<PAGE>
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
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
PICK COMMUNICATIONS CORP.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
PICK COMMUNICATIONS CORP.
- -----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
PICK Communications Corp.
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on November 4, 1998
--------------------
To The Stockholders of PICK Communications Corp.:
Notice is hereby given that the Annual Meeting of Stockholders (the
"Annual Meeting") of PICK Communications Corp., a Nevada Company (the
"Company"), will be held at the Company's principal executive offices located at
Wayne Interchange Plaza II, 155 Route 46 West, Wayne, New Jersey 07470, at 11:00
a.m., Eastern Standard Time, on November 4, 1998, for the following purposes:
1. To elect six Directors of the Company to serve for the ensuing
year and until their successors are elected and qualify -
Proposal 1.
2. To ratify the appointment of Goldstein Golub Kessler LLP as
the Company's auditors - Proposal 2.
3. To transact such other business as may properly come before
the Annual Meeting or adjournments thereof.
The Board of Directors of the Company has fixed the close of business
on September 18, 1998 as the record date for determining the Stockholders
entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors
Raymond M. Brennan,
Secretary
Wayne, New Jersey
September 29, 1998
IMPORTANT
---------
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT TO THE COMPANY. THE PROXY
MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED, AND STOCKHOLDERS EXECUTING
PROXIES MAY ATTEND THE ANNUAL MEETING AND VOTE THERE IN PERSON SHOULD THEY SO
DESIRE.
<PAGE>
PICK Communications Corp.
Wayne Interchange Plaza II
155 Route 46 West
Wayne, New Jersey 07470
(973) 812-7425
----------------
Proxy Statement
----------------
The Board of Directors of PICK Communications Corp., a Nevada
corporation (the "Company") presents this Proxy Statement to all Stockholders
and solicits their proxies for the Annual Meeting of Stockholders (the "Annual
Meeting"), to be held at the Company's principal executive offices located at
Wayne Interchange Plaza II, 155 Route 46 West, Wayne, New Jersey 07470, at 11:00
a.m., Eastern Standard Time, on November 4, 1998. All proxies duly executed and
received will be voted on all matters presented at the Annual Meeting in
accordance with the instructions given by such proxies. In the absence of
specific instructions, proxies so received will be voted FOR the named nominees
for election to the Company's Board of Directors and FOR the ratification of
Goldstein Golub Kessler LLP as the Company's independent public accountants. The
Board of Directors anticipates that all of the nominees will be available for
election and does not know of any other matter that may be brought before the
Annual Meeting. In the event that any other matter should come before the Annual
Meeting or that any nominee is not available for election, the persons named in
the enclosed proxy will have discretionary authority to vote all proxies not
marked to the contrary with respect to such matter in accordance with their best
judgment. The proxy may be revoked at any time before being voted. This Proxy
Statement is being mailed on or about September 29, 1998.
A total of 37,909,202 shares of Common Stock of the Company were
outstanding as of September 18, 1998. The Common Stock is the only outstanding
class of securities of the Company entitled to vote. Each share of Common Stock
has one vote. Only Stockholders of record as of the close of business on
September 18, 1998 will be entitled to vote at the Annual Meeting or any
adjournment or adjournments thereof.
The affirmative vote of a majority of the votes cast by holders of
Common Stock on the Record Date present in person or by proxy at the Annual
Meeting and entitled to vote is required to adopt each matter considered at the
Meeting. Shares represented by proxies that are marked "abstain" with respect to
all matters other than the election of Directors and proxies that are marked to
deny discretionary authority on all other matters will only be counted for the
purpose of determining the presence of a quorum. Votes withheld in connection
with the election of one or more nominees for Director will not be counted as
votes cast for such individuals. In addition, where brokers are prohibited from
exercising discretionary authority for beneficial owners who have
<PAGE>
not provided voting instructions (commonly referred to as "broker non-votes"),
those shares will not be included in the vote totals.
