on the matter. Thus, abstentions will not affect the outcome of the vote on the proposal.

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If you hold shares beneficially in street name and do not provide your broker with voting instructions, your shares may constitute “broker non-votes.” Generally, broker non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given. In tabulating the voting result for any particular proposal, shares that constitute broker non-votes are not considered entitled to vote on that proposal. Thus, broker non-votes will not affect the outcome of any matter being voted on at the meeting, assuming that a quorum is present.

The meeting will begin promptly at 2:00 p.m., local time. You should allow adequate time for the check-in procedures.

If you hold shares beneficially in street name with a broker, trustee or nominee, please follow the voting instructions provided by your broker, trustee or nominee. You may vote your shares in person at the annual meeting, only if at the annual meeting you provide a legal proxy obtained from your broker, trustee or nominee.

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For the other items of business, you may vote “FOR,” “AGAINST” or “ABSTAIN.” If you elect to “ABSTAIN,” the abstention will be counted for the purpose of establishing a quorum, but otherwise will have no effect on the outcome of the vote.

Chief Legal Officer and Secretary
Ness Technologies
Ness Tower
Atidim High-Tech Industrial Park, Building 4
Tel Aviv 61580, Israel

and received at this address by December 28, 2010.

Our by-laws require that any stockholder proposal that is not submitted for inclusion in next year’s proxy statement under Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), but is instead sought to be presented directly at the 2011 annual meeting, must be received at our principal executive offices not less than 90 days and not more than 120 days prior to the first anniversary of the 2010 annual meeting. As a result, proposals submitted pursuant to these provisions of our by-laws must be received no

sooner than by the start of business on February 7, 2011 and not later than by the close of business on March 9, 2011. Proposals should be sent to the address and in the manner set forth above and should include the information set forth in our by-laws, which are posted on our web site, investor.ness.com .

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Stockholders may request another free copy of our 2009 Annual Report on Form 10-K and other financial information from:

Investor Relations
Ness Technologies
3 University Plaza, Suite 600
Hackensack, NJ 07601 USA
+1 (201) 488-3262

Alternatively, current and prospective investors can access the Form 10-K and other financial information on our Investor Relations web site at investor.ness.com .

We will also furnish any exhibit to the 2009 Annual Report on Form 10-K if specifically requested. Our SEC filings are also available free of charge at the SEC’s web site, www.sec.gov .

American Stock Transfer & Trust Company
59 Maiden Lane, Plaza Level
New York, NY 10038
  
Telephone: (800) 937-5449 (U.S. and Canada)
Telephone: +1 (718) 921-8124 (international)
Fax: +1 (718) 236-2641

Investor Relations
Ness Technologies
3 University Plaza, Suite 600
Hackensack, NJ 07601 USA
+1 (201) 488-3262

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CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

Board Leadership and Structure

As of the date of this proxy statement, our board has eight directors and the following three standing committees: Audit Committee, Nominating and Governance Committee, and Stock Option and Compensation Committee (the “Compensation Committee”). In addition, the board from time to time establishes special purpose committees.

Historically and currently, it is the policy of the board that the position of chairman remain separate from the position of president and chief executive officer. Pursuant to our corporate governance guidelines, the duties of the chairman include providing leadership to the board in managing the business of the board and ensuring that there is an effective structure for the operations of the board and its committees. The board believes that its leadership structure is appropriate given the varied expertise of our board members and management, our status as a publicly-traded company on the Nasdaq Global Select Market stock exchange, and the experience and tenure of a majority of our board members.

Each director is elected annually to serve until the next annual meeting of stockholders and until his or her successor is duly elected and qualified.

During 2009, the board held eight meetings. Each director attended at least 75% of all board meetings (during the period when he was a director) and applicable committee meetings (during the periods when he was a committee member). From time to time, the members of the board of directors and committees thereof also acted by unanimous written consent pursuant to the laws of the State of Delaware.

We have no written policy regarding board member attendance at annual meetings. No board members were present at our 2009 annual meeting of stockholders.

Director Independence

The board of directors has determined that to be considered independent, an outside director may not have a direct or indirect material relationship with Ness. A material relationship is one that impairs or inhibits, or has the potential to impair or inhibit, a director’s exercise of critical and disinterested judgment on behalf of Ness and its stockholders. In determining whether a material relationship exists, the board considers, for example, the sales or charitable contributions between Ness Technologies and an entity with which a director is affiliated (as an executive officer, partner or substantial stockholder) and whether a director is a former employee of ours. The board consults with our counsel to ensure that the board’s determinations are consistent with all relevant securities and other laws and regulations regarding the definition of “independent director,” including but not limited to those set forth in the rules of the Nasdaq Global Market as in effect from time to time. The Nominating and Governance Committee periodically reviews the board’s approach to determining director independence and recommends changes as appropriate for consideration and approval by the full board.

Consistent with these considerations, the board has reviewed all relationships between Ness and the members of the board and affirmatively has determined that all directors are independent directors, except Mr. Fogel and Mr. Gerlitz because they are either currently, or within in the last three years have been, employed by or received annual compensation in excess of $100,000 from Ness. In making these independence determinations, the board considered the stock ownership of Citi Venture Capital International (“CVCI”) in respect of Mr. Bhushan, as well as the board’s waiver of one element of our Code of Business Conduct and Ethics for Mr. Bhushan, as described below.

On September 17, 2009, recognizing the potential disruption of CVCI’s business that may result from Mr. Bhushan’s service on the board, the board, pursuant to Section 122(17) of the Delaware General Corporation Law, renounced any interest or expectancy we may have in, or in being offered, any opportunity to participate in, any matter, transaction or interest that comes into the possession of Mr. Bhushan, CVCI or any of its affiliates, related funds or portfolio companies, unless such opportunity is expressly offered to Mr. Bhushan in writing solely in his capacity as a member of the board. Mr. Bhushan otherwise continues to be subject to all laws and our policies pertaining to the activities of our directors.

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Board Committees

Our board of directors has three standing committees to assist it with its responsibilities. The membership and function of each committee is described below. Each committee operates under a written charter adopted by the board. All of the committee charters are available on our web site, investor.ness.com , under the heading “Board Committees.”

Director

Board of Directors

Audit Committee

Stock Option and Compensation Committee

Nominating and Governance Committee

Mr. Ajit Bhushan (1)

Director

Dr. Satyam C. Cherukuri

Director

Chairman

Member

Mr. P. Howard Edelstein

Director

Member

Chairman

Mr. Gabriel Eichler

Director

Member

Mr. Aharon Fogel

Chairman

Mr. Sachi Gerlitz

Director

Mr. Dan S. Suesskind

Director

Member, Financial Expert

Member

Mr. Morris Wolfson

Director

Member

Chairman

The Audit Committee met five times during 2009, and each committee member attended all meetings held during the period when he served. The Compensation Committee met seven times during 2009, and each committee member attended all meetings held during the period when he served, except for Mr. Edelstein, who missed one meeting. The Nominating and Governance Committee met two times during 2009, and each committee member attended all meetings during the time when he served, except for Dr. Cherukuri, who missed one meeting.

The Audit Committee , which is comprised solely of directors who satisfy the Nasdaq Global Market and SEC audit committee membership requirements, is governed by a board-approved charter that contains, among other things, the committee’s membership requirements and responsibilities. The Audit Committee oversees our accounting, financial reporting process, internal controls and audits, and consults with management, our internal auditors and our independent registered public accounting firm (the independent auditors) on, among other items, matters related to the annual audit, the published financial statements and the accounting principles applied. As part of its duties, the Audit Committee appoints, evaluates and retains our independent auditors. It maintains direct responsibility for the compensation, termination and oversight of our independent auditors and evaluates the independent auditors’ qualifications, performance and independence. The Audit Committee also monitors compliance with our policies on ethical business practices and reports on these items to the board. The Audit Committee has established policies and procedures for the pre-approval of all services provided by the independent auditors. Further, the Audit Committee has established procedures for the receipt, retention and treatment, on a confidential basis, of complaints received by Ness, which are described under “Stockholder Communications with the Board” on page 14 of this proxy statement. The Audit Committee’s Report is included on page 48 of this proxy statement, and the Audit Committee’s charter is available on our web site, investor.ness.com , and in print to any stockholder who requests it. Our Audit Committee is comprised of Dr. Cherukuri, Mr. Suesskind and Mr. Wolfson, and Dr. Cherukuri is the chairman.

Financial Expert on Audit Committee :  The board has determined that Mr. Suesskind, the retired former chief financial officer of Teva Pharmaceutical Industries Limited, is an Audit Committee financial expert, as defined under the Exchange Act. The board made a qualitative assessment of Mr. Suesskind’s level of knowledge and experience based on a number of factors, including his formal education and experience as chief financial officer of Teva for over 30 years.

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The Stock Option and Compensation Committee , which is comprised solely of independent directors, determines all compensation for our chief executive officer; reviews and approves corporate goals relevant to the compensation of our chief executive officer and evaluates our chief executive officer’s performance in light of those goals and objectives; reviews and approves objectives relevant to other executive officer compensation; reviews and approves the compensation of other executive officers in accordance with those objectives; administers our stock incentive plans; approves severance arrangements and other applicable agreements for executive officers; and consults generally with management on matters concerning executive compensation and on pension, savings and welfare benefit plans where board or stockholder action is contemplated with respect to the adoption of or amendments to such plans. The Compensation Committee makes recommendations on organization, the election of officers, consultancies and similar matters where board approval is required. The Compensation Committee’s report is furnished on page 36 of this proxy statement, and the Compensation Committee’s charter is available on our web site, investor.ness.com , and in print to any stockholder who requests it. Our Compensation Committee is comprised of Mr. Edelstein, Mr. Suesskind and Mr. Wolfson, and Mr. Wolfson is the chairman.

