SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or Rule 14a-12
PIONEER COMMERCIAL FUNDING CORP.
(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 the 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>
PIONEER COMMERCIAL FUNDING CORP.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON May 23, 2000
To the stockholders of Pioneer Commercial Funding Corp.:
Notice is hereby given that the Annual Meeting of Stockholders ("Annual
Meeting") of Pioneer Commercial Funding Corp., a New York corporation
("Company"), will be held at One Rockefeller Plaza, Suite 2412, New York, N.Y.
10020 on May 23, 2000, at the hour of 11 AM local time for the following
purposes:
(1) To elect six directors for a one year term expiring in 2000;
(2) To ratify the appointment of Lazar Levine & Felix LLP as the Company's
auditors for the year ended December 31, 2000; and
(3) To transact such other business as may properly come before the Meeting.
Only stockholders of record at the close of business on April 24, 2000
are entitled to notice of and to vote at the meeting or any continuation or
adjournment thereof
By Order of the Board of Directors
David W. Sass, Secretary
April 24, 2000
IF YOU WISH TO VOTE IN FAVOR OF EACH OF THE PROPOSALS AND FOR THE
NOMINEES PRESENTED, CHECK THE APPROPRIATE BOX AND SIGN, DATE AND RETURN
THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE
IF MAILED IN THE UNITED STATES. IN ANY EVENT, YOUR PROMPT RETURN OF A
SIGNED AND DATED PROXY WILL BE APPRECIATED.
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PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
OF
PIONEER COMMERCIAL FUNDING CORP.
One Rockefeller Plaza
Suite 2412
New York, N. Y. 10021
To Be Held May 23, 2000
The enclosed proxy materials are furnished in connection with the
solicitation of proxies by the Board of Directors of Pioneer Commercial Funding
Corp., a New York corporation (the "Company"), for use at the Annual Meeting of
shareholders of the Company to be held at 11:00 A.M., Eastern Daylight Time, on
May 23, 2000, at One Rockefeller Plaza, Suite 2412, New York, New York 10020,
and any adjournment or adjournments hereof (the "Meeting").
This proxy statement and the enclosed form of proxy are first being
mailed to the shareholders of the Company on or about April 26, 2000.The Board
Of Directors has established April 24, 2000 as the record date for shareholders
entitled to notice of, and to vote at the meeting.
The present officers and directors of the Company and affiliates,
holding approximately 53.8% of the outstanding Common stock of the Company,
intend to vote in FOR Proposals 1 and 2.
Matters to Be Acted Upon
It is proposed at the Meeting to adopt resolutions approving the
following proposals (the "Proposals"):
1. To elect six directors.
2. To ratify the appointment of Lazar Levine & Felix LLP as independent auditors
for the fiscal period ending on December 31, 2000.
3. To transact such other business as may properly come before the meeting.
The Board of Directors recommends a vote FOR Proposals One and Two.
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Right of Revocation
A proxy may be revoked by notice in writing to the Secretary of the
Company at any time prior to the exercise thereof. Each valid proxy received in
time will be voted at the Meeting and, if a choice is specified on the proxy, it
will be voted in accordance with such specifications. If no such specification
is made, the persons named in the accompanying proxy have advised the Company of
their intention to vote the shares represented by the proxies received by them
in favor of the Proposals and the election of all the nominees named below as
Directors.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Six persons have been nominated to serve on the Board of Directors,
each to hold office until the next annual meeting of shareholders and until his
or her successor has been elected and qualified or until his or her prior
resignation or removal. All nominees are now Directors of the Company.
Boaz Harel (36) was appointed to the Board in November 1996 and elected as
Chairman of the Board on July 2, 1997. From 1991 to 1993, Mr. Harel was the
founder and managing director of Mashik Business and Development Ltd., an
engineering consulting company. From 1993 to 1997, Mr. Harel has been the
Managing Director of Leedan Business Enterprise Ltd. ("Leedan"), a publicly-held
Israeli company which is the beneficial owner of 58% of the Company's Common
Stock. Since January 1994, Mr. Harel has served as a member of the Supervisory
Board of ICTS International N.V. and since September 1996, Mr. Harel has served
as the Chairman of ICTS USA (1994), Inc., an indirect subsidiary of Leedan.