A list of Stockholders entitled to vote at the Annual Meeting will be
open to examination by any Stockholders, for any purpose germane to the Annual
Meeting, at the Company's executive offices, at the address indicated on the
Notice of Annual Meeting, during ordinary business hours for ten (10) days prior
to the Annual Meeting. This list will also be available for review at the Annual
Meeting.
ACTIONS TO BE TAKEN AT THE ANNUAL MEETING
Proposal 1 - Election of Directors
The Board of Directors consists of six incumbent Directors standing for
re-election including Hans d'Orville who was appointed by the Board in April
1998. Proxies not marked to the contrary will be voted "FOR" the election of the
persons listed below:
<TABLE>
<CAPTION>
Positions with Year First
Name Age the Company Became Director
- ---- --- ----------- ---------------
<S> <C> <C> <C>
Diego Leiva 48 Chairman, Chief Executive 1995
Officer, President, Director
Raymond M. Brennan 61 Vice President, Secretary, Director 1995
Robert R. Sams 60 Director 1995
Ricardo Maranon 54 Director 1995
Marilou C. Halvorsen 33 Director 1997
Hans d'Orville 49 Director 1998
</TABLE>
Biographical Information about Nominees
Diego Leiva founded Public Info/Comm Kiosk, Inc., a New Jersey
corporation ("PICK"), which is currently a wholly-owned subsidiary of the
Company, in August 1992, and has served as PICK's Chairman of the Board, Chief
Executive Officer and President since that time. He has held the same positions
with the Company since its reorganization pursuant to the Reorganization Plan
(as defined below) in September 1995. From 1989 through July 1992, Mr. Leiva
served as Director of Sales for Apertus Technologies, Inc., a computer
telecommunications sales firm.
-2-
<PAGE>
Raymond M. Brennan has served as Vice President and Secretary of PICK
since May 1994 and Director since June 1994. He has held the same positions with
the Company since September 1995. From April 1990 to April 1994, Mr. Brennan
served as Executive Vice President and General Counsel of EOL, Inc., a full
service event production and marketing company.
Robert R. Sams has served as director of the Company since September
1995 and of PICK since November 1994. He has been engaged in merchant banking,
corporate finance, acquisitions and financial advisory services since founding
Saicol Limited in 1983.
Ricardo Maranon has served as director of the Company since September
1995 and of PICK since December 1994. He has served as President of the
Florida-based advertising agency Maranon & Associates Advertising since founding
that company in 1985.
Marilou C. Halvorsen, has served as director of the Company since June
1997. She has been Executive Director of the New Jersey Amusement Association
since 1995 and is a member of the Board of Directors of the New Jersey Travel
Industry Association. Ms. Halvorsen was a producer for Entertainment on Location
from February 1990 to February 1995.
Hans d'Orville, has served as a director of the Company since April
1998. He holds both a Masters and a Doctorate in Economics from the University
of Konstanz in Germany. Since 1975, he has served in various capacities in
international organizations and diplomacy. His most recent positions include
Executive Coordinator of the InterAction Council and Director of Information
Technologies for Development Programme at the United Nations Development
Programme. He is a member of several international committees and boards.
Management has no reason to believe that any of the nominees will not
be a candidate or will be unable to serve. In the event that any nominee should
become unable or unwilling to serve as a Director, however, Proxies will be
voted for the election of any person substituted for such nominee designated by
the incumbent Directors. All Directors of the Company hold office until the next
annual meeting of Stockholders and until their successors are elected and
qualify.
INFORMATION ABOUT THE BOARD OF DIRECTORS,
COMMITTEES OF THE BOARD, AND EXECUTIVE OFFICERS
Meetings of The Board of Directors And Information Regarding Committees
Since January 1996, the Company has had two standing committees of the
Board of Directors, the Compensation Committee and the Audit Committee. Mr.
Maranon and Ms. Halvorsen currently comprise the Compensation Committee. Among
the duties of this Committee are the making of recommendations to the Board of
remuneration for officers and key sales persons of the Company, the
determination of the number and issuance of stock options and the review of any
compensation and incentive programs for executive officers, consultants and
others.