The Nominating and Governance Committee , which is comprised solely of independent directors, considers and makes recommendations on matters related to the practices, policies and procedures of the board and takes a leadership role in shaping the corporate governance of Ness. As part of its duties, the Nominating and Governance Committee assesses the size, structure and composition of the board and board committees, coordinates evaluation of board performance, reviews board compensation and oversees succession planning for directors and executive officers. The Nominating and Governance Committee also acts as a screening and nominating committee for candidates considered for election to the board. In this capacity it concerns itself with the composition of the board with respect to depth of experience, balance of professional interests, required expertise and other factors. The Nominating and Governance Committee evaluates prospective nominees identified on its own initiative or referred to it by other board members, management, stockholders or external sources and all self-nominated candidates, using the same criteria for evaluating candidates nominated by stockholders and self-nominated candidates as it does for those proposed by other board members, management and search companies. The Nominating and Governance Committee’s charter is available on our web site, investor.ness.com , and in print to any stockholder who requests it. Our Nominating and Governance Committee is comprised of Dr. Cherukuri, Mr. Edelstein and Mr. Eichler, and Mr. Edelstein is the chairman.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics applying to our directors, executive officers and other employees. The code is available on our web site, investor.ness.com .

The code is reasonably designed to deter wrongdoing and promote (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, (ii) full, fair, accurate, timely and understandable disclosure in reports and documents filed with, or submitted to, the SEC and in other public communications made by us, (iii) compliance with applicable governmental laws, rules and regulations, (iv) the prompt internal reporting of violations of the code to appropriate persons identified in the code, and (v) accountability for adherence to the code. Amendments to the code and any grant of a waiver from a provision of the code requiring disclosure under applicable SEC rules will be disclosed on our web site at investor.ness.com .

Board’s Role in Risk Oversight

Our board of directors provides overall risk oversight for the company as part of its normal, ongoing responsibilities. In addition, our board committees oversee specific elements of risk or potential risk.

The Compensation Committee, as part of its responsibilities, exercises oversight of compensation-related risk, as described in detail in “Relationship between Overall Compensation and Risk” on page 36 .

The Nominating and Governance Committee, as part of its duties, assesses risk associated with the leadership structure of the board, appointments to committees and qualifications of directors, committee

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members and nominees for election to the board. The Nominating and Governance Committee also oversees succession planning, through which it oversees and mitigates risk associated with our organizational and management structure.

The Audit Committee oversees risk related to our financial statements and financial reporting process, our systems of internal accounting and financial controls, the annual independent audit of our financial statements, and the legal compliance and ethics programs established by our management and board. In addition, we employ a full-time internal auditor to audit all internal operational processes of the company as he sees fit, including but not limited to contract preparation and approval, project management, revenue recognition, invoice preparation, authorizations for disbursements, customer relationship management, salary and benefits administration, approvals for hiring, subcontractor management, and compliance with software licenses. Our internal auditor is supervised by the Audit Committee, to whom he reports his findings formally at least quarterly.

The board and its committees interact with and utilize the resources of our chief legal officer and his staff to ensure that we comply with all relevant laws and regulations and that our internal policies and operating procedures are fair and ethical. As part of this duty, the board periodically updates our Code of Business Conduct and Ethics and monitors compliance with it. Members of the board and our committees are also directly accessible to employees and stockholders through procedures documented in our Code of Business Conduct and Ethics and in “Stockholder Communications with the Board” on page 14 .

Director Nominations

The Nominating and Governance Committee evaluated and recommended director nominees for the election of directors at the annual meeting. In fulfilling its responsibilities, this committee considered the following factors:

The Nominating and Governance Committee’s goal is to assemble a board of directors that brings to us a variety of perspectives and skills derived from high quality business and professional experience. In doing so, the committee also considers candidates with appropriate non-business backgrounds.

Other than the foregoing factors, there are no stated minimum criteria for director nominees. However, the Nominating and Governance Committee may also consider such other factors as it may deem to be in the best interests of Ness and its stockholders. The committee does, however, recognize that, under applicable regulatory requirements, at least one member of the board must meet the criteria for an “audit committee financial expert” as defined by SEC rules, and that at least a majority of the members of the board must meet the definition of “independent director” under Nasdaq rules. The Nominating and Governance Committee also believes it appropriate for certain key members of our management to participate as members of the board.

The Nominating and Governance Committee identifies nominees by first evaluating the current members of the board willing to continue their service. Incumbent members of the board with skills and experience that are relevant to our business and who are willing to continue their service are considered for re-nomination, keeping in mind a balance between the value of continuity of service by existing members of the board and that of obtaining a new perspective. If any incumbent member of the board does not wish to continue his or

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her service, the Nominating and Governance Committee will seek to identify a new nominee based on the desired skills and experience described above. Members of the Nominating and Governance Committee and board of directors will be polled for suggestions as to individuals meeting such criteria. If the Nominating and Governance Committee believes that the board requires additional candidates for nomination, it may explore alternative sources for identifying additional candidates. Alternative sources may include engaging, as appropriate, a third party search firm to assist in identifying qualified candidates.

The Nominating and Governance Committee will evaluate any recommendation for director nominee proposed by a stockholder. Any recommendation for director nominee submitted by a qualifying stockholder must be received by us no earlier than 120 days and not later than 90 days prior to the anniversary of the date of the prior year’s annual meeting of stockholders. Any stockholder recommendation for director nominee must be submitted to our Corporate Secretary in writing at Ness Tower, Atidim High-Tech Industrial Park, Building 4, Tel Aviv 61580, Israel and must contain the following information:

The Nominating and Governance Committee will evaluate recommendations for director nominees submitted by directors, management or qualifying stockholders in the same manner, using the criteria stated above.

All directors and director nominees will submit a completed form of directors’ and officers’ questionnaire as part of the Nominating and Corporate Governance process. The process may also include interviews and additional background and reference checks for non-incumbent nominees, at the discretion of the committee.

All the director nominees named in this proxy statement met the board’s criteria for membership and were recommended by the Nominating and Governance Committee for election by stockholders at this annual meeting.

Director and Nominee Qualifications and Diversity

The Nominating and Governance Committee and the board believe that the following attributes are critical to ensuring the continued vitality of the board and excellence in the execution of its duties: experience as a leader of a business, firm or institution; mature and practical judgment; the ability to comprehend and analyze complex matters; effective interpersonal and communication skills; and strong character and integrity. Each of our directors has these attributes. In identifying potential director candidates, the Nominating and Governance Committee and the board also focus on ensuring that the board reflects a diversity of experiences and backgrounds, although the board does not have a specific policy with regard to considering diversity.

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The board is comprised of leaders in their respective fields. Many of the current directors have leadership experience at large domestic and international companies, as well as experience on other companies’ boards, which provides an understanding of different business processes, challenges and strategies. Other directors have experience as executives of research firms, members or heads of private equity firms, and senior positions in national governments, which brings unique perspectives to the board. Further, our directors also have other experience that makes them valuable members, including significant experience in the key industries that we serve as well as financial expertise in major public companies. Finally, our directors represent a diversity of geographic regions, roughly mirroring the geographic regions in which we conduct business: 2 from the United States, 3 from Israel, 2 from India and 1 from Europe.

These attributes, along with the leadership skills and other experiences of our board members described in the table below, led the Nominating and Governance Committee and the board to conclude that our nominees will provide us with the perspectives and judgment necessary to guide our strategies and monitor their execution, and should serve as directors.

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Stockholder Communications with the Board

Stockholders who wish to do so may communicate directly with the board, or specified individual directors, according to the procedures described below.

We will forward all communications from security holders and interested parties to the full board, to non-management directors, to an individual director or to the chairperson of the board committee that is most closely related to the subject matter of the communication, except for the following types of communications:

The corporate secretary and chief legal officer will determine when a communication is not to be forwarded.

Our acceptance and forwarding of communications to the directors does not imply that the directors owe or assume any fiduciary duties to persons submitting the communications.

In addition, the Audit Committee has established procedures for the receipt, retention and confidential treatment of complaints received by Ness regarding accounting, internal accounting controls or auditing matters. We have also established procedures for confidential, anonymous submissions by employees with respect to such matters.

You can write to the Ness board at the following address:

Board of Directors (or name of individual director)
c/o Corporate Secretary
Ness Technologies
Ness Tower
Atidim High-Tech Industrial Park, Building 4
Tel Aviv 61580, Israel

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Employees and stockholders who want to raise a question or concern to the Audit Committee regarding accounting, internal accounting controls or auditing matters can write to the Audit Committee at the following address:

Chairman, Audit Committee
c/o Corporate Secretary
Ness Technologies
Ness Tower
Atidim High-Tech Industrial Park, Building 4
Tel Aviv 61580, Israel

Transactions with Related Persons, Promoters and Certain Control Persons

There were no transactions that were required to be described under Item 404(a) of Regulation S-K, except as noted below.

Effective March 31, 2010, in connection with his resignation from the company, we agreed to enter into a consulting agreement with a company held by Ivan Hruška, one of our named executive officers, under which this company will receive approximately $294,000 over a period of 21 months in return for business development and strategic consulting services to be provided by Mr. Hruška. See “Employment Arrangements” on page 40 and “Potential Payments Upon Termination or Change-in-Control” on page 44 .

Procedures for Review and Approval of Transactions with Related Persons

The Audit Committee is responsible for reviewing and approving all related-party transactions as defined under Item 404 of Regulation S-K, after reviewing each such transaction for potential conflicts of interests and other improprieties.

Our Code of Business Conduct and Ethics, which applies to all of our directors, officers and employees, states that conflict of interest situations (when a person’s private interest interferes in any way with our interests) are only permitted to the extent allowed under certain guidelines approved by our board of directors. Our procedures with respect to the employment of relatives of executives is as follows: (i) offers of junior-level employment made to relatives of executives must be examined and approved by our chief executive officer and our chief legal officer; and (ii) offers of senior-level employment made to relatives of executives must be examined and approved by the Compensation Committee.

