SCHEDULE 14A
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 ss.240.14a-11(c) or ss.240.14a-12
MENTORTECH INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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 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>
MENTORTECH INC.
462 Seventh Avenue
New York, New York 10018
Telephone: (212) 736-5870
May 1, 1998
To Our Stockholders:
On behalf of the Board of Directors, I cordially invite you to attend the
1998 Annual Meeting of the Stockholders of Mentortech Inc. (the "Company"). The
Annual Meeting will be held at 10:00 a.m., on Friday, May 29, 1998, at the
offices of the Company, 462 Seventh Avenue, 4th Floor, New York, New York. We
hope that you will be able to attend the meeting.
The matters expected to be acted upon at the meeting are described in the
attached Notice of Annual Meeting and Proxy Statement. During the meeting,
stockholders who are present at the meeting will have the opportunity to ask
questions.
It is important that your views be represented at the Annual Meeting
whether or not you are able to be present. Please complete, sign and date the
enclosed proxy card and promptly return it to us in the postpaid envelope also
enclosed.
Sincerely,
/s/Roy Machnes
Roy Machnes
Chairman and Chief Executive Officer
<PAGE>
MENTORTECH INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 29, 1998
New York, New York
May 1, 1998
The Annual Meeting of Stockholders of Mentortech Inc., a Delaware
corporation (the "Company"), will be held at the offices of the Company, 462
Seventh Avenue, 4th Floor, New York, New York, on Friday, May 29, 1998 at 10:00
a.m. for the following purposes:
1. To elect six persons to serve as directors of the Company until the
next annual meeting of stockholders and until their successors are
duly elected;
2. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company's 1998 financial statements; and
3. To act upon any such other business as may properly come before the
Annual Meeting and any adjournments or postponements thereof.
Only those holders of record of Common Stock as of the close of business on
April 29, 1998 will be entitled to notice of, and to vote at, the Annual Meeting
and any adjournments or postponements thereof. All stockholders of the Company
are cordially invited to attend the Annual Meeting.
By order of the Board of Directors,
/s/Terry I. Steinberg
Terry I. Steinberg
Secretary
YOUR VOTE IS IMPORTANT WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL
MEETING. PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT
PROMPTLY IN THE ENVELOPE PROVIDED FOR THAT PURPOSE.
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
May 29, 1998
This Proxy Statement is being furnished to the stockholders of Mentortech
Inc., a Delaware corporation (the "Company"), in connection with the 1998 Annual
Meeting of Stockholders (the "Annual Meeting") to be held at 10:00 a.m., on
Friday, May 29, 1998, at the offices of the Company, 462 Seventh Avenue, 4th
Floor, New York, New York, and at any adjournment thereof. The Mentortech Inc.
Board of Directors is soliciting proxies to be voted at the Annual Meeting.
This Proxy Statement and Notice of Annual Meeting, the enclosed proxy card
and the Company's 1997 Annual Report to Stockholders are expected to be sent to
stockholders on or about May 1, 1998.
Proxy Procedure
Only stockholders of record at the close of business on April 29, 1998 (the
"Record Date") are entitled to notice of and to vote in person or by proxy at
the Annual Meeting. The presence at the Annual Meeting, in person or by proxy,
of the holders of Common Stock entitled to vote a majority of the maximum number
of votes which may be cast at the Annual Meeting will constitute a quorum for
the transaction of any business.
When a proxy card is returned properly signed and dated, the shares
represented thereby will be voted in accordance with the instructions marked in
the boxes on the proxy card. Stockholders are urged to mark the boxes on the
enclosed proxy card to indicate how their shares are to be voted. If a
stockholder returns a signed and dated proxy card but does not mark the boxes,
the shares represented by that proxy card will be voted for (i) the election as
directors of the nominees herein and (ii) ratification of the appointment Ernst
& Young LLP as the Company's auditors for 1998. The Board of Directors is
currently unaware of any other matters to be presented for action at the Annual
Meeting, but the proxy card gives the individuals named as proxies discretionary
authority to vote the shares represented thereby on any such other matter that
is properly presented for action at the Annual Meeting. A stockholder may revoke
his or her proxy at any time before it is voted by: (i) giving notice in writing
to the Secretary of the Company; (ii) submitting a proxy card bearing a later
date; or (iii) appearing in person and voting at the Annual Meeting. If a
stockholder attends the Annual Meeting, he or she may vote by ballot.