-3-
<PAGE>
The members of the Audit Committee are Messrs. Leiva and Maranon and
Ms. Halvorsen. The duties of the Audit Committee include recommending the
independent public accountants to serve as the Company's auditors, reviewing and
considering actions of management in matters relating to audit functions,
reviewing with such accountants the scope and results of their audit engagement,
reviewing the financial statements and information included in the Company's
filings with the Securities and Exchange Commission, reviewing the Company's
system of internal controls and procedures and reviewing the effectiveness of
procedures intended to prevent violations of laws and regulations.
The Board of Directors held six meetings in 1997. All Directors
attended each meeting.
The Compensation Committee held two meetings in 1997. Both members of
the Compensation Committee attended both meetings. The Audit Committee held one
meeting in 1997. Each member of the Audit Committee attended this meeting.
Executive Officers
Officers of the Company are elected annually by, and serve at the
discretion of the Board of Directors. The names and business backgrounds of
Executive Officers of the Company and of PICK who are not Directors of the
Company are:
<TABLE>
<CAPTION>
Positions with Year First
Name Age the Company & PICK Became Officer
- ---- --- ------------------ --------------
<S> <C> <C> <C>
Robert Bingham 50 Vice President and Chief 1997
Financial Officer
Karen M. Quinn 50 Vice President of Operations and 1995
Corporate Communications
Niles D. Ring 64 Vice President of Human Resources 1998
</TABLE>
Robert Bingham has been Vice President and Chief Financial Officer of
the Company since September 17, 1997. He previously served as a director of
Frankel & Topche P.C., CPAs from February, 1995 through September, 1997; Vice
President and Chief Financial Officer of Smith Management Company (a
privately-held investment management company) from April, 1993 through April,
1994; and as Vice President Finance of Prime Hospitality Corp. (a NYSE-listed
hotel investment and management company) from November 1985 through April 1993.
Karen M. Quinn has been Vice President of Operations and Corporate
Communications of the Company since September 1995. Ms. Quinn has also worked
for PICK since December 1992, having become its Vice President of Operations in
May 1994. Previously, Ms. Quinn was a Business Manager in the health care
industry for 22 years.
-4-
<PAGE>
Niles D. Ring, Vice President/Human Resources, joined the Company in
September 1998, having been Human Resources specialist with Bristol-Myers
Squibb, and founding Director of Bristol-Myers Career Center, Evansville,
Indiana since 1992.
Compliance with Section 16(a) of the Exchange Act
Pursuant to Section 16 of the Securities Exchange Act of 1934, the
Company's Directors and executive officers and beneficial owners of more than
10% of the Company's Common Stock are required to file certain reports, within
specified time periods, indicating their holdings of and transactions in the
Common Stock and derivative securities. Based solely on a review of such reports
provided to the Company and written representations from such persons regarding
the necessity to file such reports, the Company is not aware of any failures to
file reports or report transactions in a timely manner during the Company's
fiscal year ended December 31, 1997.
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by,
or paid to the Executive Officer named therein for all services rendered to the
Company during the three fiscal years ending December 31, 1997. No other
Executive Officer of the Company received total compensation in excess of
$100,000 during any of the last three years:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards Payouts
--------- ----------
Other Restrict- Securities
Annual ed Underlying
Name and Compen- Stock Options/
Principal sation Award(s) SARs
Positions Year Salary ($) Bonus ($) ($) ($) (#)
- --------- ---- ---------- --------- ------- --------- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Diego Leiva 1997 $150,000 $ 0 0 0 750,000 (2)
Chief Executive 1996 $150,000 $ 0 0 0 500,000 (2)
Officer and 1995 $ 93,750(1) $ 0 0 0 0
Chairman of the 1994 $ 76,523(1) $ 0 0 0 0
Board of Directors
</TABLE>
(1) Mr. Leiva was entitled to compensation of $150,000 in both 1995 and 1994.