The abovementioned procedures are in addition to the Audit Committee approval process for transactions rising to the level of related-party transactions as defined under Item 404 of Regulation S-K.

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PROPOSALS TO BE VOTED ON

Proposal No. 1: Election of Directors

There are eight nominees for election to our board of directors this year. Each director is elected annually to serve until the next annual meeting of stockholders and until his or her successor is duly elected and qualified. Information regarding the business experience of each nominee is provided below.

All of the nominees have indicated to Ness that they will be available to serve as directors. If for any reason any nominee does not stand for election, unless the board reduces the number of directors, any proxies we receive will be voted in favor of the remainder of nominees and may be voted for substitute nominees in place of those who do not stand. We have no reason to expect that any of the nominees will not stand for election.

Our board recommends a vote FOR the election to the board of each of the nominees.

Vote Required

Each director receiving a plurality of affirmative votes will be elected. You may withhold votes from any or all nominees.

Nominees

Aharon Fogel Director since 1999 Age 62		Aharon Fogel has served as a member of our board and its chairman since 1999. Since December 2000, he has served as the chairman of the board of Migdal Insurance Company Ltd., Israel’s largest insurance company. Mr. Fogel served as general partner of Jerusalem Venture Partners, an Israeli venture capital fund, from 1996 to 1999. From 2004 through 2009, Mr. Fogel served as the chairman of the advisory committee of the Bank of Israel. He has held a number of senior positions, including Director General of the Israel Ministry of Finance, Chairman of Leumi & Co. Investment Bank, Chairman of the Hadassah Medical Center, and Director of the Economic & Control Division of Clal Israel Ltd. Mr. Fogel holds a B.A. in Economics and Statistics from the Hebrew University of Jerusalem.
Sachi Gerlitz Director since 2007 Age 56		Sachi Gerlitz has served as our president and chief executive officer since March 2007, and as a member of our board since February 2007. Prior to joining Ness, Mr. Gerlitz served as acting chairman of Mobixell Networks and chairman of the board of the Israel Mobile Association. From 2001 through 2006, Mr. Gerlitz was a partner at Apax Partners, a large, global private equity firm managing assets of over $25 billion, where he focused on leveraged transactions and technology investments. He served, from 2005 through 2006, as a director of Bezeq, a publicly-traded leading Israeli telecommunications company, and he has also served on the boards of a number of private companies, such as Starhome BV, Crescendo Networks and Bitband Technologies. Prior to joining Apax Partners, Mr. Gerlitz served for 10 years at Comverse Technologies, through 2000, including as president of the Asia Pacific division, vice president of business development and marketing, chief technology officer, and executive vice president. Before joining Comverse, he served in various roles at Telrad Telecommunication Industries, Hadassah University Hospital, and the Israeli Defense Force. Mr. Gerlitz served as a director of Leadcom Integrated Solutions, a publicly-traded Israeli company providing services and solutions to fixed, mobile and transmission network operators, from May 2009 to November 2009. Mr. Gerlitz received a B.Sc. in Electronic Engineering from Tel-Aviv University in 1978, and is a graduate of the Business Administration Program for Industry Management at Bar-Ilan University.

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Gabriel Eichler Director since 2008 Age 60		Gabriel Eichler has served as a member of our board since December 2008. Mr. Eichler is the senior partner of Benson Oak, an investment banking and private equity firm operating in central Europe with a focus on the Czech Republic and Slovakia, which he founded in 1991. He is also a member and, through 2007, served as chairman, of the supervisory board of AVG Technologies, a security software company incorporated in the Netherlands. Previous executive positions include: from 1999 to 2001, Mr. Eichler served as the chairman, president and chief executive officer of VSŽ, the largest steel company in Central Europe; from 1994 to 1998, he served as vice chairman of ČEZ, the Czech Power Company, where he also served, from 1994 to 1996, as chief financial officer; from 1990 to 1991, Mr. Eichler served as partner and executive vice president at CEDC, a U.S.-based private equity group; and, from 1975 to 1990, he served in various roles at Bank of America, including as regional general manager for Bank of America in Paris, Vienna and Frankfurt and as chief international economist responsible for risk assessment of over 100 countries. Previous non-executive positions include: from 2001 to 2002, Mr. Eichler served as a member of the supervisory board of Slovenská Sporiteína, the largest bank in Slovakia; from 1996 to 2001, he served as a member of the board of the EastWest Institute; from 1997 to 1998, Mr. Eichler served as a member of the supervisory board of Česká Pojišt’ovna, the largest Czech insurance company; and, from 1996 to 1997, he served as vice chairman of the supervisory board of ČSOB, the largest bank in the Czech Republic. Mr. Eichler holds a B.A. degree in economics from Brandeis University in Waltham, MA, an M.A. degree in Social Sciences from The University of Chicago and has performed post-graduate Ph.D. work at the University of Toronto.
Ajit Bhushan Director since 2009 Age 47		Ajit Bhushan has served as a member of our board since September 2009. Mr. Bhushan is a managing director at Citi Venture Capital International, where he has served since 2001, and where he is responsible for investments in the IT & IT-enabled services sector in Asia Pacific, Latin America, Central and Eastern Europe, the Middle East and Africa. From 1998 to 2001, Mr. Bhushan served as vice president of Citi Corporate Bank, Central and Eastern Europe, the Middle East and Africa, where he was responsible for strategy and business development in India, the Middle East and North Africa. From 1993 to 1998, he served as vice president and cash management head for Citi Corporate Bank in Poland, where he had responsibility for building the cash management business for Citi in Poland. From 1987 to 1993, Mr. Bhushan served in various roles at Citi Corporate Bank, India, where he was involved in cash management services. Mr. Bhushan served as a director of Polaris Software Lab Ltd., a publicly-traded Indian company which provides software and services to the financial services sector, from October 2003 through September 2009. He is currently a director of Citicorp Technology Holding Inc., Camelot Information Systems, Inc. and Anand Rathi Financial Services, Ltd. Mr. Bhushan holds a B. Tech degree in electrical engineering from the Indian Institute of Technology, Delhi, with a specialization in computer science, and an MBA from the Indian Institute of Management, Ahmadabad.

Proposal No. 2: Approval of an Amendment to the Amended and Restated 2007 Stock Incentive Plan

General .  Our board of directors proposes to amend the Amended and Restated 2007 Stock Incentive Plan (the “2007 Plan”) to increase the maximum number of shares of our common stock that may be issued under the 2007 Plan by 2,000,000 shares. The 2,000,000 share increase represents approximately 5% of the shares outstanding at April 12, 2010. The purpose of this amendment is to increase the size of the 2007 Plan to continue to have sufficient flexibility to provide appropriate long-term incentives for our employees as alternatives to short-term cash payments. Our board of directors believes it is in our best interests and those of our stockholders to approve the amendment to the 2007 Plan, and the board of directors adopted the amendment to the 2007 Plan that is the subject of this proposal on February 1, 2010.

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Below is a summary of the 2007 Plan proposed to be approved by our stockholders. The summary does not purport to be complete and is qualified in its entirety by reference to the provisions of the 2007 Plan, a copy of which is attached as Annex A to this Proxy Statement.

Administration .  The administration of the 2007 Plan would continue to be provided by the Stock Option and Compensation Committee (the “committee”), which has the authority to determine the types of equity awards and the terms on which such awards are granted under the 2007 Plan. The committee would continue to determine the recipients of awards, the size of awards to be granted to eligible participants, the exercise price, vesting period and award period at the time an award is granted, as applicable; and, for awards issued to Israeli residents, their designation for purposes of tax treatment under the Israeli Income Tax Ordinance (the “Ordinance”). In making such determinations, the committee may take into account the nature and period of service of each eligible person, such eligible person’s degree of responsibility for and contribution to our growth and success or that of any subsidiary, promotion potential and any other factors the committee deems relevant.

The committee would continue to interpret the provisions and supervise the administration of the 2007 Plan. The 2007 Plan provides that no option shall be granted with a time period for exercise greater than 10 years from the date of grant. The exercise price of options will be payable in cash or the holder of an option may request approval from the committee to exercise an option or a portion thereof by tendering shares of common stock at the fair market value per share on the date of exercise in lieu of cash payment of the exercise price.

The 2007 Plan allows for grants of restricted shares of our common stock (“Restricted Stock”), restricted stock units (“RSUs”) and stock options, including incentive stock options (“ISOs”), nonqualified stock options and stock options granted to Israeli residents under the Ordinance. The 2007 Plan requires that the exercise price of an option will not be less than 100% of the fair market value of the common stock on the date of the grant of the option. No ISO may be granted under the 2007 Plan to anyone who owns more than 10% of the outstanding common stock unless the exercise price is at least 110% of the fair market value of the common stock on the date of grant and the option is not exercisable more than five years after it is granted. The maximum number of shares that may be subject to options granted under the 2007 Plan to any individual in any calendar year may not exceed 250,000, but new employees of the company or of any subsidiary will be eligible to receive options to purchase up to 750,000 shares of our common stock in the calendar year in which they commence their employment. The limitations described in the prior sentence only apply to stock option grants under United States Internal Revenue Code of 1986, as amended. There is no limit on the fair market value of ISOs that may be granted to an employee in any calendar year, but no employee may be granted ISOs that first become exercisable during a calendar year for the purchase of stock with an aggregate fair market value (determined as of the date of grant of each option) in excess of $100,000 in a calendar year. An option (or an installment thereof) counts against the $100,000 annual limitation only in the year it first becomes exercisable.