Cost of Solicitation
The cost of soliciting proxies in the enclosed form will be borne by the
Company. Proxies may be solicited by telephone or other means by directors,
officers or regular employees of the Company, who will not be specially
compensated thereto. The Company will reimburse brokerage houses and other
custodians, nominees and fiduciaries for their expenses in accordance with the
regulations of the Securities and Exchange Commission concerning the forwarding
of proxies and proxy material to the beneficial owners of stock.
Quorum and Voting
The outstanding voting stock of the Company as of the Record Date consisted
of 3,446,166 shares of Common Stock, par value $.01 per share (the "Common
Stock").
The presence at the Annual Meeting, in person or by proxy, of the holders
of Common Stock entitled to cast a majority of the maximum number of votes which
may be cast at the annual Meeting will constitute a quorum for the transaction
of any business.
Directors of the Company will be elected by a plurality of the votes of the
shares of Common Stock present in person or represented by proxy at the Annual
Meeting. Thus, stockholders who do not vote, or who withhold their vote from one
or more nominees named herein and who do not vote for another person, will not
affect the outcome of the election, provided that a quorum is present at the
Annual
<PAGE>
Meeting. Proposal 2 herein requires the affirmative vote of a majority of
the votes represented by all shares of Common Stock present in person or
represented by proxy at the Annual Meeting. Thus, stockholders who are not
present, in person or by proxy, at the Annual Meeting will not affect the
outcome of the votes on this proposal, provided that a quorum is present at the
Annual Meeting; however, a stockholder who is present, in person or by proxy, at
the Annual Meeting, and who does not vote or votes to abstain on Proposal 2 will
in effect be voting against this proposal. Management of the Company has been
advised that Mashov Computers Marketing Ltd. ("Mashov Marketing") presently
intends to vote its 2,214,567 shares of Common Stock for the election of all the
nominees for director and in favor of Proposal 2 herein, thereby assuring the
election of the nominees and the passage of such proposal.
A broker who is the record owner of shares of Common Stock beneficially
owned by a customer will have discretionary authority to vote such shares in the
election for directors and on Proposal 2 herein if the broker has not received
voting instructions from the beneficial owner by the tenth day before the Annual
Meeting, provided that this Proxy Statement has been transmitted to the
beneficial owner at least 15 days before the Annual Meeting.
Principal Stockholders
The following table sets forth certain information as of the Record Date
regarding each person known by the Company to beneficially own, as of the Record
Date, more than five percent of the Company's Common Stock.
<TABLE>
<CAPTION>
Name and Address Nature and Amount of Percent of
of Beneficial Owner Beneficial Ownership(1) Class (1)
- ------------------- ----------------------- ---------
<S> <C> <C>
Mashov Computers Marketing Ltd.
5 HaPlada Street
Or-Yehuda, Israel 60218 (2).................. 2,214,567 shares (3) 61.89%
Elron Electronic Industries Ltd.
Advanced Technology Center
P.O. Box 1573
Haifa, Israel 31015........................... 253,800 shares (4) 7.31%
Special Situations Group
153 East 53rd Street
New York, New York 10022 (5).................. 246,319 shares (6) 7.03%
</TABLE>
(1) Calculated pursuant to Rule 13d-3 promulgated under the Exchange Act.
Accordingly, with respect to each particular beneficial owner, the number
of shares gives effect to the deemed exercise of such owner's options and
warrants (which are currently exercisable or exercisable within 60 days).
Except as otherwise disclosed in the footnotes below, the shares listed in
this column for a person named in this table are directly held by such
person, with sole voting and dispositive power.
(2) Mashov Computers Ltd., which company is located at the same address as
Mashov Marketing, may be deemed the beneficial owner of the shares
registered in the name of Mashov Marketing, which is its 81.4% owned
subsidiary.
