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Notice is hereby given that an Annual General Meeting of Shareholders (the "Meeting") of Mind C.T.I. Ltd. (the "Company") will be held on Thursday, April 7, 2005 at 10:00 A.M. (Israel time), at the offices of the Company, Industrial Park, Building 7, Yoqneam 20692, Israel, for the following purposes:

1. to re-elect Mr. Rimon Ben-Shaoul, a member of Class II of the Board of Directors of the Company, whose term of office expires at the Meeting, as a director of the Company; and
2. to re-elect Mr. Zamir Bar-Zion, whose term of office expires on June 27, 2005, as an outside director of the Company and to amend the Company's Articles of Association; and
3. to elect Mr. Menahem Shalgi as an outside director of the Company; and
4. to approve compensation for the Company's directors; and
5. to re-appoint Kesselman & Kesselman, certified public accountants in Israel and a member of PricewaterhouseCoopers International Limited, as the Company's independent auditor until the close of the following Company's Annual General Meeting and to authorize the Board of Directors of the Company to determine its remuneration or to delegate the Audit Committee thereof to do so; and
6. to discuss the Company's audited financial statements for the year ended December 31, 2004; and
7. to transact such other business as may properly come before the Meeting or any adjournments or postponements thereof.

Shareholders of record at the close of business on March 10, 2005 are entitled to notice of, and to vote at, the Meeting. All shareholders are cordially invited to attend the Meeting in person.

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

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

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

Dated: March 11, 2005

This Proxy Statement is furnished to the holders of Ordinary Shares, NIS 0.01 per share nominal value (the "Ordinary Shares"), of Mind C.T.I. Ltd. (the "Company") in connection with the solicitation by the Board of Directors of proxies for use at the Annual General Meeting of Shareholders (the "Meeting"), or at any adjournment or postponements thereof, pursuant to the accompanying Notice of Annual General Meeting of Shareholders. The Meeting will be held on Thursday April 7, 2005 at 10:00 A.M. (Israel time), at the offices of the Company, Industrial Park, Building 7, Yoqneam 20692, Israel.

The agenda of the Meeting shall be as follows:

1. to re-elect Mr. Rimon Ben-Shaoul, a member of Class II of the Board of Directors of the Company, whose term of office expires at the Meeting, as a director of the Company; and
2. to re-elect Mr. Zamir Bar-Zion, whose term of office expires on June 27, 2005, as an outside director of the Company and to amend the Company's Articles of Association; and
3. to elect Mr. Menahem Shalgi as an outside director of the Company; and
4. to approve compensation for the Company's directors; and
5. to re-appoint Kesselman & Kesselman, certified public accountants in Israel and a member of PricewaterhouseCoopers International Limited, as the Company's independent auditor until the close of the following Company's Annual General Meeting and to authorize the Board of Directors of the Company to determine its remuneration or to delegate the Audit Committee thereof to do so; and
6. to discuss the Company's audited financial statements for the year ended December 31, 2004; and
7. to transact such other business as may properly come before the Meeting or any adjournments or postponements thereof.

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

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

Proxies for use at the Meeting are being solicited by the Board of Directors of the Company. Only shareholders of record at the close of business on March 10, 2005 will be entitled to vote at the Meeting. Proxies are being mailed to shareholders on or about March 15, 2005 and will be solicited chiefly by mail. However, certain officers, directors, employees and agents of the Company, none of whom will receive additional compensation therefore, may solicit proxies by telephone, telegram or other personal contact. The Company will bear the cost for the solicitation of the proxies, including postage, printing and handling, and will reimburse the reasonable expenses of brokerage firms and others for forwarding material to beneficial owners of shares.

On March 9, 2005, the Company had outstanding 21,433,980 Ordinary Shares, each of which is entitled to one vote upon each of the matters to be presented at the Meeting. Two or more shareholders holding the Ordinary Shares conferring in the aggregate at least 25% of the outstanding Ordinary Shares, present in person or by proxy, will constitute a quorum at the Meeting. If within an hour from the time appointed for the Meeting a quorum is not present, the Meeting shall stand adjourned to the same day in the next week, at the same time and place, at which adjourned meeting, any two shareholders shall constitute a quorum.

Name of Beneficial Owners	Total Shares Beneficially Owned(1)	Percentage of Ordinary Shares (2)
Monica Eisinger	4,074,000	19.01%
Lior Salansky	1,491,140	6.96%
Oberweis Asset Management,Inc.	1,123,000	5.24%

(1) Shares beneficially owned include shares that may be acquired pursuant to options that are exercisable within 60 days of March 9, 2005, and are treated as outstanding only for purposes of determining the percentage owned by such person. (2) Based on 21,433,980 ordinary shares outstanding on March 9, 2005.