Shares Subject to 2007 Plan .  Our board of directors proposes to amend the 2007 Plan to increase the maximum number of shares of our common stock that may be issued pursuant to awards under the 2007 Plan by 2,000,000 shares, from 5,000,000 to 7,000,000 shares. As of March 31, 2010, 3,969,884 shares were reserved for issuance upon exercise of outstanding stock options and 666,650 shares of Restricted Stock or RSUs were subject to vesting under the 2007 Plan. Upon any merger, reorganization, consolidation, recapitalization, stock dividend, or similar change in our capital structure, appropriate adjustments will be made to the shares subject to the 2007 Plan, to the terms of the grant of awards described below and to outstanding awards. If shares of our common stock are subject to an award that terminates without such shares being issued or with such shares being forfeited, then such shares of stock will again be available for grant and issuance under the 2007 Plan. Shares of common stock used to pay the exercise price of an option or to satisfy tax withholding obligations shall not be available for future grant or issuance under the 2007 Plan.

Eligibility .  The persons eligible for participation in the 2007 Plan shall be all employees, officers and directors, and, subject to certain conditions, consultants and advisors to of the company or any of our subsidiaries. As of April 12, 2010, approximately 7,800 persons were eligible for awards under the 2007 Plan.

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Transfer of Awards .  In general, during the lifetime of the optionee, an option will be exercised only by the optionee and awards may not be transferred or assigned, except by will or the laws of descent and distribution. Awards may also be transferred under a qualified domestic relations order.

Change in Control .  The 2007 Plan provides that, in the event that (1) a tender offer (or series of related offers) is made and consummated for the ownership of 50% or more of our outstanding voting securities; (2) we are merged or consolidated with another corporation; (3) we sell substantially all of our assets to another corporation that is not wholly owned by us; or (4) a Person (as that term is defined in the 2007 Plan) acquires 50% or more of our outstanding voting securities, whether directly, indirectly, beneficially or of record (a “Change in Control”), the committee, in its sole discretion, may accelerate the vesting and exercisability of options, the vesting of Restricted Stock and RSUs, or determine that each outstanding RSU or option shall terminate within a specified number of days after notice to the participant thereunder, and each such participant shall receive, with respect to each share of our common stock subject to such option, an amount equal to the excess of the fair market value of such shares immediately prior to such Change in Control over the exercise price per share of such option.

Termination of Options .  If an optionee’s employment is terminated as a result of death or disability, any options granted to such optionee may be exercised by such optionee (or, in the case of death, his estate) at any time within the shorter of one year or 30 days, respectively, after the date such optionee’s employment is terminated or expiration of the stated term of such options, but only to the extent such options were exercisable on such date. If an optionee’s employment is terminated other than for cause (except as described above) or following an employee’s Normal Retirement or Early Retirement (as those terms are defined in the 2007 Plan), any options granted to such optionee may be exercised by such optionee at any time within 90 days after the date of such optionee’s termination or retirement, but only to the extent such options were exercisable on such date.

Termination of Restricted Stock and RSUs .  In the event a grantee ceases to be an employee of the company all shares of Restricted Stock awarded to him that are still subject to restrictions will be forfeited. In the event a grantee ceases to be an employee before full vesting of RSUs, all unvested RSUs previously awarded to him will be forfeited.

Rule 16b-3 Compliance .  In all cases, the terms, provisions, conditions and limitations of the 2007 Plan shall be construed and interpreted so as to be consistent with the provisions of Rule 16b-3 of the Exchange Act.

Tax Treatment of ISOs .  In general, no taxable income for federal income tax purposes will be recognized by an option holder upon receipt or exercise of an ISO, and we will not then be entitled to any tax deduction. Assuming that the option holder does not dispose of the option shares before the later of (1) two years after the date of grant or (2) one year after the exercise of the option, upon any such disposition, the option holder will recognize capital gain equal to the difference between the sale price on disposition and the exercise price. If, however, the option holder disposes of his option shares prior to the expiration of the required holding period, he will recognize ordinary income for federal income tax purposes in the year of disposition equal to the lesser of (1) the difference between the fair market value of the shares at the date of exercise and the exercise price, or (2) the difference between the sale price upon disposition and the exercise price. Any additional gain on such disqualifying disposition will be treated as capital gain. In addition, if such a disqualifying disposition is made by the option holder, we will be entitled to a deduction equal to the amount of ordinary income recognized by the option holder provided that such amount constitutes an ordinary and reasonable expense of ours.

Tax Treatment of Nonqualified Stock Options .  No taxable income will be recognized by an option holder upon receipt of a nonqualified stock option, and we will not be entitled to a tax deduction for such grant. Upon the exercise of a nonqualified stock option, the option holder will include in taxable income, for federal income tax purposes, the excess in value on the date of exercise of the shares acquired pursuant to the nonqualified stock option over the exercise price. Upon a subsequent sale of the shares, the option holder will derive short-term or long-term gain or loss, depending upon the option holder’s holding period for the shares, commencing upon the exercise of the option, and upon the subsequent appreciation or depreciation in the value of the shares. We generally will be entitled to a corresponding deduction at the time that the participant is required to include the value of the shares in his income.

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Tax Treatment of Restricted Stock and RSUs .  Restricted Stock and RSUs are taxable to the grantee as ordinary income in the year that they vest, and we are generally entitled to a tax deduction in the same amount and at the same time as the grantee recognizes income. In the case of Restricted Stock, however, a grantee may elect to treat the Restricted Stock as vested for tax purposes as of the grant date if certain conditions are met.

Israeli Income Tax Consequences .  Under the 2007 Plan, employees may only be granted options subject the terms of Section 102 of the provisions of the Ordinance and non-employees may only be granted options subject to the terms of Section 3(i) of the Ordinance. In accordance with the terms and conditions imposed by Section 102 of the Ordinance, optionees that receive options under the 2007 Plan are afforded certain tax benefits. We may elect the benefits available under the capital gains alternative or the ordinary income alternative. To qualify for these benefits, certain requirements must be met, including registration of the options in the name of a trustee. Each option, and any common stock acquired upon the exercise of the option, must be held by the trustee for a period commencing on the date of grant and ending no earlier than 24 months after the end of the tax year in which the option was granted and deposited in trust with the trustee. Under the terms of the capital gains alternative, we may not deduct expenses pertaining to the options for tax purposes. We may also grant our employees options pursuant to Section 102(c) of the Ordinance that are not required to be held in trust by a trustee. This alternative, while facilitating immediate exercise of vested options and sale of the underlying shares, will subject the optionee to the marginal income tax rate of up to 50% as well as payments to the Israeli National Insurance Institute and health tax on the date of the sale of the shares or options. Non-employees are granted options subject to Section 3(i) of the Ordinance. Under that section, the income tax on the benefit arising to the optionee upon the exercise of options and the issuance of common stock is generally due at the time of exercise of the options.

Re-Pricing of Options .  The 2007 Plan provides that awards granted may not be re-priced or replaced without the approval of the holders of a majority of the outstanding shares of our voting stock.

Termination of the 2007 Plan .  The board of directors is authorized to amend, suspend or terminate the 2007 Plan, except that it is not authorized, without stockholder approval to (1) materially increase the number of shares issuable under the 2007 Plan; (2) materially increase the benefits accruing to the option holders under the 2007 Plan; (3) materially modify the 2007 Plan eligibility requirements; (4) decrease the exercise price of options below 100% or the underlying stock’s fair market value on the grant date; or (5) extend the term of any option beyond that provided for in Section 8.2 of the 2007 Plan.

Unless terminated earlier by the board of directors, the 2007 Plan will expire on April 22, 2017.

Our board recommends a vote FOR the approval of the 2007 Plan.

Vote Required

Approval of the amendment increasing the number of shares that may be issued under the 2007 Plan by 2,000,000 shares, from 5,000,000 to 7,000,000 shares, requires the affirmative vote of a majority of the shares of our common stock present in person or represented by proxy and entitled to be voted at the meeting.

Proposal No. 3: Ratification of Independent Registered Public Accounting Firm

The Audit Committee, comprised of independent members of the board, has appointed Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, as the independent registered public accounting firm (the independent auditors) for Ness Technologies for the fiscal year ending December 31, 2010. In taking this action, the Audit Committee considered carefully Kost Forer Gabbay & Kasierer’s performance for us in that capacity since its initial retention in 1999, its independence with respect to the services to be performed and its general reputation for adherence to professional auditing standards. We do not expect a representative of Kost Forer Gabbay & Kasierer to be present at the annual meeting.

During fiscal 2009, Kost Forer Gabbay & Kasierer served as our independent registered public accounting firm and also provided certain tax and other audit-related services. See “Independent Public Accountants” on page 47 .

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As the members of the Audit Committee value stockholders’ views on our independent auditors, there will be presented at the annual meeting a proposal for the ratification of the appointment of Kost Forer Gabbay & Kasierer. Stockholder ratification of the selection of Kost Forer Gabbay & Kasierer as our independent auditors is not required by our governing documents or otherwise. However, the board is submitting the selection of Kost Forer Gabbay & Kasierer to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether to retain the firm. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of different independent auditors at any time during the year if it determines that such a change would be in the best interests Ness and its stockholders.

The Audit Committee and the board of directors recommend a vote FOR this proposal.

Vote Required

Ratification of the appointment of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, as our independent registered public accounting firm for the fiscal year ending December 31, 2010 requires the affirmative vote of a majority of the votes cast on the matter.

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DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the name, age and position of each of our directors and executive officers. Biographies for our nominees for director may be found in “Proposal No. 1: Election of Directors” beginning on page 16 . Additional information about our executive officers may be found following this table.