The amounts not paid to Mr. Leiva, $56,250 for 1995 and $73,477 for 1994,
or an aggregate of $129,727 were paid in 1996 as follows: (i) on December
3, 1996, the Company and Mr. Leiva agreed to an exchange of $100,000 of
such accrued salary for 400,000 shares of Common Stock of the Company at a
purchase price per share of $.25, the closing asked price per share of
such stock on that date; (ii) the remaining balance of $29,727 in unpaid
salary accrued to Mr. Leiva was paid in cash to Mr. Leiva in 1996.
(2) Options to purchase 500,000 shares granted in 1996, at prices varying
from $0.875 to $0.9625 per share were canceled and re-issued in 1997 at
$0.19 per share.
-5-
<PAGE>
The Company maintains a $250,000 term life insurance policy for Diego Leiva, for
which the Company paid $1,257 and $1,186 in 1997 and 1996, respectively.
Option Grants in Last Fiscal Year
The table below contains certain information concerning stock options granted to
the Named Executive Officer, named in the Summary Compensation Table, during the
year ended December 31, 1997:
<TABLE>
<CAPTION>
Potential Realizable Value at
Number of Percent of Total Assumed Annual Rates of Stock Price
Securities Options Appreciation for Option Term
Underlying Granted to Exercise -----------------------------------
Options Employees in Price Expiration 5% 10%
Granted Fiscal year ($/Share) Date ($) ($)
------- ----------- --------- ---- --- ---
<S> <C> <C> <C> <C> <C> <C>
Diego Leiva 250,000 9.1% $0.30 June 2, 2000 $11,822 $24,825
131,578 4.8% 0.19 July 9, 2000 3,941 8,275
368,422 13.4% 0.19 July 9, 2000 11,034 23,170
</TABLE>
Aggregated Option Exercises in Last Fiscal Year and Year End Option Values
The table below includes information regarding the value realized on option
exercises and the market value of unexercised options held by the Named
Executive Officer named in the Summary Compensation Table during the year ended
December 31, 1997:
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Shares Options Options
Acquired at FY-End(#) at FY-End (S)
on Exer- Value Exercisable/ Exercisable/
Name cise (#) Realized($) Unexercisable Unexercisable
---- -------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
Diego Leiva 0 0 750,000/0 45,000/0 (1)
</TABLE>
(1) As of December 31, 1997, the market value of the shares was $0.28 cents,
compared to the option exercise prices of $0.19 and $0.30.
-6-
<PAGE>
Employee Benefits Plans
1996 Stock Option Plan
In January 1996, the Board of Directors adopted the Pick Communications
Corp. 1996 Stock Option Plan (the "1996 Plan"), which was approved by the
Company's stockholders in January 1997. The 1996 Plan provides for the grant to
qualified employees (including officers and directors) of the Company of options
to purchase shares of Common Stock. A total of 7,500,000 shares of Common Stock
have been reserved for issuance upon exercise of stock options granted under the
1996 Plan. The 1996 Plan is administered by the Board of Directors or a
committee of the Board of Directors (the "Committee"). The Committee has
complete discretion to select the optionee and to establish the terms and
conditions of each option, subject to the provisions of the 1996 Plan. Options
granted under the 1996 Plan may or may not be "incentive stock options" as
defined in Section 422 of the Internal Revenue Code ("Incentive Options")
depending upon the terms established by the Committee at the time of grant, but
the exercise price of options granted may not be less than 100% of the fair
market value of the Common Stock as of the date of grant (110% of the fair
market value if the grant is an Incentive Option granted to an employee who owns
more than 10% of the outstanding Common Stock). Options may not be exercised
more than 10 years after the grant (five years if the grant is an Incentive
Option to any employee who owns more than 10% of the outstanding Common Stock).