Mr. Rimon Ben-Shaoul is a member of Class II of the Board of Directors, and his term of office shall expire at the Meeting. If Mr. Rimon Ben-Shaoul is re-elected, his term of office shall expire at the Company's 2008 Annual General Meeting of shareholders.

Mr. Ben-Shaoul has served as a director of our company since August 2002. Mr. Ben-Shaoul has served as the Co-Chairman, President and Chief Executive Officer of Koonras Technologies Ltd., an investment company controlled by Polar Investments Ltd., since February 2001. From 1997 to 2001 Mr. Ben-Shaoul served as the President and Chief Executive Officer of Clal Industries and Investments Ltd. From 1985 to 1997 Mr. Ben-Shaoul was President and Chief Executive Officer of Clal Insurance Company Ltd. From 1997 to 2001 Mr. Ben-Shaoul served as Chairman of Scitex Corporation Ltd. and currently Mr. Ben-Shaoul serves as Chairman of Cimatron Ltd. and Dor Chemicals Ltd. and as a director of Arel Communications & Software Ltd., Nice Systems Ltd. and B.V.R. Systems Ltd. Mr. Ben-Shaoul also serves as a director on the boards of several privately held companies. Mr. Ben-Shaoul holds an M.B.A. and a B.A. in Economics, both from Tel Aviv University.

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

"RESOLVED, to re-elect Mr. Ben-Shaoul as a Class II director of the Company to serve until the Annual General Meeting to be convened in the third year following this re-election."

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

The Company's Board of Directors is divided into three classes of directors, denominated Class I, Class II and Class III. The outside directors are required to be elected by the shareholders, but they will not be members of any class. The term of service of an outside director is three years and may be extended for an additional three years. All of the outside directors of a company must be members of its audit committee and each other committee of a company's board of directors that is authorized to carry out one or more powers of the board of directors must include at least one outside director.

At an Annual General Meeting of the Company's shareholders held on June 27, 2002, the shareholders elected Mr. Zamir Bar-Zion as an outside director of the Company for a three-year term of service. At the Meeting, shareholders will be asked to re-elect Mr. Zamir Bar-Zion for a second three-year term of service as an outside director of the Company on the same terms as approved for outside directors at the Extraordinary Meeting of the Company's shareholders held on February 12, 2001. According to the Israeli Companies Law, the term of a director commences upon his election, unless the company's articles of association permit a later effective date. Since the Meeting will be held before the expiration of Mr. Zamir Bar-Zion's first term, we are asking the shareholders to amend our Articles of Association to allow Mr. Zamir Bar-Zion's second term to commence on the expiration date of his first term.

The Company has received a declaration from Mr. Zamir Bar-Zion that he fulfills all the qualifications of an outside director under the Companies Law.

If the foregoing amendments are approved, we will restate our Articles of Association to reflect the amendments approved at the Meeting. Our Articles of Association will be referred to thereafter as the "Third Amended and Restated Articles of Association" of the Company.

A brief biography of Mr. Zamir Bar-Zion is set forth below:

Mr. Bar-Zion has served as an external director of our company since June 2002. Mr. Bar-Zion has served as the Managing Director of Investment Banking at Excellence Nessuah/Piper Jaffray since May 2004. Mr. Bar-Zion was a Managing Director for investment banking at Nessuah Zannex & Co. from 1998 until 2001. Prior to joining Nessuah Zannex & Co., Mr. Bar-Zion served as a private financial consultant and a senior partner at Evergreen Canada - Israel Investments Ltd. Mr. Bar-Zion currently serves as a director of Top Image Systems Ltd., Attunity Ltd. and Lapidot Cheletz Ltd. Mr. Bar-Zion holds a B.S. degree in Computer Science and Finance from the New York Institute of Technology, an M.A. degree in Finance from Pace University and has graduated from the Program of Management Development at Harvard University.

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

"RESOLVED, that the Company's Second Amended Articles of Association be amended by restating Article 39(d) in its entirety and by adding Article 39(e) thereof as follows:

' (d) Notwithstanding anything to the contrary in the foregoing provisions of Article 39, the foregoing provisions of this Article 39 shall not apply to the Company's External Directors, who shall not be members of any class and shall serve pursuant to the provisions of the Companies Law.

(e) Notwithstanding anything to the contrary herein, the term of a Director may commence as of a date later than the date of the Shareholder Resolution electing said Director, if so specified in said Shareholder Resolution.'

RESOLVED, that Mr. Zamir Bar-Zion be re-elected to a second term as an outside director of the Company, effective June 27, 2005."