Name		Age		Position
Aharon Fogel			62				Chairman of the Board of Directors
Sachi Gerlitz			56				President, Chief Executive Officer and Director
Ofer Segev			50				Chief Financial Officer and Executive Vice President
Effi Kotek			56				President, Ness Israel
Holly Ripley-Boyd			49				President, Ness Software Product Labs and Chief Marketing Officer
Larry Scott			50				President, Ness Global Industries
Michael Zinderman			59				President, Technologies and Systems Group
Atzmon Lifshitz			57				Executive Vice President, Human Resources
Ajit Bhushan			47				Director
Satyam C. Cherukuri (1) (3)			53				Director
P. Howard Edelstein (2) (3)			55				Director
Gabriel Eichler (3)			60				Director
Dan S. Suesskind (1) (2)			66				Director
Morris Wolfson (1) (2)			49				Director

Ofer Segev has served as our executive vice president and chief financial officer since April 2007, after joining Ness in March 2007 as an executive vice president. From June 2003 to March 2007, he served as chief financial officer of Attunity, a provider of service-oriented software and solutions in the workplace applications market. From May 2001 to June 2003, Mr. Segev was the chief financial officer of TeleKnowledge Group Ltd., a content commerce platform vendor, and he also served as its chief executive officer from January 2002 to June 2003. From May 2000 to May 2001, he served as chief financial officer of Tundo, a developer of an IP-based voice and media services platform. From 1985 through May 2000, Mr. Segev served at Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, where from 1991 he was a partner and led the high-tech industry practice group, participated in over 20 public offerings in the United States, and, from 1997 to 2000, was a member of the technology steering committee of Ernst & Young International. Mr. Segev holds a B.A. in economics and accounting from Bar-Ilan University in Israel, and has studied at the Kellogg School of Management at Northwestern University.

Effi Kotek has served as president of Ness Israel since September 2008. From January 2008 to August 2008, Mr. Kotek served as deputy president of Ness Israel. From November 2005 to December 2007, he served as senior vice president and managing director of Ness Israel’s Outsourcing Group. From November 2002 to October 2005, Mr. Kotek was senior vice president and managing director of Ness Israel’s Infrastructure and Technology Group. From January 2000 through September 2002, he served as vice president of business development for Ness Israel’s Integration and Networking Group. From January 1999 to December 1999, Mr. Kotek was vice president of sales and marketing for Gilad Software and Systems Integration, a privately-held Israeli integration and networking company, which was acquired by Ness in April 1999. From 1995 to 1998, he was president of Applitech Inc., a privately-held medical technology company. From 1980 to 1995, Mr. Kotek held various positions with leading technology companies, including Bynet Data Communications and Orbotech Inc., and was an officer in the Israeli Defense Forces communication forces. Mr. Kotek is a certified computer systems analyst and holds a bachelors degree in mathematics, with specialization in computer architecture and technology, from Concordia University in Montreal, Canada.

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Holly Ripley-Boyd has served as president of Ness Software Product Labs since February 2008 and as our chief marketing officer and executive vice president since December 2007. From July 2008 through January 2009, she served as acting president, Ness North America. From October 2004 through October 2007, she served as chief marketing officer at Symphony Services, a provider of offshore software product development services and end-to-end IT solutions. From October 2002 through February 2004, Ms. Ripley-Boyd was a principal at Mii Technologies, a closely held manufacturing systems company, where she was responsible for business development, marketing and other market-facing initiatives. From September 1999 through June 2002, she served as vice president, global marketing, at Novell affiliate Celerant Consulting, an operational strategy and execution consulting services firm. From 1991 to 1999, Ms. Ripley-Boyd served in several roles at Arthur D. Little, culminating in the role of vice president of marketing. From 1985 to 1990, she served as director of marketing for Fairfield Whitney, a regional search firm. From 1983 through 1985, she worked as a purchasing associate at Digital Equipment Corporation. Ms. Ripley-Boyd holds a B.S. in business and organizational communication from Emerson College, and has studied marketing strategy at Northwestern University’s Kellogg School of Management.

Larry Scott has served as president of Ness Global Industries since September 2008. From July 2006 to July 2008, Mr. Scott served as vice president of global financial services sales for Sun Microsystems, an enterprise network computing infrastructure product and solutions provider. From August 2003 to June 2006, he served as vice president, business integration software for Sun Microsystems. From November 2000 to July 2003, Mr. Scott was vice president and general manager of Mimecom Corporation, a privately-held provider of application and infrastructure management services for e-businesses. From 1997 through October 2000, he was vice president at Cambridge Technology Partners, a provider of management consulting and systems integration services, where he directed the global financial services practice. From 1982 through 1997, Mr. Scott held various leadership positions with technology, consulting and financial industry companies such as CSC Consulting, Fidelity Investments, EJV Partners, Thomson Financial, SEI Corporation and First National Bank of Boston. Mr. Scott holds a degree in economics and political science from Dickinson College.

Michael Zinderman has served as president of Technologies and Systems Group since April 2002. From April 2000 to April 2002, Mr. Zinderman served as the division manager and vice president of Ness Telecom & Systems Group, and from June 1988 to March 2002, he served as the division manager and vice president of Real Time & Systems Group of ATL, an entity Ness acquired in 1999. From May 1981 to May 1988, Mr. Zinderman served as software engineer and projects manager at ATL. From September 1977 to April 1981, Mr. Zinderman served as an electrical engineer at Yona Ushpiz, an electrical engines manufacturing company. Mr. Zinderman holds a B.Sc. in Electronic Engineering from Ben Gurion University, Israel.

Atzmon Lifshitz has served as our executive vice president of human resources since May 2008. From September 2004 to May 2008, Mr. Lifshitz served as corporate vice president of human resources at ECI Telecom Ltd., a global provider of telecommunications infrastructure. From August 2002 to June 2004, he served as managing director of Pilat Israel Ltd., a professional human resources company in Israel. From January 2000 to July 2002, Mr. Lifshitz served as chief operating officer of e-go systems plc., a high-technology company in the United Kingdom that developed services and systems in the field of unified communications services. From 1993 to January 2000, he served as managing director of Telemesser Ltd., an Israeli company in the field of interactive marketing through communications tools. From 1987 to 1993, Mr. Lifshitz served as deputy managing director and vice president of human resources at Fibronics Ltd., a multinational company specializing in data communications. From 1974 to 1987, Mr. Lifshitz served in various roles at the Israeli Prime Minister’s office, the Israeli General Federation of Labor, Bank Leumi Insurance Group, Degem Systems Ltd. and Elscint Ltd. Mr. Lifshitz holds a bachelors degree in political science and labor studies from Tel Aviv University.

There are no family relationships between any of our directors, nominees or executive officers.

As of the date of this proxy statement, there is no material proceeding to which any of our directors, executive officers or affiliates, any owner of record or beneficially of more than five percent of any class of our voting securities, or any associate of any such director, officer, affiliate or security holder, is a party or has a material interest adverse to us or any of our subsidiaries.

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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

Beneficial Ownership Table

The following table sets forth certain information regarding the beneficial ownership of our common stock by:

Beneficial ownership of shares is determined in accordance with Rule 13d-3 promulgated under the Exchange Act and generally includes any shares over which a person exercises sole or shared voting or investment power. The table includes the number of shares underlying options that are exercisable within 60 days of April 12, 2010. Common stock subject to these options is deemed to be outstanding for the purpose of computing the ownership percentage of the person holding them, but is not deemed to be outstanding for the purpose of computing the ownership percentage of any other person. As of April 12, 2010, 38,282,590 shares of common stock were issued and outstanding.

Unless otherwise indicated, the address for all of the named executive officers, directors and stockholders named below is c/o Ness Technologies, Inc., Ness Tower, Atidim High-Tech Industrial Park, Building 4, Tel Aviv 61580, Israel. Except as otherwise indicated, the beneficial owners named in the table below have sole voting and investment power with respect to all shares of capital stock held by them.

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Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership of such securities with the SEC and the Nasdaq Global Market. Officers, directors and greater than 10% beneficial owners are required by applicable regulations to furnish us with copies of all Section 16(a) forms they file.

Based solely upon a review of the copies of the forms furnished to us, we believe that all such persons complied with all applicable filing requirements during 2009, except as noted below:

Citigroup, Inc., the indirect parent company of Citi Venture Capital International, filed a Statement of Changes in Beneficial Ownership of Securities on Form 4 on September 16, 2009, on which it reported three transactions that occurred on September 1 and 2, 2009.

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COMPENSATION DISCUSSION AND ANALYSIS

Compensation Objectives

We seek to ensure that (1) rewards are closely linked to company-wide, group, team and individual performance; (2) the interests of our employees are aligned with those of our stockholders; and (3) compensation and benefits are set at levels that enable us to attract, retain and motivate the highly qualified employees necessary to achieve our objectives.

We apply these objectives and policies through base salary levels and the availability of performance-based annual cash incentive compensation (bonus awards) and stock incentive awards. Consistent with a long-term focus, our policy is to make a significant proportion of executive officer compensation dependent on enhancing stockholder value.

Elements of Compensation

The key components of executive compensation are base salary, annual cash incentive compensation, bonus awards, stock option awards and RSU awards. Salary is based on factors such as an individual’s performance and level of responsibility. Annual cash incentive compensation is included to encourage our executives to meet our current business plans and objectives. Bonus awards are used to reward exceptional performance. Stock options and RSUs are included to promote a longer-term focus on our success, competitiveness and stockholder value.

Compensation for our executive officers is determined by or approved by the Compensation Committee.

Base Salary

The base salaries of our executive officers are set based on job responsibilities, the competitive market and individual performance. Specifically, the base salary for each employee not covered by an employment contract, including executive officers, is established each year by management based on (1) surveys of salaries at similarly-sized competitive firms for comparable jobs, (2) a compensation range which corresponds to the individual’s job responsibilities, and (3) the individual’s overall individual job performance.

Salary surveys and benchmarking are performed by the Compensation Committee as described in “Compensation Benchmarking and Peer Group” on page 33 .

