================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 10-KSB/A
(Mark One)
[x] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _________ to __________
Commission file number 1-13002
PAGING PARTNERS CORPORATION
(Name of registrant as specified in its charter)
Delaware 22-3281446
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Freehold Office Plaza
4249 Route 9 North, Building 2
Freehold, New Jersey 07728
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (908) 409-7088
Securities registered under Section
12(b) of the Securities Exchange Act of 1934:
Name of each exchange
Title of Each Class on which registered
------------------- -------------------
Common Stock, $0.01 par value Boston Stock Exchange
Securities registered under Section 12(g)
of the Securities Exchange Act of 1934:
Title of Each Class
-------------------
None
Check whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. |X| Yes |_| No
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB |_| Yes |X| No
The revenues of registrant for the fiscal year ended December 31, 1995 were
approximately $5,500,000.
The aggregate market value of the voting stock held by non-affiliates of
the registrant, as of March 25, 1996, was approximately $7,800,000 based upon a
last sales price of $3.25.
As of March 25, 1996, there were 4,800,000 shares of the registrant's
Common Stock outstanding.
<PAGE>
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS
The Company has a classified Board of Directors of five persons divided
into three classes. Directors of each class are elected at the annual meeting of
stockholders held in the year in which the term for such class expires and serve
thereafter for three years. Set forth below for each nominee is his or her name,
age, the year in which he or she became a director of the Company, the year in
which his or her term expires, his or her principal occupations during the last
five years and any additional directorships in publicly-held companies. Unless
otherwise indicated, the following information is current as of June 26, 1996.
Term expires in 1996:
Robert Davidoff, age 69, has served as a director of the Company since its
organization in February 1994. He is currently serving as Managing Director of
Carl Marks & Co., Inc., an investment banking firm, where he has been employed
since June 1950. He is also a general partner of CMNY Capital, L.P., a small
business investment company founded in March 1962, and chairman of CM Capital
Corporation, an investment vehicle which he founded in March 1982, both of which
are affiliated with Carl Marks & Co., Inc. Mr. Davidoff is currently serving on
the Board of Directors of Milgray Electronics Inc., Hubco Exploration, Inc.,
Marisa Christina Corporation, Sidari Corp. and Rex Stores Corporation, all of
which are publicly held corporations.
Richard J. Giacchi, age 47, founded the Company along with Leonard Fink in
August 1990. He served as the President of the general partner of Paging
Partners, L.P. since its formation and was appointed a director and the
President and Chief Executive Officer of the Company upon its organization in
February 1994. From March 1986 to October 1990, Mr. Giacchi was employed as the
Director of Engineering for O.R. Estman, Inc. (also known as Satellite Paging),
a company which provides paging services. In this position, Mr. Giacchi's
responsibilities included design, construction and maintenance of a wide-area
paging system operating throughout the Northeast Corridor. From September 1984
to February 1986, he served as Vice President of Infopage Technologies, Inc.,
for which he developed RCC operations in seven major markets.
Term expires in 1997:
Leonard D. Fink, age 57, founded the Company along with Mr. Giacchi in
August 1990. Mr. Fink served as Secretary and Treasurer of the general partner
of Paging Partners, L.P. since its formation and was appointed Chairman of the
Company upon its organization in February 1994. Since August 1984, Mr. Fink has
served as President of MessageBank, Inc., a privately held voice
mail/telecommunications service business which he founded and continues to own.
From June 1964 through February 1983, Mr. Fink served as President of Phone
Depots, Inc., a radio common carrier paging business he founded and subsequently
sold to Paging Network, Inc. (PageNet).
Term expires in 1997:
Monte Engler, age 54, served as legal adviser to Paging Partners, L.P.,
predecessor to the Company, since its inception, and as a director of the
Company since its organization in February 1994. He is currently a partner at
the law firm of Phillips, Nizer, Benjamin, Krim & Ballon LLP, specializing in
telecommunications matters, where he has worked since November 1984. In
addition, Mr. Engler currently serves as the attorney for the New York State
Radio Common Carrier Association, a paging company trade association. Mr. Engler
was one of the founders of and formerly counsel to the predecessor company to
Cellular One, the non-wireline cellular operator in the New York metropolitan
area.
Rochelle B. King, age 58, has served as an investment banker to the Company
since its inception and as a director of the Company since its organization in
February 1994. From January 1992 to the present, she has been a Senior Advisor
to Bentley Associates L.P. and Bentley Securities Corporation, investment
banking firms. In April 1989, she established King Investment Banking Services
to provide financial services and consulting to the broadcasting, media and
communications industries, which business she continues today. Ms. King has
served as an independent general partner in Kagan Media Partners, a Paine Webber
public limited partnership, since its inception in January 1989, and from April
1989 to January 1990 on the Mabon Nugent & Co. independent advisory board of
Euro-American Media Partners.