The foregoing amendment to our Articles of Association require the affirmative vote of a majority of the shares present, in person or by proxy, and voting on the matter. The election of outside directors requires the affirmative vote of the holders of a majority of the Ordinary Shares present, in person or by proxy, and voting on the matter, provided that either (i) at least one third of the shares of non-controlling shareholders are voted in favor of the election of the outside directors or (ii) the total number of shares of non-controlling shareholders voted against the election of the outside directors does not exceed one percent of the outstanding Ordinary Shares.

A brief biography of Mr. Menahem Shalgi is set forth below:

Mr. Menahem Shalgi has over 35 years of experience at the high-tech industry. Mr. Shalgi served at Amdocs as Vice President of Business Development and M&A from 1998 to 2003 and as Vice President and Executive Account Manager from 1993 to 1998. From 1991 to 1993 Mr. Shalgi served as the CEO of WIZTEC Ltd. Prior to joining WIZTEC Ltd. Mr. Shalgi served at Amdocs at which he held a number of positions. Mr. Shalgi was a member of the Information Processing Association (I.P.A.) council, of the I.P.A. Steering Committee and Editorial Board and won several awards and fellowship, including awards by the I.P.A. for best article and for planning a complex data entry system, the Australian government award for project implementation and other awards. Mr. Shalgi holds a B.A. degree in Economics and Statistics from Tel-Aviv University and an M.Sc. in Computer Sciences from Weizmann Institute for Science.

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

"RESOLVED, to elect Mr. Menahem Shalgi as an outside director of the Company for a term of three years."

The election of outside directors requires the affirmative vote of the holders of a majority of the Ordinary Shares present, in person or by proxy, and voting on the matter, provided that either (i) at least one third of the shares of non-controlling shareholders are voted in favor of the election of the outside directors or (ii) the total number of shares of non-controlling shareholders voted against the election of the outside directors does not exceed one percent of the outstanding Ordinary Shares.

In order to align the interests of our directors with those of our shareholders, our Audit Committee and Board of Directors have approved, subject to shareholder approval, the grant of 18,000 options to purchase Ordinary Shares to each of our five directors who will be members of our Board of Directors as of the end of the Meeting. The exercise price of the options will equal to the per share closing price of our Ordinary Shares on the Nasdaq Stock Market on the trading date immediately preceding the Meeting. The options will vest in three equal annual installments and will expire on February 8, 2012.

The regulations promulgated under the Companies Law relating to the compensation of outside directors allow the grant of options to outside directors, in addition to their cash compensation, only upon certain conditions. For example, the options must be granted in the framework of a plan for option grants to officers and all the directors of the company who are not controlling shareholders.

As previously approved, we pay our outside directors an annual fee of $8,000 and a participation fee of $400. According to applicable regulations, all outside directors are required to receive equal compensation. Our Audit Committee and Board of Directors have approved paying such fees to our other non-executive directors, as well. Accordingly, at the Meeting, the shareholders will be asked to approve such fees for Mr. Rimon Ben-Shaoul.

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

"RESOLVED, that the grant to each of the five directors who shall be members of the Company's Board of Directors as of the end of the Meeting of options to purchase up to 18,000 Ordinary Shares on the terms approved by the Company's Audit Committee and Board of Directors is hereby approved.

RESOLVED, than an annual fee of $8,000 and a participation fee of $400 for Mr. Rimon Ben-Shaoul is hereby approved."

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

Under the Israeli Companies Law, 5759 - 1999 (the "Companies Law"), the shareholders of the Company are authorized to appoint the Company's auditor and to authorize the Board of Directors to determine its remuneration. To comply with the Sarbanes-Oxley Act of 2002, the Company's Board of Directors will authorize its Audit Committee to determine the Auditor's remuneration for audit and non-audit services. It is proposed that the Auditor, Kesselman & Kesselman, be re-appointed as the Company's independent auditor until the close of the following Annual General Meeting.

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

"RESOLVED, that the Company's Auditor, Kesselman & Kesselman, be, and it hereby is, re-appointed as the auditor of the Company until the close of the next Annual General Meeting, and that the Board of Directors be, and it hereby is, authorized to determine its remuneration or to delegate the Audit Committee of the Company to do so."

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

We have included a copy of our audited financial statements for the year ended December 31, 2004 (the "Financial Statements") in a Form 6-K, which will be filed with the Securities and Exchange Commission (SEC) on or about March 15, 2005. You may read and copy this report without charge at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such material may be obtained by mail from the Public Reference Branch of the SEC at such address, at prescribed rates. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our SEC reports are also available to the public at the SEC's website at http://www.sec.gov. These reports are not a part of this Proxy Statement.

The Financial Statements were approved by the Board of Directors as required by the Companies Law.

The Company will hold a discussion with respect to the Financial Statements at the Meeting.

Dated: March 11, 2005