Individual job performance is assessed using both business factors and qualitative measures. The business factors assessed in determining base salary increases are the growth in revenues, growth in operating income, and operating cash flows achieved by each executive officer’s business unit, growth of the business unit through acquisitions and increases in the scope of the executive officer’s job responsibilities. For the chief executive officer and chief financial officer, the term “business unit” refers to our consolidated results.

The qualitative assessments are made largely with reference to the annual performance appraisals of the executive officers for the relevant periods. Our performance appraisal process, which is administered annually to our entire population of employees, integrates input from supervisors, peers and subordinates, and is prepared and delivered by each employee’s direct supervisor. The annual performance appraisals for our executive officers are prepared by our chief executive officer, while his annual performance appraisal is prepared by the chairman of our board of directors and the Compensation Committee. The Compensation Committee also weighs its own impressions of the executive officers from working with the executives from time to time, and, for the chief executive officer and chief financial officer, from their frequent interaction with the board of directors, of which the committee is a part.

All of the executive officers were judged by their respective supervisors and the Compensation Committee to have fully satisfied the basic performance requirements of their jobs for the relevant periods, and therefore individual job performance was not a significant differentiating factor in determining their base salary adjustments for 2009.

As a result of the economic downturn and the cost pressures it imposed on our business, our chief executive officer decided, with the concurrence of the Compensation Committee, not to increase the base salaries of our executive officers and most other employees in 2009, and, in addition, to decrease the 2009

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base salaries of all employees in our executive and administrative headquarters and in our Ness Israel business unit effective February 1, 2009, in order to adjust our aggregate compensation expense to a level appropriate for economic conditions. As a result, the base salaries of Mr. Gerlitz and Mr. Segev decreased by 5% from 2008 to 2009 and the base salaries of Mr. Hruška and Mr. Zinderman did not increase from 2008 to 2009. Mr. Kotek’s base salary increased by 9.3% from 2008 to 2009, consisting of a 15.1% increase associated with his promotion on September 1, 2008 to his current position as the president of our Ness Israel business unit and his concurrent appointment as an executive officer, and the 5% February 1, 2009 reduction described above. One other executive officer, who was not a named executive officer, received a 2009 base salary increase compared to 2008 in connection with a promotion and increase in responsibilities.

The base salaries of our named executive officers are denominated and paid in the relevant local currency for each officer, and therefore part of the year-to-year changes in base salaries disclosed in “Summary Compensation” on page 38 is due to foreign currency translation effects when base salaries are converted to U.S. dollars for reporting purposes. From 2007 to 2008, the dollar weakened significantly against both the New Israeli Shekel (“NIS”) and Slovak Koruna (“SKK”), such that, without any actual salary change in local currencies, base salaries denominated in NIS and SKK would have increased from 2007 to 2008 by 14.6% and 15.5%, respectively, in dollar terms due to changes in average yearly foreign exchange rates. From 2008 to 2009, the dollar strengthened significantly against the NIS and slightly against the SKK, such that, without any actual salary change in local currencies, base salaries denominated in NIS and SKK would have decreased from 2008 to 2009 by 8.7% and 1.1%, respectively, in dollar terms due to changes in average yearly foreign exchange rates.

Annual Cash Incentive Compensation

We pay annual cash incentives to our executive officers under an annual cash incentive compensation policy. The goal of the Compensation Committee is to set annual cash incentive compensation at a level commensurate with performance against defined annual business objectives.

Annual target cash incentive compensation is defined for each executive at the start of each year, along with specific performance objectives and payment criteria. Target amounts for executive officers are based on job responsibilities, with reference to the levels of total cash compensation of executives at our peer companies (see “Compensation Benchmarking and Peer Group” on page 33 ), as described above in “Base Salary” above.

Individual awards are based on a range of measures, including company-wide measures of performance as well as performance factors particular to each executive officer, such as the performance of the business unit or functional area for which the executive has management responsibility and the executive’s individual accomplishments. Company-wide and business unit performance measures include operational, strategic and human resources metrics.

Individual accomplishments are measured through defined major business objectives (“MBOs”) and personal performance objectives (“PPOs”). MBOs and PPOs for the chief financial officer are assigned by the chief executive officer. Those for the chief executive officer are assigned by the board of directors.

Rules for Payment against Performance Objectives

Performance against the defined objectives is assessed annually for each executive officer, shortly after the close of our annual financial statements. Performance is measured versus the specific targets established or approved by the Compensation Committee at the start of each year.

Each quantitative performance objective (those other than MBOs and PPOs) is associated with a numerical target for each executive officer to whom it applies. Incentive payment for achievement of each quantitative performance objective is formula-based, according to the percentage achievement of the numerical target. If achievement of a quantitative performance objective is below a specified threshold percentage of the numerical target for that objective, typically 70%, no cash incentive compensation is earned with respect to that objective. If achievement is between the threshold and 100% of the target, a linear formula is used to calculate the amount of the incentive compensation, with 0% being earned at the threshold and 100% being earned at 100% achievement of the target. For achievement above 100% of the target, the linear formula is

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extended so that higher achievement of that performance objective results in additional incentive compensation, up to a maximum payment of 300%. If an executive officer achieves below 40% of the target for one or more quantitative performance objectives, no cash incentive compensation is earned by the executive officer for any quantitative performance objectives, regardless of the percentage achievement for the other quantitative performance objectives. The numerical targets for quantitative performance objectives are set slightly above expected achievement levels in order to provide an additional incentive for executive officers to exceed expectations.

For non-quantitative performance objectives (MBOs and PPOs), achievement is measured subjectively by the board of directors for the chief executive officer’s objectives, and by the chief executive officer for the objectives of all other executive officers. Cash incentive compensation earned against non-quantitative performance objectives is linear according to deemed achievement percentages. That is, achievement of 50% earns 50% of the incentive, 70% earns 70% of the incentive, and 100% earns 100% of the incentive. For achievement of non-quantitative performance objectives below an average of 40%, no cash incentive compensation is earned. Earnings for non-quantitative performance objectives may not exceed 100%. Our management and the Compensation Committee believe that these non-quantitative performance objectives are reasonably achievable. See “Grants of Plan-Based Awards” on page 40 for more information about 2009 target cash incentive compensation.

The Compensation Committee has concluded that this policy is not reasonably likely to motivate imprudent risk taking. For a detailed discussion of the Compensation Committee’s conclusions regarding our compensation policies and risk-management, see “Relationship between Overall Compensation and Risk” on page 36 .

2009 Payments to Named Executive Officers

The Compensation Committee believes that executive officer annual cash incentive awards for 2009 were consistent with the level of each executive’s individual accomplishments and appropriately reflected company performance.

The table below presents the annual cash incentive plan performance objectives applicable to each of our named executive officers for 2009, the relative weight that each objective represented for each named executive officer’s plan and the payment earned in respect of that objective.

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The Compensation Committee did not use discretion in determining any 2009 annual cash incentive plan earnings.

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2010 Performance Objectives

Executive officer cash incentive compensation targets and performance objectives for 2010 have been established by the Compensation Committee. Performance objectives and associated weights for our chief executive officer and chief financial officer for 2010 are summarized as follows:

Performance Objective		Chief Executive Officer		Chief Financial Officer
Non-GAAP EBIT/DA of the company			30	%			20	%
Book-to-bill ratio of the company (1)			15	%			—
Cash collections of the company			—				20	%
Revenues of the company			10	%			10	%
Non-GAAP earnings per share of the company			5	%			10	%
Functional objectives for non-P&L responsibilities			—				20	%
MBOs and PPOs			40	%			20	%

Performance objectives and associated weights for our other executive officers for 2010 are summarized as follows:

Performance Objective		Executive Officers with P&L Responsibilities		Executive Officers with Non-P&L Duties
Non-GAAP operating margin of the executive officer’s business unit			20 – 30%				—
Revenues of the executive officer’s business unit			10 – 20%				—
Non-GAAP EBIT/DA of the company			10%				25%
Revenues of the company			15%				15%
Cash collections of the executive officer’s business unit			0 – 10%				—
Book-to-bill ratio of the executive officer’s business unit			0 – 20%				—
Functional objectives for non-P&L responsibilities			—				40 – 45%
MBOs			10 – 20%				5 – 10%
PPOs			5%				10%

We followed the same methodology in determining each executive officer’s numerical performance targets this year as in prior years, and the same rules for payments against performance objectives apply as for 2009. At this time, we have no reason to believe that the 2010 cash incentive compensation targets will not be met.

For more information on the target annual cash incentive compensation for each named executive officer, aggregated across all performance objectives for that named executive officer, please refer to “Employment Arrangements” on page 40 .

Bonus Awards

In addition to the annual cash incentive awards described above, we may also pay discretionary cash bonuses to executive officers and other employees from time to time, based on exceptional performance or based on achievement of significant performance objectives that were not anticipated at the time that our annual cash incentive compensation awards were granted.

No discretionary bonuses were paid to our named executive officers in 2009.

Stock Incentive Awards

We periodically grant stock option awards and RSU awards to executives, managers and other senior employees. We may also grant restricted stock awards, but we have not done so to date. In addition, we may grant options, restricted stock or RSUs in connection with an executive’s hiring or assumption of a new

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position. The size of each individual stock incentive grant is based on the position and performance of the employee receiving the grant. All stock incentive grants are approved by the Compensation Committee.

Before 2007, the stock options we granted vested based solely on continuing service requirements. In 2007 and 2010, we granted certain stock options that linked vesting with performance criteria. We first granted RSUs in 2008. Our policy for equity compensation awards is more fully described in “Policies with Respect to Equity Compensation Awards” on page 34 .

The Compensation Committee determines the size of the equity grants to our named executive officers and other executive officers based on each executive’s role and scope of responsibility in the company and his or her level of performance, also taking into account the company’s interest in the retention of key executives on a going forward basis. The Compensation Committee intends for the value of the equity awards to bring each executive officer closer to the relevant benchmark for that executive.