-2-
<PAGE>
The names of the directors and executive officers of the Company and their
respective ages and positions are as follows:
Name Age Position
---- --- --------
Leonard D. Fink......... 57 Chairman of the Board of Directors
Richard J. Giacchi...... 47 President, Chief Executive Officer and
Director
Denise Specht........... 45 Vice President - Operations and Secretary
Jeffrey M. Bachrach..... 40 Vice President, Chief Financial Officer,
Treasurer and Assistant Secretary
Robert Davidoff......... 69 Director
Monte Engler............ 54 Director
Rochelle B. King........ 58 Director
Set forth below is certain information concerning certain executive
officers and key personnel of the Company.
Denise Specht, age 45, has served as the General Manager of the Company and
its predecessor since its inception in August 1990 and has served as Vice
President - Operations and Secretary of the Company since its organization in
February 1994. From May 1981 to September 1990, Ms. Specht was the Operations
Manager of Select Designs, Ltd., a custom furniture design and manufacturing
company.
Jeffrey M. Bachrach, age 40, has served as the Company's Vice President,
Finance, and Principal Financial and Accounting Officer, since September, 1994.
From 1988 to December 1992 Mr. Bachrach served as the Vice President, Finance,
and Principal Accounting Officer of Polymerix, Inc., a publicly held company
engaged in the manufacture of plastic lumber. In October 1992 Trimax of Long
Island, Inc., a subsidiary of Polymerix, filed for protection under Chapter 11
of the Bankruptcy Code in the U.S. Bankruptcy Court, Eastern District of New
York. From January 1993 to March 1994 Mr. Bachrach was employed as the Vice
President, Finance of Sadat Associates, Inc., a privately held environmental
consultant.
Frank Atkinson, age 50, has served as a consultant to the Company since its
inception and became Vice President, Director of Management Information Systems
of the Company in May 1994. In December 1993, Mr. Atkinson founded Atkinson
Micro Systems, a company engaged in the design of telecommunications software.
Prior to that, from November 1982 to November 1993, Mr. Atkinson was Vice
President of Atlanta Micro Software, Inc., a telecommunications software company
which he also founded.
-3-
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth information concerning
compensation for services in all capacities awarded to, earned by or paid to Mr.
Giacchi, the Company's Chief Executive Officer, during the years ended December
31, 1993, 1994 and 1995. Mr. Giacchi was the only employee of the Company whose
compensation exceeded $100,000 during such years.
Summary Compensation Table
===============================================================================
Annual Compensation
------------------------------------
Salary Bonus
------ -----
Year ($) ($) Other Annual
Name and Principal Position Compensation
===============================================================================
Richard J. Giacchi 1995 $136.000 0
President and -
Chief Executive Officer
------------------------------------
1994 $126,000 $25,000
------------------------------------
1993 $105,000 -
===============================================================================
Compensation Arrangements
The Company entered into five-year employment agreements with Mr. Giacchi
and Mr. Fink effective May 1994. Mr. Giacchi agreed to devote his entire working
time and attention to the business of the Company during the term of his
agreement. Mr. Fink agreed to devote such of his working time and attention to
the business of the Company as is necessary for him to effectively perform his
duties under his agreement. Mr. Fink currently serves as President of
MessageBank, Inc., a corporation which he founded and continues to own, which is
engaged in the provision of voice mail services and is permitted by the terms of
his agreement to continue to serve in such capacity and to engage in such other
non-competing business activities as will not prevent him from performing his
duties on behalf of the Company. Mr. Giacchi and Mr. Fink have also agreed not
to compete with the business of the Company for a period of two years following
termination of their respective employment agreements.
Pursuant to his employment agreement, Mr. Giacchi is entitled to receive a
salary of $130,000 for the first contract year, $140,000 for the second contract
year and $150,000 for the third contract year. In addition, Mr. Giacchi received
as a bonus incentive compensation of $25,000 for services rendered prior to
December 31, 1994, and none for services rendered in the year ended December 31,
1995, and is entitled to receive as a bonus an amount, not to exceed $100,000,
equal to 2% of the Company's service revenues in excess of $5.2 million for the
year ended December 31, 1996. In addition to his salary, the Company provided
Mr. Giacchi with certain disability and life insurance in addition to that
provided to its employees generally, and the use of an automobile. Mr. Giacchi's
compensation for subsequent contract years shall be as determined by the
Compensation Committee of the Board of Directors. In no event will his base
salary for any contract year be less than the salary for the previous contract
year, plus 7%, and the maximum incentive compensation that can be earned during
any calendar year shall not be less than the maximum incentive compensation
which could have been earned during the previous calendar year.