Since 1997 Mr. Harel has been Co-Managing Director of Leedan International
Holdings B.V., a principal shareholder of the Company and an indirect
wholly-owned subsidiary of Leedan.
M. Albert Nissim (66) was appointed as the President of the Company in January
1997 and was elected to the Board on September 25, 1997. He has served as
Secretary of ICTS International N.V. since January 1996. Mr. Nissim has also
served as President of ICTS USA (1994), Inc. since January 1994. From 1994 to
1995, he served as Managing Director of ICTS International B.V. Mr. Nissim
served as the President of Harel & Partners from 1991 to 1994. From 1990 to the
present, he has been the Vice President and a director of Tuffy Associates
Corp., an automotive repair franchise company affiliated with Mr. Ezra Harel,
the brother of Boaz Harel. Mr. Nissim is also a Co-Managing Director of Leedan
International Holdings B.V., a principal shareholder of the Company. In April
1997, Mr. Nissim was appointed as one of the Company's designees on the Board of
Directors of Pioneer Home Funding, L.L.C., a subsidiary of the Company.
Richard Fried (53) was appointed to the Predecessor's Board in February 1994 and
served as Vice-President of the Predecessor. Upon consummation of the Merger in
November 1994, he became a director of the Company. Since June 1991 Mr. Fried
has served as President
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of Medical Systems, Inc., an application software development company, of which
he has been a principal shareholder. From February 1993, he has served as
President of Montgomery Associates, Inc., a corporation wholly-owned by him,
which is engaged in business as an importer-exporter. Since April 1993, Mr.
Fried has been a principal shareholder, and has served as President, of Sea
Change Systems, Inc., a software tools development company. From April 1993 to
May 1994, he was a Branch Manager of LPL Financial Services, a stock brokerage
firm, which is an NASD member firm. Since November 1994, Mr. Fried has been a
controlling shareholder and has served as President of SMARTpay, Inc., a
collection service. From April 1995 he has served as President of Centennial
Systems, Inc., a software distribution, sales and service firm of which he is a
principal shareholder. Since October 1996, Mr. Fried has been a controlling
shareholder, and has served as President, of Leeward Software, Inc., an
application software developer. From October 1996 he has also served as
President of Windward Software, Inc., a materials management software
intellectual property company of which he is also a principal shareholder. From
December 1996 he has served as President of Strategic Reporting Systems, Inc., a
database report generation software development and distribution firm of which
he is a principal shareholder. From April 1997, he has served as managing
director of HYCOM USA, Inc., an international software development and
distribution company, of which he is a principal shareholder.
Tamar Lieber (57) was appointed to the Board in June 1995. Ms.
Lieber has been engaged in practice as a senior psychotherapist at the Center
for Preventive Psychiatry in White Plains, New York, a non-for profit community
mental health clinic, for more than the past five years.
Lynda Davey (45) was elected to the Board on September 25, 1997. Ms. Davey has
served as the President of Avalon Group, Ltd. And Chairman of Avalon Securities,
Ltd., private investment banking firms, since April, 1992. From April, 1988
throughout 1991 Ms. Davey was Managing Director and head of investment banking
at Tribeca Corporation, a New York merchant bank. Prior to 1988, Ms. Davey was
Vice-President of the Merchandise and Retail Group in the corporate finance
department of Salomon Brothers Inc. Ms. Davey also serves as a director of Tuffy
Associates Corp. And the Center for Design Innovation of the Fashion Institute
of Technology. Ms. Davey is a registered architect.
Joseph Samuels (69) has served as a president and is the sole shareholder of
Fulton Properties of Calif. Inc., an investment corporation engaged in
acquisition, development and management of real estate for more than the past
five years. Mr. Samuels has also served as President and is the sole shareholder
of Goldsboro Properties Inc., a real estate holding corporation, for more than
the past five years.
The affirmative vote of the holders of at least a majority of the
shares present personally or by proxy at the Meeting is required for the
election of each director.
The Board of Directors recommends a vote FOR the election of each of
the seven nominees as directors.
PROXIES IN THE ACCOMPANYING FORM WHICH DO NOT WITHHOLD AUTHORITY TO VOTE FOR
DIRECTORS WILL BE VOTED FOR THE ELECTION OF THE PERSONS WHOSE NAMES ARE LISTED
ABOVE.