The Compensation Committee considers the results of compensation survey and benchmarking studies in granting stock incentive awards. As described in “Compensation Benchmarking and Peer Group” on page 33 , the results of the November 2008 and February 2010 compensation survey and benchmarking analyses showed that, without equity grants, the compensation of the company’s executive officers was below the median for our peer companies.

During 2009, no options or RSUs were granted to our executive officers, as a result of the economic downturn and the cost pressures it imposed on our business.

On March 11, 2010, we granted options to purchase 400,000 and 200,000 shares of our common stock to Mr. Gerlitz and Mr. Segev, respectively, at an exercise price of NIS 23.42, the closing price of our common stock on the Tel Aviv Stock Exchange on the grant date, or approximately $6.28 as of the grant date. Half of the options will vest and become exercisable in three equal installments on each of March 11, 2011, March 11, 2012 and March 11, 2013. The other half of the options will vest in three equal installments on each of March 11, 2011, March 11, 2012 and March 11, 2013, but will only become exercisable if the closing price of our common stock is $10.00 or more for at least 10 consecutive business days on or before March 11, 2013, otherwise they will be forfeited on March 11, 2013.

Pension Plans

We do not offer a defined benefit pension plan. In each country where we operate, we participate in the pension plan required by local regulatory authorities or dictated by customary norms, such as the Social Security program in the United States, the Severance Pay Law in Israel, the Severance Pay Law in Italy and the Provident Fund in India. These benefits are provided to all employees within each jurisdiction.

Other Elements of Compensation and Perquisites

In addition to the compensation elements previously described, we provide certain additional benefits to our employees. The following table generally illustrates the benefits we do and do not provide and identifies those employees who may be eligible to receive them.

Benefit Plan (1)

Executive Officers

Managers

Full-time Employees

Health insurance (1)

ü

ü

ü

Life/disability insurance (1)

ü

ü

ü

Defined contribution pension plan (2)

ü

ü

ü

Manager’s insurance (3)

ü

ü

ü

Advanced study fund (3)

ü

ü

ü

Defined benefit pension plan

×

×

×

Employee stock ownership plan

×

×

×

Supplemental early retirement plan

×

×

×

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We also provide certain perquisites to our executive officers and selected managers. The following table generally illustrates the perquisites we do and do not provide and identifies those employees who may be eligible to receive them.

Perquisite

Certain Executive Officers

Certain Managers

Full-time Employees

Automobile allowance or company car (1)

ü

ü

(1)

Financial and tax planning services

×

×

×

Country club memberships

×

×

×

Dwellings for personal use (2)

×

×

×

Security services

×

×

×

Driver services

×

×

×

Loan forgiveness

×

×

×

Compensation Benchmarking and Peer Group

The Compensation Committee periodically compares base salary and incentive compensation programs for our executive officers with those of other leading IT services companies and other industrial companies to ensure that they are appropriate to our objectives, in the context of each executive officer’s individual performance and the overall performance of Ness. The Compensation Committee also considers broader industry information that it judges to be appropriate, including country-specific information.

Historically, the Compensation Committee has performed compensation market comparisons on an informal and ad hoc basis, including reviewing publicly available industry compensation data to obtain a general understanding of current compensation practices. These informal comparisons and survey activities did not involve a fixed set of peer companies, analysis of the compensation of named executive officers to percentile results from a broad compensation survey, or the use of benchmarking results to base, justify or provide a framework for compensation decisions.

In November 2008, in anticipation of annual compensation adjustments for 2009, the Compensation Committee received the results of its first formal compensation survey and benchmarking analysis. The analysis, which was performed by Frederic W. Cook & Co., Inc., a leading independent compensation consulting firm, compared the base salaries, target cash compensation and target total direct compensation of our named executives and other executive officers to the projected 2009 compensation of executive officers in three survey populations.

The first comparison was to a survey population of 14 companies in the IT services industry of approximately our size in annual revenues (“our peer companies”), using compensation data collected by Frederic W. Cook & Co., Inc. The companies surveyed were Acxiom Corporation; Analysts International Corporation; CIBER, Inc.; Computer Task Group; Gartner, Inc.; iGate Corporation; Lionbridge Technologies, Inc.; ManTech International Corporation; MAXIMUS, Inc.; NCI Information Systems, Inc.; PFSweb, Inc.; Sapient Corporation; SI International; and SRA International, Inc. The other two comparisons were to third-party compensation survey data available to Frederic W. Cook & Co., Inc., one covering the technology sector and a second covering a broader sample of U.S.-based industries.

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In February 2010, the Compensation Committee retained Frederic W. Cook & Co., Inc. to update its November 2008 survey, specifically pertaining to CEO and CFO compensation. The updated survey results were used by the Compensation Committee in the determination of 2010 salary increases, non-equity incentive plan compensation awards, RSU awards and stock option awards for our executive officers.

The analyses found that the base salaries of our named executive officers and all executive officers were below the median for the surveyed groups, target cash compensation was close to the median for the surveyed groups, and target total direct compensation was slightly above the median for the surveyed groups. The Compensation Committee intends for target total direct compensation for each executive officer to be at approximately the 60 ^th percentile of relevant benchmark results. The Compensation Committee has determined that this level of compensation strikes the correct balance between controlling costs, appropriately motivating executives to achieve defined company and personal objectives and supporting our interest in the retention of key executives on a going forward basis.

Compensation of the Chief Executive Officer

The compensation of our chief executive officer is determined periodically by the Compensation Committee, taking into account the terms of his existing employment agreement. The chief executive officer does not participate in any decisions regarding his own compensation.

The 2009 compensation of our chief executive officer, Mr. Gerlitz, was based on a variety of factors including the terms of his existing employment agreement, our contractual obligations, a comparison of the compensation of the chief executive officers of our peer companies and Mr. Gerlitz’s involvement in leading us toward the achievement of our business objectives, including the achievement of specific goals set for Mr. Gerlitz by our board of directors. See the preceding sections on elements of compensation for more information.

The Compensation Committee believes that the compensation of the chief executive officer, including compensation derived from annual cash incentives, bonuses and stock incentive awards, is within the range of compensation paid to comparable industry executives.

Policies with Respect to Equity Compensation Awards

We periodically grant stock incentive awards, including stock options and RSUs, to executives, managers or other senior employees. Typically stock incentive awards are granted for all eligible employees on the same date. We may also grant stock incentive awards in connection with an executive’s hiring or assumption of a new position. The grant date in these situations will vary throughout the year as a consequence of different hiring or promotion dates.

The size of each individual stock incentive award is based on the position and performance of the employee receiving the award. Options may be granted under any of several active stock incentive plans, some containing provisions specific to Israeli employees, others designed for United States and other employees. We may also grant restricted stock or RSUs under our Amended and Restated 2007 Stock Incentive Plan. All stock incentive awards are determined by or approved by the Compensation Committee.

Stock options provide for potential appreciation in stock price from the date that the option is granted to the date that the option is exercised. Options are granted at or above the fair market value on the grant date, and the grant dates are not selected or manipulated to achieve favorable exercise prices. Under some of our stockholder-approved stock incentive plans, we may grant stock options at a discount to fair market value, although we have not exercised this right. We do not grant stock options with a so-called “reload” feature, nor do we loan funds to employees to enable them to exercise stock options. Our long-term performance ultimately determines the value of stock options, since gains from stock option exercises are entirely dependent on the long-term appreciation of our stock price.

Generally, stock options vest based on continuing service requirements, rather than upon the achievement of performance goals. Typically our stock option awards vest in three equal parts over three years, although we have granted stock options with varying vesting schedules from time to time. In 2005, we granted certain stock options that were fully vested at the time of the grant. In 2007 and 2010, we granted certain stock options that include performance-based vesting criteria.

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RSUs are an alternate form of deferred compensation and retention mechanism for key employees. RSUs provide recipients with value to the extent of the price of the underlying shares of our common stock at their dates of vesting, and they provide for potential additional value upon the subsequent appreciation of our stock.

Generally, RSUs vest based on continuing service requirements. Since 2008, when we began awarding RSUs, they have been granted with a vesting period of four years, under which half of the underlying shares will vest on the second anniversary of the grant date, another quarter of the underlying shares will vest on the third anniversary of the grant date and the remaining underlying shares will vest on the fourth anniversary of the grant date. Future grants of RSUs may have different vesting schedules.

Employment Agreements

It is our policy to have written employment agreements with all our employees. These agreements set forth the terms under which each employee is employed, including position, duties, term of employment, compensation, ownership of developments, the employee’s obligations to us and our obligations to the employee. Employee obligations generally include non-disclosure of confidential information, non-solicitation of other employees, non-competition and sufficient notice of intent to resign or to refuse to renew the employment agreement. Our obligations generally provide for notice, or pay in lieu of notice, in case of termination other than for cause.

For executive officers and certain managers, the employment agreements may also contain provisions regarding stock incentive awards, perquisites, extended termination notice periods and severance payments following change-of-control events or constructive termination. Furthermore, our stock incentive plans permit our board of directors to accelerate the vesting of previously-granted but unvested stock options, restricted stock and RSUs in connection with a change-of-control event.

We have filed our employment agreements with our named executive officers and our stock incentive plans with the SEC.

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COMPENSATION COMMITTEE MATTERS

The Compensation Committee approves equity-based compensation for the company, reviews and approves compensation for our executive officers, including the named executive officers, and sets compensation for our chief executive officer. A copy of the Compensation Committee Charter is available on our web site at investor.ness.com under the heading “Board Committees.”

The members of the Compensation Committee at December 31, 2009 were Mr. Edelstein, Mr. Suesskind and Mr. Wolfson, all of whom are independent directors. The Compensation Committee met seven times during 2009, and each committee member attended all meetings held during the period when he served, except for Mr. Edelstein, who missed one meeting. The Compensation Committee may utilize outside consultants from time to time during the year.