Options granted under the 1996 Plan are not transferable and may be exercised
only by the respective grantees during their lifetimes or by their heirs,
executors or administrators in the event of death. Under the 1996 Plan, shares
that are the subject of canceled or terminated options are reserved for
subsequently granted options. The number of options outstanding and the exercise
price thereof are subject to adjustment in the case of certain transactions such
as mergers, recapitalizations, stock splits or stock dividends.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 18, 1998, the number of
shares of the Company's outstanding Common Stock beneficially owned by (i) each
Director and nominee for Director of the Company, (ii) each Executive Officer
named under the heading "EXECUTIVE OFFICERS" above, (iii) each beneficial owner
of more than 5% of the Company's Common Stock and (iv) all of the Company's
Executive Officers and Directors as a group:
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership (1) Percentage (2)
- ------------------- ------------------------ --------------
Diego Leiva (11) 13,288,609 (3)(4) 34.2%
Robert R. Sams 1,115,000 (5) 2.9%
Ricardo Maranon 1,276,000 (5)(6) 3.3%
-7-
<PAGE>
Raymond M. Brennan (11) 1,411,500 (7)(8) 3.6%
Karen M. Quinn (11) 1,291,250 (8) 3.3%
Robert S. Bingham (11) 575,000 (9) 1.5%
Marilou C. Halvorsen 590,000 (10) 1.5%
Hans d' Orville 109,000 (12) 0.3%
All executive officers and directors
as a group (8 persons) 19,656,359 (13) 45.1%
(1) Unless otherwise noted, all shares are beneficially owned and the sole
voting and investment power is held by the person indicated.
(2) Based on 37,902,202 shares outstanding as of September 18, 1998. Each
beneficial owner's percentage ownership is determined by assuming that
options or warrants that are held by such person and which are
convertible or exercisable within sixty (60) days of such date pursuant
to Rule l3d-3 under the Securities Exchange Act of 1934 (the "Exchange
Act") have been converted or exercised.
(3) Includes 4,290,000 shares beneficially owned by Mr. Leiva's wife.
(4) Includes incentive stock options to purchase up to l31,578 shares of
the Company's Common Stock at $0.19 per share, 250,000 shares at $0.30
per share and 150,000 shares at $0.41 per share and non-qualified stock
options to purchase up to 368,422 shares of the Company's Common Stock
at $0.19 per share pursuant to options under the Plan.
(5) Includes non-qualified stock options to purchase up to 900,000 shares
of the Company's Common Stock, including 500,000 shares at $0.17 per
share, 250,000 shares at $0.27 per share and 150,000 shares at $0.37
per share pursuant to the Plan.
(6) Includes 37,250 shares of the Company's Common Stock beneficially owned
by Mr. Maranon's daughter.
(7) Includes 250,000 shares beneficially owned by Mr. Brennan's wife.
(8) Includes incentive stock options to purchase up to 191,176 shares at
$0.17 per share, 250,000 shares at $.27 per share and 150,000 shares at
$0.37 per share and non-qualified stock options to purchase up to
308,824 shares at $0.17 per share pursuant to the Plan.
-8-
<PAGE>
(9) Includes non-qualified stock options to purchase up to 50,000 shares at
$0.37 per share and incentive stock options to purchase up to 250,000
shares at $0.25 per share. Excludes incentive stock options to purchase
up to 200,000 shares and nonqualified stock options to purchase up to
50,000 shares, all at $0.50 per share, vesting in September, 1999.
(10) Includes non-qualified stock options to purchase up to 250,000 shares
at $0.27 per share and 300,000 shares at $0.37 per share pursuant to
the Plan.
(11) The address of this person is c/o the Company, 155 Route 46 West, 3rd
Floor, Wayne, New Jersey 07470.
(12) Includes non-qualified stock options to purchase up to 100,000 shares
at $0.99 per share.
(13) Includes non-qualified stock options and incentive stock options to
purchase up to 3,650,000 shares by the parties named above and at the
prices per share stated in footnotes (4), (5), (8), (9), (10) and (12).
Certain Relationships and Related Transactions
On June 2, 1997, the Company granted 250,000 options to purchase shares
of Common Stock of the Company each to Diego Leiva, Raymond Brennan, Karen
Quinn, Robert Sams, Ricardo Maranon and Marilou Halvorsen, all exercisable at
$0.27 per share, except that Mr. Leiva's exercise price is $0.30 (10% over the
market value on June 2, 1997).