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Voting Securities and Principal Holders Thereof
The outstanding voting securities of the Company on April 24, 2000 (the
"Record Date") consisted of 2,771,136 shares of common stock, par value $.0l per
share (the "Common Stock"). The Common Stock is the only class of voting stock
of the Company. Only shareholders of record at the close of business on the
Record Date are entitled to notice of or to vote at the Meeting. Each share of
Common Stock is entitled to one vote with respect to each proposal. The holders
of a majority of the outstanding shares entitled to vote must be present at the
Meeting in person or by proxy to constitute a quorum.
The following table sets forth the holdings of the Common Stock as of
April 24, 2000 by each person or entity known to the Company to be the
beneficial owner of more than five percent (5%) of the outstanding shares of
Common Stock and by (1) each director and named executive officer; and (2) all
directors and executive officers as a group.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Number of Shares Percent
Name Title of Common Stock of Class
ICTS International N.V. 150,000 5.4%
Vertrekpassage 226
1118 AV Schiphol Airport
Holland
Lancer Partners L.P. 172,500 6.2%
200 Park Avenue, Ste 3900
New York, NY 10166
Leedan Business
Enterprise Ltd. 1,188,068(1) 42.9%
("Leedan Business")
8 Shaul Hamelech Blvd.
Tel-Aviv 64733, Israel
Rogosin International B.V. 265,000(3) 9.5%
One Rockefeller Plaza,
Ste. 2412
New York, NY 10020
Boaz Harel Director 1,188,068(1)(2) 42.9%
1 Rockfeller Plaza
Suite 2412
New York, New York
10020
M. Albert Nissim President and 70,000(4) *
One Rockefeller Plaza Director
Suite 2412
New York, NY
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Number of Shares Percent
Name Title of Common Stock of Class
Tamar Lieber Director 169,500(5) 5.8%
160 W. 66th Street
Apt. 49B
New York, NY 10023
Richard Fried Director 25,523(5) *
33 Marian Road
Marblehead, MA 01945
Lynda Davey Director 12,000(5) *
1375 Broadway
5th Floor
New York, NY 10018
Joseph Samuels Director 12,000(5) *
321 24th Street
Santa Monica, CA 90402
Directors and
Executive
Officers as a
group (6 persons) 1,492,091(6) 53.8%
</TABLE>
* Less than 1%
(1) Leedan International Holdings B.V., which together with Leedan Systems &
Properties Promotion (1003) Ltd. Holds 48.2% of the issued and outstanding
Common Stock of the Company, is an indirect wholly-owned subsidiary of Leedan
Business. Certain members of the family of Mr. Boaz Harel, a director of the
Company, collectively, own approximately 57.5% of the outstanding shares of
Leedan Business. Mr. Harel, owns approximately 17% of the outstanding shares of
Leedan Business and disclaims beneficial ownership of any stock of Leedan
Business held by an other member of the Harel family.
(2) Does not include three year option for 50,000, vesting 1/3rd each year,
exercisable at $4.75 per share nor a three year option for 7,500 shares
exercisable at $2.25 per share, vesting 1/3rd each year.
(3) An affiliate to Leedan Business Enterprises Ltd. Shares were purchased in a
private transaction.
(4) Includes 45,000 shares of Common Stock exercisable at $4.50 per share which
Mr. Nissim has the right to acquire within 60 days from the date hereof upon
exercise of an option held by him and 25,000 option exercisable at $10.00 per
share at the rate of 1/3rd per year for three years.
(5) Includes 12,000 shares as part of a 3 year option, exercisable at $4.25 per
share, vesting at the rate of 1/3rd per year for three years as well as 7,500
shares as part of a three year option exercisable at $2.25 per share, vesting at
the rate of 1/3rd per year.
(6) Does not include any options referred to in notes (2), (3), (4) and (5)
hereof.
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Certain Relationships and Related Transactions
o Certain Transactions.
On November 18, 1998 a settlement was reached with a guarantor
of a mortgage banking customer's defaulted line of credit. The guarantor was
also a company stockholder. Pursuant to the settlement, an entity which is an
affiliate of Leedan accepted $530,000 of the guarantor's recognized debt to the
Company in exchange for the guarantor's shares in the Company. This entity paid
the Company $176,667 and issued two installment notes of $176,667 each with
maturity dates of August 23, 1999 and May 23, 2000, respectively. These notes
bear interest at a rate of 8.25% per annum and are payable quarterly commencing
three months from the date of issuance which was November 23, 1998.