The Compensation Committee has furnished the following report on executive compensation for fiscal 2009.

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the preceding “Compensation Discussion and Analysis” beginning on page 27 of this proxy statement. Based on the review and discussion, the Compensation Committee has recommended to the board of directors that the “Compensation Discussion and Analysis” be included in this proxy statement and incorporated by reference in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009.

Stock Option and Compensation Committee

Morris Wolfson, Chairperson
P. Howard Edelstein
Dan S. Suesskind

Compensation Committee Interlocks and Insider Participation

Our Stock Option and Compensation Committee consists of Mr. Edelstein, Mr. Suesskind and Mr. Wolfson. Except as set forth in “Transactions with Related Persons, Promoters and Certain Control Persons” on page 15 and “Director Compensation” on page 45 , none of such directors was a party to any transaction with Ness that requires disclosure under Items 404 or 407(e)(4)(iii) of Regulation S-K.

Relationship between Overall Compensation and Risk

The Compensation Committee has reviewed our compensation policies and practices and concluded that they are not reasonably likely to motivate imprudent risk taking. In this regard, we note that our compensation plans are a blend of short-term base salary, medium-term annual cash incentive plans and long-term stock incentive awards, with a significant skew toward medium- and long-term incentives at higher executive levels. Our compensation policies are more fully described in “Elements of Compensation” on page 27 .

The Compensation Committee evaluated our compensation policies and practices to ensure that they do not foster risk taking above the level of risk associated with our business model. In particular:

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The Compensation Committee monitors our compensation policies on an ongoing basis, including determining whether our risk management objectives are being met with respect to employee compensation incentives.

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COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

Summary Compensation

The following table sets forth information with respect to compensation earned by our chief executive officer, our chief financial officer and our other three most highly compensated executive officers for each of the last three years. We refer to these executive officers as the “named executive officers.”

This compensation is earned in the relevant local currency for each officer, with the exception of stock awards, option awards and certain 2007 bonus and non-equity incentive plan payments, which are valued in dollars. The relevant local currency for Messrs. Gerlitz, Segev, Zinderman and Kotek for the periods presented was NIS, and for Mr. Hruška was SKK for 2007 and 2008 and euro for 2009. All amounts presented were converted from these currencies to dollars using the average exchange rates of each respective year, except for bonus payments, which were converted using the exchange rates for their payment dates, and 2009 non-equity incentive plan compensation amounts, which were converted using the average exchange rates of the first quarter of 2010, during which period the amounts were determined and paid.

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Grants of Plan-Based Awards

The following table sets forth certain information regarding non-equity incentive plan, stock and stock option grants made to the named executive officers during the year ended December 31, 2009.

During 2009, no options, restricted stock or RSUs were granted to our executive officers.

Employment Arrangements

We enter into written employment agreements with our executive officers outlining the terms of their employment at Ness, including compensation parameters. The material terms of our employment agreements with our named executive officers are described below, including their current salaries and annual cash incentive compensation targets. For more detail on how annual cash incentive compensation is awarded, see “Annual Cash Incentive Compensation” on page 28 .

Sachi Gerlitz

On March 12, 2007, we entered into an employment agreement with Issachar (Sachi) Gerlitz. Mr. Gerlitz began his employment on January 8, 2007 and on March 16, 2007 he assumed the role of president and chief executive officer. The current term of the agreement expires on December 31, 2010, but is automatically extended for successive one-year periods, unless terminated by either party upon written notice no later than six months prior to the expiration of the then-existing term. Mr. Gerlitz’s compensation is denominated in NIS. His annual base salary for 2010, which was approved by the Compensation Committee, is approximately $463,634, and the Compensation Committee also granted him an annual cash incentive award for 2010 with a target of approximately $344,735, based on the achievement of certain goals relating to the performance of the company, using the dollar-to-NIS exchange rate of March 31, 2010, except that the terms of his employment agreement provide that Mr. Gerlitz’s annual cash incentive payment may not be less than $125,000. We may terminate the agreement by providing Mr. Gerlitz with twelve months of prior written notice, and Mr. Gerlitz may terminate the agreement by providing us with six months of prior written notice. However, we may terminate Mr. Gerlitz for cause immediately if he is convicted of committing a felony. Except for termination by us for serious misconduct, Mr. Gerlitz will be entitled to all amounts deposited in his favor in pension funds, including payments made for severance pay. The agreement also contains customary assignment of rights, confidentiality, non-competition and non-solicitation provisions. The non-competition and non-solicitation provisions apply during Mr. Gerlitz’s employment and for one year thereafter.

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Ofer Segev

On March 12, 2007, we entered into an employment agreement with Ofer Segev. Mr. Segev began his employment on March 1, 2007 and on April 1, 2007 he assumed the role of chief financial officer and executive vice president. The current term of the agreement expires on December 31, 2010, but is automatically extended for successive one-year periods, unless terminated by either party upon written notice no later than six months prior to the expiration of the then-existing term. Mr. Segev’s compensation is denominated in NIS. His annual base salary for 2010, which was approved by the Compensation Committee, is approximately $268,870, and the Compensation Committee also granted him an annual cash incentive award for 2010 with a target of approximately $258,551, based on the achievement of certain goals relating to the performance of the company, using the dollar-to-NIS exchange rate of March 31, 2010. We may terminate the agreement by providing Mr. Segev with nine months of prior written notice, and Mr. Segev may terminate the agreement by providing us with six months of prior written notice. However, we may terminate Mr. Segev for cause immediately if he is convicted of committing a felony. Except for termination by us for serious misconduct, Mr. Segev will be entitled to all amounts deposited in his favor in pension funds, including payments made for severance pay. The agreement also contains customary assignment of rights, confidentiality, non-competition and non-solicitation provisions. The non-competition and non-solicitation provisions apply during Mr. Segev’s employment and for one year thereafter.

Michael Zinderman

On April 1, 2006, we entered into an employment agreement with Michael Zinderman, effective as of January 1, 2006, and amended on April 1, 2007. The current term of the agreement expires on December 31, 2010, but is automatically extended for successive one year periods unless terminated as described below. Mr. Zinderman’s compensation is denominated in NIS. His annual base salary for 2010, which was approved by the Compensation Committee, is approximately $275,945, and the Compensation Committee also granted him an annual cash incentive award for 2010 with a target of approximately $215,459, based on the achievement of certain goals relating to the performance of his business unit and the company, using the dollar-to-NIS exchange rate of March 31, 2010. We may terminate Mr. Zinderman’s employment by providing twelve months prior notice, and Mr. Zinderman may terminate his employment by providing us with twelve months prior notice. In either event, Mr. Zinderman will be entitled to all amounts deposited in his favor in pension funds, including payments made for severance pay. The agreement also contains customary assignment of rights, confidentiality, non-competition and non-solicitation provisions. The non-competition and non-solicitation provisions apply during Mr. Zinderman’s employment and for one year thereafter.

Ivan Hruška

We entered into an employment contract with Mr. Hruška, dated December 29, 2006, replacing a previous employment contract with him. On February 26, 2010, Mr. Hruška resigned from all of his executive positions with Ness and its subsidiaries, effective March 31, 2010. Mr. Hruška’s compensation was originally denominated in SKK and was translated to euro when the Slovak Republic joined the euro zone on January 1, 2009. His annual base salary for 2010, which was approved by the Compensation Committee, was approximately $398,207, using the dollar-to-euro exchange rate of March 31, 2010. As a result of his intended departure, the Compensation Committee did not grant him an annual cash incentive award for 2010. Under his employment agreement, either party was permitted to terminate the agreement by giving six months’ prior written notice to the other party. The agreement also contained customary assignment of rights, confidentiality, non-competition and non-solicitation provisions. The non-competition and non-solicitation provisions applied during Mr. Hruška’s employment and for six months and one year thereafter, respectively.

Effective March 31, 2010, we entered into a separation agreement with Mr. Hruška. Under the terms of the separation agreement, Mr. Hruška’s employment terminated on that date and he received a lump severance payment of approximately $323,000. We also agreed to enter into a consulting agreement with a company held by Mr. Hruška, under the terms of which this company will receive approximately $294,000 over a period of 21 months in return for business development and strategic consulting services to be supplied by Mr. Hruška, which amount is to be paid according to certain milestones. In consideration of these benefits, Mr. Hruška extended the term of his non-compete and non-solicitation restrictions through December 31, 2011 and he released us from any and all claims related to his employment with us. At the end of the consulting

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period and the non-compete term, we will release to Mr. Hruška those RSUs and options granted to him on December 8, 2008 which have vested by that date; all other options granted to him were cancelled.

Effi Kotek

On March 11, 2010, we entered into an employment agreement with Ofer Kotek, replacing a previous employment contract with him. Mr. Kotek is employed on an at-will basis. Mr. Kotek’s compensation is denominated in NIS. His annual base salary for 2010, which was approved by the Compensation Committee, is approximately $245,720, and the Compensation Committee also granted him an annual cash incentive award for 2010 with a target of approximately $188,527, based on the achievement of certain goals relating to the performance of the company, using the dollar-to-NIS exchange rate of March 31, 2010. We may terminate the agreement by providing Mr. Kotek with six months of prior written notice, and Mr. Kotek may terminate the agreement by providing us with six months of prior written notice. However, we may terminate Mr. Kotek for cause immediately if he is convicted of committing a felony. In any of these events, Mr. Kotek will be entitled to all amounts deposited in his favor in pension funds, including payments made for severance pay. The agreement also contains customary assignment of rights, confidentiality, non-competition and non-solicitation provisions. The non-competition and non-solicitation provisions apply during Mr. Kotek’s employment and for one year thereafter.

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Outstanding Equity Awards at Fiscal Year-End

The following table sets forth certain information regarding equity awards held by the named executive officers as of December 31, 2009. All of the options held as of this date were fully vested, except as noted.