On July 9, 1997, the Company granted 500,000 options to purchase shares
of Common Stock of the Company each to Diego Leiva, Raymond Brennan, Karen
Quinn, Robert Sams and Ricardo Maranon, 411 exercisable at $0.17 per share,
except that Mr. Leiva's exercise price is $0.19 per share (10% over the market
value on July 9, 1997).
On September 16, 1997, the Company granted Robert Bingham 250,000
options to purchase shares of Common Stock of the Company exercisable at $0.25
per share and 250,000 options exercisable at $0.50 per share.
On February 20, 1998, the Company granted 150,000 options each to Diego
Leiva, Raymond Brennan, Karen Quinn, Robert Sams and Ricardo Maranon, all
exercisable at $0.37 per share, except that Mr. Leiva's exercise price is $0.41
per share (10% over the market value on February 20, 1998).
On February 20, 1998, the Company granted 300,000 options to Marilou
Halvorsen exercisable at $0.37 per share and 50,000 options to Robert Bingham
exercisable at $0.37 per share.
On April 23, 1998, the Company granted 100,000 options to Hans
d'Orville exercisable at $0.99 per share.
-9-
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors of the Company was
established in January 1996. No member of the Compensation Committee was an
officer or employee of the Company during the prior year or was formerly an
officer of the Company. None of the Executive Officers of the Company has served
on the Board of Directors or Compensation Committee during the last fiscal year
of any other entity, any of whose officers served either on the Board of
Directors of the Company or on the Compensation Committee of the Company.
Report of the Compensation Committee of the
Board of Directors on Executive Compensation.
Executive Compensation Policy
It was the responsibility of the Compensation Committee of the Board of
Directors to review the compensation levels and performance of management and to
recommend compensation changes during 1997. The Report of the Compensation
Committee of the Board of Directors concerning executive compensation appears
below:
Philosophy. The Committee believes that maximizing shareholder value is
the most important measure of success, and achieving this depends on the
coordinated efforts of individual employees working as a team toward defined
common performance goals. The objectives of the Company's compensation program
are to align executive compensation with shareholder value, to reward individual
and team effort and performance furthering the Company's business goals and to
attract, retain and reward employees who will contribute to the long-term
success of the Company.
The total direct compensation package for the Company's executives,
including the Chief Executive Officer, is intended to be made up of three
elements: (i) a competitive base salary; (ii) attractive short-term incentives
to executives to earn additional bonus income based on operating results; and
(iii) the grant of stock options, from time to time, to executives in an effort
to provide a closer identification of the executives' interests with those of
the Company and its shareholders by giving the executives an opportunity to
acquire a proprietary interest in the Company by acquiring Common Stock.
Salaries; Chief Executive Officer. The salaries of the Company's
executive officers for 1997 were fixed by the Committee. The Board believes,
however, that the basic philosophy to be followed regarding salaries is to
consider increases based upon a favorable evaluation of individual performance
relative to individual goals, the functioning of the executive's team within the
corporate structure, success in furthering the corporate strategy and goals, and
individual management skills, responsibilities and anticipated workload. The
Board has also considered demonstrated loyalty and commitment to the Company and
the competitive salaries offered by similar companies to attract executives,
including executives of huge technology companies and those in the
telecommunications industry. Merit increases for executives are to be subject to
the same budgetary guidelines as apply
-10-
<PAGE>
to all other employees of the Company. In addition, the Board has made grants of
restricted shares of Common Stock to its Chief Executive Officer, Mr. Leiva,
partly as a means of rewarding him for agreeing to the accrual of a portion of
his salary for 1995 and partly as a short term means of compensating Mr. Leiva
for his services in a manner designed to maximize available cash flow of the
Company.
Bonuses. The Board believes that grants of cash bonus incentives should
be made as a significant percentage of each executive's base salary when the
Company achieves its target goals and when cash flow of the Company is
sufficient to support such grants. This policy is also designed to motivate
individuals to improve performance. No cash bonuses have been awarded to any
executives since January 1, 1995. The Board has authorized, however, grants of
restricted Common Stock and stock options. See "Stock Options" below.