(3) Includes 132,045 shares of Common Stock issuable upon exercise of warrants
having an exercise price of $4.40 per share.
(4) Includes 22,500 shares of Common Stock issuable upon exercise of warrants
having an exercise price of $4.40 per share.
(5) Special Situations Fund III, L.P. (56,899 shares held), Special Situations
Private Equity Fund, L.P. (113,636 shares held) and Special Situations
Cayman Fund, L.P. (18,966 shares held) are affiliated entities managed
through investment advisers principally owned by Austin W. Marxe and David
Greenhouse, each of whom, according to a Schedule 13D filed with the
Securities and Exchange Commission on December 10, 1997, possesses sole
voting and dispositive power over the shares beneficially owned by the
Special Situations entities.
(6) Includes 56,818 shares of Common Stock issuable upon exercise of warrants
held by Special Situation Private Equity Fund III, L.P. having an exercise
price of $4.40 per share.
2
<PAGE>
The following table sets forth certain information as of the Record Date
regarding the beneficial ownership of the Company's Common Stock by each
executive officer and director, and by the Company's executive officers and
directors as a group:
<TABLE>
<CAPTION>
Nature and Amount of Percent of
Name Beneficial Ownership(1) Class(1)
- ----- ----------------------- --------
<S> <C> <C>
David Assia (2)(3)(4)................................... -- *
Jack Dunietz (2)(3)(4).................................. -- *
Martin Kahn (3)(5)..................................... 2,500 *
Roy Machnes (2)(3)(4)................................... 14,116 (6) *
Elan Penn (2)(3)(4)..................................... 8,333 (7) *
Terry Steinberg (2)(3).................................. 48,807 (8) 1.4%
All Executive Officers and Directors as a
group (6 persons)....................................... 67,557 (9) 2.0%
</TABLE>
- -------------------
(1) Calculated pursuant to Rule 13d-3 promulgated under the Exchange Act.
Accordingly, with respect to each particular beneficial owner, the number
of shares gives effect to the deemed exercise of such owner's options and
warrants (which are currently exercisable or exercisable within 60 days).
Except as otherwise disclosed in the footnotes below, the shares listed in
this column for a person named in this table are directly held by such
person, with sole voting and dispositive power.
(2) Address is c/o Mentortech Inc., 462 Seventh Avenue, New York, New York
10018.
(3) Serves as a director of Mentortech Inc.
(4) Messrs. Assia, Dunietz and Penn are directors, Mr. Machnes is the Chairman
of the Board and Mr. Penn is the Chief Executive Officer of Mashov
Marketing.
(5) Address is c/o Cadence Information Associates LLC, 767 Fifth Avenue, New
York, New York.
(6) Includes 13,542 shares issuable upon exercise of currently exercisable
options.
(7) Shares issuable upon exercise of currently exercisable options.
(8) Includes 10,000 shares issuable upon exercise of currently exercisable
options.
(9) Includes 31,875 shares issuable upon exercise of currently exercisable
options.
* Less than 1%.
PROPOSAL 1
ELECTION OF DIRECTORS
Six directors are to be elected at the Annual Meeting to serve until the
next Annual Meeting and the due election and qualification of their successors.
The proxies will be voted, unless otherwise specified therein, in favor of the
election as directors of David Assia, Jack Dunietz, Martin F. Kahn, Roy Machnes,
Elan Penn and Terry I. Steinberg.
Each of them is currently a director, with a term expiring as of the date
of this Annual Meeting. Should any of these nominees not be available for
election, all properly executed and returned proxies will be voted for a
substitute nominee designated by the Board of Directors. It is not expected that
any of the nominees will be unavailable. Proxies cannot be voted for more than
six persons.
The Board recommends a vote FOR the election of the six director nominees
herein.
David Assia. Mr. Assia has served as a director of the Company since
February 1997. He is a co-founder with Mr. Dunietz of Mashov Computers Ltd. and
has been its Chairman since 1989. Mr. Assia has been Managing Director of Magic
Software Enterprises Ltd. ("Magic"), a developer and provider of network
software products and services for departmental, client/server and
Internet/Intranet applications, from its inception in 1983 until September 1997,
and has been Chairman of Magic since 1986. He also serves as a director of
Mashov Marketing and Aladdin Knowledge Systems Ltd. Mr. Assia holds a B.A. and
an M.B.A. from the Tel-Aviv University.