On November 18, 1998, a settlement was reached with a
guarantor of a mortgage banking customer's defaulted line of credit. The
guarantor was also a Company stockholder. Pursuant to the settlement, Rogosin
Business Enterprises Ltd., accepted $530,000 of the guarantor's recognized debt
to the Company in trade for the guarantor's shares in the Company. Furthermore,
pursuant to the settlement, the guarantor issued two additional notes in the
amount of $735,102 to the Company.
Pursuant to the settlement as stated above, the guarantor
issued to the Company two installment notes in the amounts of $265,103 and
$470,000, respectively. These notes bear interest at a rate of 8.25% per annum
and are payable quarterly commencing three months from November 18, 1998, the
date of issuance of the notes. Both notes mature November 18, 2000.
On September 14, 1998 Joseph Samuels, a Director of the
Company and two affiliates of Leedan Business Enterprises Ltd. loaned to the
Company $100,000 and $550,000 and $76,000, respectively. The loan was in
connection to the Ninth Amendment to the Credit Agreement with Bank One to
authorize the infusion of an aggregate of $726,000 in the form of the Company's
11% Subordinated Debenture for a term until a new lending facility is in place
to replace Bank One.
On April 2, 1997 and April 4, 1997, the Company issued
unsecured loans of $400,000 and $600,000, respectively, to Rogosin Converters,
Inc., an affiliate of the Company. Members of the family of Mr. Boaz Harel, a
director of the Company, have an indirect controlling interest in Rogosin
Converters, Inc. The loans were guaranteed by Leedan International B.V., a
shareholder of the Company. The Company earned interest of 12% per annum on the
loans, which interest was paid monthly. The principal and accrued interest on
the loans were paid in full on June 20, 1997.
o Board Meetings
The Board of Directors met two times during the fiscal year ended
December 31, 1999.
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<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Compensation of Directors and Executive Officers
Annual Compensation Awards
Name and
Principal Position Fiscal Year Salary($) Bonus($) Other Annual Securities
- ------------------- ----------- --------- -------- Compensation ($) Underlying
---------------- Option
Boaz Harel* 1999 $100,000
Chairman of 1998(1) $100,000 $15,000 50,000
the Board 1997(2) $25,000 7,500
M. Albert Nissim** 1999 $118,385
President 1998(1) $118,654 $12,000 25,000
1997(2) $54,000 45,000
John O'Brien*** 1999 $122,083
Chief Financial 1998(1) $58,513
Officer
David W. Sass**** 1999 $0
Secretary 1998 $0
</TABLE>
* Commenced as Chairman on July 2, 1997.
** Commenced service as President of the Company in the fourth quarter of the
1996 fiscal year. *** Commenced service as Chief Financial Officer in the second
quarter of the 1998 fiscal year and terminated employment in September, 1999.
**** Commenced service as Secretary in the second quarter of the 1998 fiscal
year.
(1) For the Year Ending December 31, 1998
(2) Nine Months ended December 31, 1997
Compensation of Directors.
The Directors of the Company received cash compensation of $300 per
meeting in his or her capacity as a director.
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Options Issued to Executives.
The table below sets forth information regarding option
grants to executive officers and Directors of the Company.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Number of Exercise Price
Name Options Granted Per Share Expiration Date
M. Albert Nissim(1) 25,000 $10.00 October, 2002
45,000 $ 4.50 February,2002
Boaz Harel(1) 50,000 $4.750 October, 2002
7,500 $2.250 January, 2002
Richard Fried(1) 12,000 $4.250 October, 2002
7,500 $2.250 January, 2002
Tamar Lieber(1) 12,000 $4.250 October, 2002
7,500 $2.250 January, 2002
Lynda Davey(1) 12,000 $4.250 October, 2002
Joseph Samuels(1) 12,000 $4.250 October, 2002
</TABLE>
(1) Options vested at the rate of 1/3rd each year.
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Executive Compensation.