Stock Options. Executives and other employees are eligible for annual
stock option grants under the 1996 Stock Option Plan of the Company. The number
of options granted to any individual depends on individual performance, salary
level and competitive data, and the impact that such employee's productivity may
make to shareholder value over time. In addition, in determining the number of
stock options granted to each executive, the Board considers the unvested
options of each executive to determine the future benefits potentially available
to the executive, each executive's salary in relation to salaries paid in the
industry to persons in positions of equal responsibility, and the extent to
which any executive has waived all or portions of his salary altogether or
waived timely payment, as in the case of Mr. Leiva, the Company's Chief
Executive Officer. The number of options granted to any executive will depend in
part on the total number of unvested options deemed necessary to provide an
incentive to that executive to make a long term commitment to remain with the
Company. By giving to executives an equity interest in the Company, the value of
which depends upon stock performance, the policy seeks to further align
management and shareholder interests.
Respectfully submitted,
The Members of the Compensation Committee:
Marilou C. Halvorsen
Ricardo Maranon
Stock Performance Graph
The following graph compares on a cumulative basis the yearly
percentage change, since the Company's Common Stock commenced public trading on
March 19, 1996 in (a) the total shareholder return on the Company's Common Stock
with (b) the total return on the Standard & Poor's 500 Composite Index ("S&P
500") and (c) the total return on a selected peer group index (the "Peer
Group"). The S&P 500 has been selected as the required broad entity market
index. The Peer Group is an index weighted by the relative market capitalization
of the following five companies which were selected for being in related
industries to the Company's
-11-
<PAGE>
(telecommunications), for having revenues between $12,121,000 and $139,621,000
in their most recently reported fiscal years and for having 5 year compound
annual revenue growth of at least 10%. The five are: Global Telecomm Solutions,
GST Telecomm Inc., IDT Corp., Trescom International Inc. and Viatel Inc.
The following graph assumes that $100 has been invested in each of PICK
Communications Corp., the S&P 500, and the 5-member Peer Group on March 19,
1996.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG PICK COMMUNICATIONS CORP.,
S&P 500 INDEX AND PEER GROUP
Total Return To Shareholders
(Dividends reinvested monthly)
ANNUAL RETURN PERCENTAGE
<TABLE>
<CAPTION>
Company / Index Jun96Sep96 Dec96 Mar97 Jun97 Sep97 Dec97
====================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
PICK -12.50 -74.29 -76.67 52.38 -43.75 50.00 14.81
COMMUNICATIONS
S&P 500 INDEX 3.50 3.09 8.34 2.68 17.46 7.49 2.87
PEER GROUP 13.18 23.01 -30.10 -29.85 24.14 41.21 -2.15
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" THE ELECTION OF ALL OF ITS
NOMINEES AS DIRECTORS OF THE COMPANY - PROPOSAL 1.
Proposal 2 - Ratification of Appointment of Auditors.
On September 17, 1998, the Company terminated the services of Durland &
Company, CPAs, P.A. (the "Former Accountants") as its principal accountants and
engaged Goldstein Golub Kessler LLP, independent public accountants, as its
principal accountants to audit the Company's financial statements for fiscal
1998. The Former Accountants had audited the Company's financial statements
since 1996. The decision to change accountants was approved by the Company's
Board of Directors.
In connection with the audits of the two fiscal years ended December
31, 1996 and December 31, 1997 ("Fiscal 1996 and Fiscal 1997") and during the
subsequent interim period through September 17, 1998, there were no
disagreements with the Former Accountants on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or procedure if
not satisfactorily resolved would have caused the Former Accountants to make
reference to such matter in its report.