Jack Dunietz. Mr. Dunietz has served as a director of the Company since
February 1997. He is a co-founder with Mr. Assia of Mashov Computers Ltd. of
which he has been the Chief Executive Officer
3
<PAGE>
since 1987. Mr. Dunietz also serves as a director and interim Chief Executive
Officer of Magic and a director of Mashov Marketing, Paradigm Geophysical Ltd.
and Data Automation Ltd. Mr. Dunietz holds a B.SC. in Computer Science from the
Technion Israel Institute of Technology.
Martin F. Kahn. Mr. Kahn has served as a director of the Company since May
1995 and was Chairman of the Board of the Company from May 1995 until February
1997. He has served since 1989 as Chairman of Ovid Technologies, Inc., a leading
producer of medical, scientific and technical CD-ROM and network products; since
September 1993 as Chairman of OneSource Information Services, which develops and
markets a comprehensive set of integrated business information and software
products; since 1991 as a Director of Vista Information Solutions, Inc.
(formerly DataMap, Inc., a successor through merger to Vista Environmental
Information, Inc.) which supplies site-specific risk information about real
estate for the insurance, banking, and environmental engineering markets; since
April 1995 as Chairman and CEO of Shoppers Express, Inc., which offers home
grocery shopping through dial-up and on-line services; and since March 1996 as
Managing Director of Cadence Information Associates L.L.C. (and its
predecessor), a consulting and management services firm. Mr. Kahn holds a
Bachelors Degree in Administrative Sciences from Yale College and an M.B.A. from
Harvard Business School.
Roy Machnes. Mr. Machnes has served as the Company's Chairman of the Board,
President and Chief Executive Officer and a director since February 1997. Since
January 1994, he has been Chairman of the Board of Mashov Marketing, and prior
thereto, from 1988, he served as Vice President Sales of Mashov Computers Ltd.
Mr. Machnes is also a director of Mashov Computers Ltd. He holds a B.A. from the
University of California at Berkeley.
Elan Penn. Mr. Penn has served as the Company's Chief Financial Officer and
a director since February 1997. He also serves as the Chief Executive Officer of
Mashov Marketing and Chief Financial Officer of Mashov Computers Ltd. Mr. Penn
joined Mashov Computers Ltd. and Magic as their Vice President of Finance and
Administration in June 1992. In February 1997, he resigned his position at Magic
to assume the position of Chief Financial Officer of the Company. From January
1991 until May 1992, Mr. Penn was employed by Solgood Representatives Ltd., an
electronics equipment sales representative firm, where he acted in an executive
capacity. Prior to January 1991, he was Vice President of Finance of Mashov
Computers. Mr. Penn holds a B.A. in Economics from the Hebrew University of
Jerusalem and a Ph.D. in Management Science from the University of London.
Terry I. Steinberg. Mr. Steinberg has served as the Company's Executive
Vice President, responsible for North American Sales and Marketing since
February 1997, and as a director of the Company and its predecessor, PC
Etcetera, Inc. ("PCE U.S."), since 1985. He served as President and Chief
Executive Officer of PCE U.S. from its inception in 1985 until February 1997 and
has served as Treasurer from August 1991. He currently serves as Secretary. For
more than five years prior to PCE U.S.'s inception, he was the Director of
Decision Support for Paramount Pictures Corporation, with responsibility for all
end-user computing. Mr. Steinberg holds a Bachelor's Degree in Applied
Mathematics and Computer Science and an M.B.A., both from McGill University.
Messrs. Machnes, Penn, Assia, and Dunietz own 1.51%, 0.4%, 0.56% and 3.15%
of the voting equity of Mashov Marketing, respectively. Mashov Marketing is an
81.4%-owned subsidiary of Mashov Computers Ltd., a publicly-held company in
Israel.