In July 1997, the Company extended the Employment Agreement
with M. Albert Nissim as President for an indefinite period, on a part-time
basis, at a salary of $6,000 (amended to $9,500) per month. The Agreement may be
terminated by either party on not less than 90 days prior notice. On May 12,
1998, Albert Nissim's compensation was increased to $9,500 per month effective
April 1, 1998 in consideration of his contributions to the Company. In addition,
Mr. Nissim was awarded a $12,000 bonus payable in the second quarter in
consideration of the Company's performance.
The Company has approved a compensation plan for Mr. Boaz
Harel and/or Leedan Business Enterprises, Ltd. ("Leedan"), the company which
provides management services to the Company by making Mr. Harel available to the
Company. Leedan is also a principal shareholder of the Company. The plan
provides aggregate remuneration to Mr. Harel and/or Leedan of $100,000 per annum
plus 5% of the Company's net income pre-tax above $1,000,000 annually. Leedan
and Mr. Harel will determine how such compensation will be divided between them.
On May 12, 1998 Boaz Harel was awarded a $15,000 bonus, payable in the second
quarter in consideration of the Company's performance.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Company has again appointed Lazar Levine & Felix LLP to serve as
independent accountants of the Company for the fiscal period ending December 31,
2000. Although this appointment is not required to be submitted to a vote of the
Shareholders, the Board believes it appropriate as a matter of policy to request
that the Shareholders ratify such appointment of Lazar Levine & Felix LLP. If
the Shareholders should not ratify, the management will reconsider the
appointment of Lazar Levine Felix LLP.
The affirmative vote of a majority of the shares present personally or
by proxy at the Meeting is required for the ratification of the appointment of
Lazar Levine Felix LLP.
The Board Recommends a vote FOR the ratification of the appointment of
Lazar Levine & Felix LLP.
No representatives of Lazar Levine Felix LLP are expected to be present
at the Meeting.
Cost of Solicitation
The cost of solicitation of proxies, including reimbursements to banks
and brokers for reasonable expenses in sending proxy material to their
principals, will be borne by the Company. The Company's transfer agent, American
Stock Transfer & Trust Company, is assisting the Company in the solicitation of
proxies from brokers, banks, institutions and other fiduciaries by
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mail, and will charge the Company its customary fee therefor plus
out--of--pocket expenses which, in the aggregate, are estimated to be
approximately $1,200. In addition, proxies may be solicited by officers of the
Company by mail, in person or by telephone or telecopier. It is anticipated that
the total cost of solicitation of proxies will be approximately $4,000.
OTHER BUSINESS TO BE TRANSACTED
Management knows of no other matters to be presented before the Meeting
other those stated above. However, the enclosed proxy gives discretionary
authority to each proxy holder named therein should any other matters be
presented at the Meeting to take such action in connection therewith as shall be
in accordance with his best judgment.
ANNUAL REPORT TO STOCKHOLDERS
The Annual Report to Stockholders for the year ended December 31, 1999
is being mailed to stockholders with this Proxy Statement.
STOCKHOLDER PROPOSAL - 2000 ANNUAL MEETING
Any stockholder proposals to be considered by the Company for inclusion
in the proxy material for the 2001 Annual Meeting of Stockholders must be
received by the Company at its principal executive offices by December 31, 2000.
The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend the
meeting, please sign the proxy and return it in the enclosed envelope.
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PIONEER COMMERCIAL FUNDING CORP.
P R O X Y
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints M. Albert Nissim and David W.
Sass as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all the shares of
the common stock of Pioneer Commercial Funding Corp. held of record by the
undersigned on April 24, 2000, at the annual meeting of shareholders to be held
on May 23, 2000, or any adjournment thereof.
1. ELECTION OF DIRECTORS
For all nominees listed below Withhold Authority to
(Except as Marked to the Vote All Nominees Listed
Contrary) ___ Below ___
Boaz Harel, M.Albert Nissim, Richard Fried, Tamar Lieber, Lynda
Davey and Joseph Samuels.
2. To ratify the appointment of Lazar Levine & Felix LLP as independent auditors
of the Company for the fiscal year ended December 31, 2000.
FOR_______ AGAINST___________
3. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 and 2.
<PAGE>
Please sign name exactly as appears below. When shares are held by
joint tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
Dated: , 2000
----------------
Signature
Signature, if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY USING THE ENCLOSED
ENVELOPE