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<PAGE>
The Former Accountants' report on the financial statements for Fiscal
1996 and 1997 did not contain an adverse opinion or disclaimer of opinion, nor
was it qualified as to uncertainty, audit scope, or accounting principles. The
Former Accountants' Report for Fiscal 1997 (but not for Fiscal 1996) contained a
modified opinion with an explanatory paragraph stating that the financial
statements have been prepared on a going concern basis. As discussed in Note l4
to the consolidated financial statements, the Company has experienced
significant losses, resulting in a deficit equity position. The Company's
financial position and operating results raise substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note l4. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
Goldstein Golub Kessler LLP has been appointed by the Board of
Directors as the Company's auditors for the current year. Although stockholder
approval is not required, it is the policy of the board of directors to request
stockholder ratification of the appointment or reappointment of auditors.
A representative of Goldstein Golub Kessler LLP will be present at the
Annual Meeting of Stockholders, will have an opportunity to make a statement and
will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE "FOR" RATIFICATION OF THE APPOINTMENT OF
GOLDSTEIN GOLUB KESSLER LLP AS THE
COMPANY'S AUDITORS - PROPOSAL 2.
OTHER MATTERS
The Board of Directors is not aware of any matters to be presented at
the 1997 Meeting except those matters described in this Proxy Statement. Unless
otherwise directed, all shares represented by Proxies will be voted in favor of
Proposals 1 and 2 described in this Proxy Statement and the Notice. If any other
matters come before the 1997 Meeting, the persons named in the accompanying
Proxies will vote on those matters according to their best judgment.
EXPENSES
The entire cost of preparing, assembling, printing and mailing
this Proxy Statement, the enclosed Notice, Proxy and Annual Report, materials,
and the cost of soliciting Proxies with respect to the Annual Meeting, will be
borne by the Company. The Company will request banks and brokers to solicit
their customers who beneficially own shares of Common Stock listed of record in
the names of such banks or brokers as nominees, and will reimburse those banks
and brokers for the reasonable out-of-pocket expenses of such solicitations. The
original solicitation of Proxies will
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<PAGE>
be undertaken by mail, and may be supplemented by officers and other employees
of the Company, using telephone calls and telegrams but no additional
compensation will be paid to them.
STOCKHOLDER PROPOSALS
No person who intends to present a proposal for action at a
forthcoming stockholders' meeting of the Company may seek to have the proposal
included in the proxy statement or form of proxy for such meeting unless that
person (a) is a record beneficial owner of at least 1% or $2,000 in market value
of shares of Common Stock, has held such shares for at least one year at the
time the proposal is submitted, and such person shall continue to own such
shares through the date on which the meeting is held, (b) provides the Company
in writing with his name, address, the number of shares held by him and the
dates upon which he acquired such shares with documentary support for a claim of
ownership, (c) notifies the Company of his intention to appear personally at the
meeting or by a qualified representative under Delaware law to present his
proposal for action, and (d) submits his proposal timely. A proposal to be
included in the proxy statement or proxy for the Company's next Annual Meeting
of Stockholders, will be submitted timely only if the proposal has been received
at the Company's principal executive office no later than August 15, 1999. If
the date of such meeting is changed by more than 30 calendar days from the date
such meeting is scheduled to be held under the Company's By-Laws, or if the
proposal is to be presented at any meeting other than the next Annual Meeting of
Stockholders, the proposal must be received at the Company's principal executive
office a reasonable time before the solicitation of proxies for such meeting is
made.
Even if the foregoing requirements are satisfied, a person may
submit only one proposal of not more than 500 words with a supporting statement
if the latter is required by the proponent for inclusion in the proxy materials,
and under certain circumstances enumerated in the Securities and Exchange
Commission's rules relating to the solicitation of proxies, the Company may be
entitled to omit the proposal and any statement in support thereof from its
proxy statement and form of proxy.
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<PAGE>
AVAILABLE INFORMATION
Copies of the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1997 as filed with the Securities and Exchange
Commission, including the financial statements, can be obtained without charge
by Stockholders (including beneficial owners of the Company's Common Stock) upon
written request to Raymond M. Brennan, the Company's Secretary, Pick
Communications Corp., Wayne Interchange Plaza II, 155 Route 46 West, Wayne, NJ
07470, or on the Commission's web site at http://www.sec.gov.
By Order of the Board of Directors
Raymond M. Brennan,
Secretary
Wayne, New Jersey
September 29, 1998
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