Board of Directors
The business and affairs of the Company are managed under the direction of
the Board of Directors, composed currently of three non-employee directors and
three employee directors. The Board of Directors establishes the overall
policies and standards for the Company and reviews the performance of
management.
In 1997, the Board of Directors held 3 meetings, all of which were held by
conference telephone. Each director was present for all of the meetings of the
Board.
The Board of Directors currently has no standing audit, nominating or
compensation committee.
4
<PAGE>
Directors' Compensation
Directors, whether or not they are also employees of the Company, are not
paid any fees or other remuneration for service on the Board. The Company
reimburses all of its directors for their out-of-pocket expenses incurred in the
performance of their duties as directors of the Company.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 and the rules
thereunder require the Company's directors and executive officers, and persons
who beneficially own more than 10% of the Common Stock, to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of any equity securities of the Company. To the Company's
knowledge, based solely on review of the copies of such reports furnished to it
and representations that no other reports were required, all persons subject to
these reporting requirements filed the required reports on a timely basis during
1997.
Executive Compensation
The following table sets forth information concerning the compensation
during the last three fiscal years of the Company's executive officers whose
total salary during any of the three prior fiscal years was $100,000 or more.
The Company has a 401(k) savings plan for its executives which is available to
all Company employees. The current value of all perquisites and other personal
benefits furnished in each of such years to each of the executive officers named
below was less than 10% of such officer's salary for such year.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
Annual Compensation Securities Underlying
Name and Principal Position Year Salary ($) Options (#)
- --------------------------- ---- ---------- -----------
<S> <C> <C> <C>
Roy Machnes
President and Chief Executive
Officer................................... 1997 $163,789 40,625
Elan Penn
Chief Financial Officer................... 1997 120,000 25,000
Terry Steinberg
Executive Vice President (1).............. 1997 168,500 30,000
1996 (2) --
1995 131,700 --
</TABLE>
- --------------
(1) Effective February 13, 1997, Mr. Steinberg, the former President of the
Company, was named Executive Vice President pursuant to an employment
contract dated February 6, 1997.
(2) Less than $100,000.
The aggregate value of all other perquisites and other personal benefits
furnished in each of the last three years to each of these executive officers
was less than 10% of each officer's salary for such year. The Company has not
paid any cash remuneration to any of its outside directors as directors in the
last three years.
Employment Agreements
Effective February 13, 1997, the Company entered into employment contracts
with each of Roy Machnes, Terry I. Steinberg and Elan Penn, providing for their
employment as Chief Executive Officer, Executive Vice President and Chief
Financial Officer, respectively, of the Company. Pursuant to such contracts, and
effective as of August 4, 1997, Messrs. Machnes, Steinberg and Penn were granted
incentive stock options to purchase 40,625, 30,000 and 25,000 shares of Common
Stock, respectively, which options vest over a three-year period commencing in
August 1997. The exercise price of such stock options is $4.672 per share.
5
<PAGE>
The base salaries of Messrs. Machnes and Steinberg are each $155,000. Mr.
Penn's salary is paid at a rate of $10,000 per month, adjusted monthly in a
percentage amount equal to the increase in the Consumer Price Index as published
by the Israeli Bureau of Labor Statistics.
Mr. Machnes's employment agreement provides that, although he may perform
the services contemplated by such agreement in the U.S. or Israel, the Company
will pay for or reimburse certain of Mr. Machnes's relocation and living
expenses should Mr. Machnes choose to live in the U.S. during the period of his
employment. Specifically, the Company must pay (or reimburse Mr. Machnes) if he
incurs such expenses for the following: (1) $20,000 for expenses incurred during
any relocation of Mr. Machnes, his family and their possessions to New York; (2)
all expenses associated with the education of Mr. Machnes's children including
private school tuition and associated expenses (estimated at $20,000 per annum)
in the United States; (3) an apartment in Manhattan, New York, including any
associated real estate broker's fees, less the amount of any rental payments
received from the lease of Mr. Machnes's home in Israel, net of associated
expenses; and (4) any expenses incurred by Mr. Machnes in connection with a
visit by his family to Israel once each year. If any of the above constitute
taxable income to Mr. Machnes, such amounts are to be grossed up to account for
the payment of any taxes due, and are to be adjusted upwards annually in a
percentage amount equal to the Consumer Price Index for all urban consumers in
the New York, New Jersey and Connecticut area as published by the Bureau of
Labor Statistics. Should Mr. Machnes' employment be terminated for any reason,
Mr. Machnes is to be reimbursed for relocation expenses of no more than $20,000
in connection with Mr. Machnes's relocation to Israel.
