Economics for Investors

Magic Software has announced today that its board of directors has declared a cash dividend in the amount of US$0.50 per share and in the aggregate amount of approximately US$16.0 million.

The dividend is payable January 25, 2010 to all of the Company's shareholders of record at the close of the NASDAQ Global Market on January 11, 2010. In accordance with Israeli tax law, the Company will deduct 20% withholding tax of the dividend amount payable to each shareholder, subject to applicable exemptions. The Company has not established a dividend policy with respect to future dividend distributions.

The dividend will be paid in US dollars on the ordinary shares of Magic Software Enterprises that are traded on the Tel Aviv Stock Exchange (TASE), and on the ordinary shares of Magic Software Enterprises that are traded on the NASDAQ Global Market.