During the year ended December 31, 1997, the Company paid approximately
$19,000 for Mr. Machnes's relocation expenses to New York and pre-paid
approximately $15,000 for tuition for Mr. Machnes' children. The Company also
pre-paid approximately $76,000 for the rental of an apartment in New York which
it leased for the use of its executives. The apartment is being used by Mr.
Machnes at the present time. No expenses have been incurred by the Company for
any visits by Mr. Machnes (or his family) to Israel. Any amounts that are
taxable to Mr. Machnes will be grossed up to compensate Mr. Machnes for any
taxes due.
Stock Options
The following table provides information concerning the grants and
exercising of stock options during the Company's last fiscal year to each of the
officers named above in the Summary Compensation Table.
<TABLE>
<CAPTION>
OPTIONS GRANTED IN LAST FISCAL YEAR
Number of Percent of
Shares Total Options
Underlying Granted to
Options Employees in
Name Granted (#) Fiscal Year Exercise Price ($/SH) Expiration Date
- ---- ----------- ----------- --------------------- ---------------
<S> <C> <C> <C> <C>
Roy Machnes
President and Chief
Executive Officer........... 40,625(1) 42.5% $4.672 (2)
Elan Penn
Chief Financial Officer...... 25,000(1) 26.1 $4.672 (2)
Terry Steinberg
Executive Vice President (3). 31,000(1) 31.4 $4.672 (2)
</TABLE>
- ----------------------
(1) One third of the shares subject to this option becomes exercisable on each
of August 1, 1997, August 1, 1998 and August 1, 1999.
(2) The expiration date for these options is five years from the date such
options vest, i.e the option for one third of the shares expires on each of
August 1, 2002, August 1, 2003 and August 1, 2004.
(3) Effective February 13, 1997, Mr. Steinberg, the former President of the
Company, was named Executive Vice President pursuant to an employment
contract dated February 6, 1997.
6
<PAGE>
The following table provides information concerning exercises of stock
options during 1997 by each of the executive officers named above in the Summary
Compensation Table, and the number and value of unexercised options held by each
of them at December 31, 1997.
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last
Fiscal Year and Fiscal Year-End Option Values
Number of shares Value of unexercised in-
Shares underlying unexercised the-money options at FY-
acquired on options at FY-end (#) end ($)(1) exercisable/
Name exercise (#) exercisable/ unexercisable unexercisable
- ---- ------------ -------------------------- -------------
<S> <C> <C> <C>
Roy Machnes..................... -- 13,542/27,083 --
Elan Penn....................... -- 8,333/16,667 --
Terry I. Steinberg.............. -- 10,000/20,000 --
</TABLE>
- ---------------
(1) None of the outstanding options were in the money at December 31, 1997. The
exercise price of the outstanding options was $4.67 while the average of
the bid and the asked prices of a share of Common Stock on December 31,
1997 was $4.56.
PROPOSAL 2
RATIFICATION OF AUDITORS
The following resolution will be offered by the Board of Directors at the
Annual Meeting:
RESOLVED: That the appointment of Ernst & Young LLP by the Board of
Directors of the Company to conduct the annual audit of the financial
statements of Mentortech Inc. for the year ending December 31, 1998 is
hereby ratified, confirmed and approved.
The Board of Directors of the Company first appointed Ernst & Young LLP
("Ernst & Young"), independent public accountants, as its auditors in February
1997. The Israeli affiliate of Ernst & Young has been and remains the auditors
of Mashov Computer Marketing Ltd., Mashov Computers Ltd., Magic Software
Enterprises Ltd., Mentortech TBT Ltd. and Mentortech Systems Ltd. As a result of
Ernst & Young's knowledge of the Company's operations, and reputation in the
auditing field, the Board of Directors is convinced that Ernst &Young has the
necessary personnel, professional qualifications and independence to act as the
Company's auditors.
In the event this resolution does not receive the necessary vote for
adoption, or if for any reason Ernst & Young ceases to act as auditors for the
Company, the Board of Directors of the Company will appoint other independent
public accountants as auditors.
Representatives of Ernst & Young will attend the Annual Meeting. They will
have the opportunity to make a statement and will be available to respond to
appropriate questions from stockholders at the meeting.
The Board of Directors recommends a vote FOR the ratification of the
appointment of Ernst & Young LLP as the auditors of the Company's financial
statements for fiscal 1998.
OTHER MATTERS
The Board of Directors does not intend to bring any matters before the
Annual Meeting other than those specifically set forth in the Notice of the
Annual Meeting and knows of no matters to be brought before the Annual Meeting
by others. If any other matters properly come before the Annual Meeting, it is
the intention of the persons named in the accompanying proxy to vote such proxy
in accordance with the judgment of the Board of Directors.
Financial statements for the Company are included in its Annual Report to
Stockholders for the year 1997, which was mailed to the stockholders beginning
May 1, 1998.
7
<PAGE>
A COPY OF THE COMPANY'S 1997 ANNUAL REPORT ON FORM 10-KSB FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS AVAILABLE WITHOUT CHARGE TO THOSE
STOCKHOLDERS WHO WOULD LIKE MORE DETAILED INFORMATION CONCERNING THE COMPANY. TO
OBTAIN A COPY, PLEASE WRITE TO: TERRY I. STEINBERG, SECRETARY, MENTORTECH INC.
462 SEVENTH AVENUE, NEW YORK, NEW YORK 10018.
By Order of the Board of Directors,
/s/Terry I. Steinberg
Terry I. Steinberg
Secretary
Dated: May 1, 1998
8
<PAGE>
APPENDIX A
MENTORTECH INC.
462 Seventh Avenue
New York, New York 10018
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) Roy Machnes and Terry I. Steinberg, or
either of them, attorneys or attorney of the undersigned, for and in the name(s)
of the undersigned, with power of substitution and revocation in each to vote
any and all shares of Common Stock, par value, $.01 per share, of Mentortech
Inc. (the "Company"), which the undersigned would be entitled to vote as fully
as the undersigned could if personally present at the Annual Meeting of
Stockholders of the Company to be held on May 29, 1998 at 10:00 a.m. at the
Company's principal offices at 462 Seventh Avenue, 4th Floor, New York, New York
and at any adjournment or adjournments thereof, and hereby revoking any prior
proxies to vote said shares, upon the following items of business more fully
described in the notice of and proxy statement for such Annual Meeting (receipt
of which is hereby acknowledged):
(1) The election of six Directors.
[ ] FOR all the nominees listed below (except as marked to contrary
below)
[ ] WITHHOLD AUTHORITY to vote for all the nominees below
DAVID ASSIA JACK DUNIETZ MARTIN F. KAHN ROY MACHNES
ELAN PENN TERRY I. STEINBERG
INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name above.
(2) To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company's 1998 financial statements.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(PLEASE SIGN ON REVERSE SIDE)
<PAGE>
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE. IN THE ABSENCE OF
SUCH SPECIFICATION, THE SHARES REPRESENTED BY THIS PROXY CARD WILL BE VOTED FOR
(i)THE ELECTION OF THE SIX NOMINEES NAMED IN ITEM 1 AND (ii)THE RATIFICATION OF
THE APPOINTMENT OF ERNST & YOUNG AS THE COMPANY'S INDEPENDENT AUDITORS FOR 1998.
Dated____________________________________1998
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Signature(s)
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Signatures, if held jointly
(Please sign exactly as name(s) appear(s)
hereon. When signing as attorney, executor,
administrator, trustee, guardian, or as an
officer signing for a corporation, please
give full title under signature.)
STOCKHOLDERS ARE URGED TO MARK,
DATE, SIGN AND RETURN THIS PROXY
PROMPTLY IN THE ENVELOPE PROVIDED,
WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