Pursuant to his employment agreement, Mr. Fink is entitled to receive a
salary of $40,000 for the first contract year, $45,000 for the second contract
year and $50,000 for the third contract year. In addition, Mr. Fink received
incentive compensation of $10,000 for services rendered prior to December 31,
1994, none for services rendered in the year ended December 31, 1995, and is
entitled to receive an amount, not to exceed $35,000, equal to two-thirds of one
percent (0.66%) of the Company's service revenues in excess of $5.2 million for
the year ended December 31, 1996. Mr. Fink's compensation for subsequent
contract years shall be as determined by the Compensation Committee of the Board
of Directors. In no event will his base salary for any contract year be less
than the salary for the previous contract year, plus 7%, and the maximum
incentive compensation that can be earned during any calendar year shall not be
less than the maximum incentive compensation which could have been earned during
the previous calendar year.
-4-
<PAGE>
The Company also has entered into employment agreements with Denise Specht,
Jeffrey Bachrach and Frank Atkinson.
Ms. Specht's current employment agreement is effective through January 1,
1998, and, if not terminated by either party, renews on a year-to-year basis
thereafter. The agreement provides for an annual salary of $90,000 through
January 1, 1997 and $100,000 thereafter through January 1, 1998. As an incentive
to her continued performance, the Company issued to Ms. Specht 29,211 shares of
its Common Stock. Such shares are subject to a right of first refusal in favor
of the Company at a price equal to $4.00 per share below the fair market value
of the shares on the date Ms. Specht seeks to sell such shares. In addition, the
Company has granted to Ms. Specht options to purchase 50,000 shares of the
Company's Common Stock, exercisable at the various fair market prices of the
Common Stock as determined on the respective dates of grant of the options. To
facilitate Ms. Specht's exercise of certain of her stock options, the Company
has agreed to loan to her an amount equal to the exercise price of 30,000
shares. Any shares purchased by Ms. Specht upon exercise of her options shall be
held in escrow as security for such loans.
Mr. Bachrach's current employment agreement is effective through September
30, 1998, and, if not terminated by either party, renews on a year-to-year basis
thereafter. The agreement provides for an annual salary of $88,000 through
September 30, 1996, $99,000 thereafter through September 30, 1997 and $110,000
thereafter through September 30, 1998. In addition, the Company has granted to
Mr. Bachrach options to purchase an aggregate of 50,000 shares of the Company's
Common Stock, exercisable at the various fair market prices of the Common Stock
as determined on the respective dates of grant of the options. To facilitate Mr.
Bachrach's exercise of his stock options, the Company has agreed to pay to him
at such time as he should choose to exercise his options an amount equal to the
exercise price of 10,000 shares and to loan to him an amount equal to the
exercise price of 15,000 shares and an amount intended to enable him to pay any
taxes resulting from the exercise of such stock options. Any shares purchased by
Mr. Bachrach upon exercise of his options shall be held in escrow as security
for such loans.
Mr. Atkinson's current employment agreement is effective through May 26,
1998, and, if not terminated by either party, renews on a year-to-year basis
thereafter. The agreement provides for an annual salary of $85,000 through May
26, 1996, $92,000 thereafter through May 26, 1997 and $101,000 thereafter
through May 26, 1998, plus a bonus each year of $7,000 and a car allowance of
$500 per month. As an inducement to Mr. Atkinson to become employed by the
Company, the Company issued to him 13,421 shares of Common Stock. Such shares
are subject to a right of first refusal in favor of the Company at a price equal
to $4.00 per share below the fair market value of the shares on the date Mr.
Atkinson seeks to sell the shares. The Company has granted to Mr. Atkinson
options to purchase 50,000 shares of the Company's Common Stock, exercisable at
the various fair market prices of the Common Stock as determined on the
respective dates of grant of the options.
-5-
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of March 25, 1996, the Company had outstanding and entitled to vote
4,800,000 shares of Common Stock, par value $.01 per share ("Common Stock"), and
1,800,000 Common Stock Purchase Warrants ("Warrants"). In addition, the
representative of the underwriters of the Company's initial public offering held
options to purchase 170,000 units ("Unit"), each Unit consisting of one share of
Common Stock and one Warrant, and the Company had issued an aggregate of 145,500
options, exercisable at various prices, to its employees for services rendered
to the Company.
To the knowledge of the Company the following table sets forth the
ownership of the Company's Common Stock as of March 25, 1996, by each person
owning more than 5% of such Common Stock, by each officer and director and by
all officers and directors as a group:
Number Percentage
of Beneficially
Name of Beneficial Owner Shares Owned
- ------------------------ ------ -----
Richard J. and Celeste Giacchi(1)(2)........... 1,002,406 20.9%
Leonard D. and Nancy Fink(1)(3)................ 955,372 19.9
Robert Davidoff(1)(4).......................... 235,168 4.9
Rochelle B. King(1)(5)......................... 135,138 2.8
Monte Engler(1)(6)............................. 29,396 *
Denise Specht(1)(7)............................ 59,211 1.2
Jeffrey M. Bachrach (8)........................ 12,500 *
All directors and officers as a group
(8 persons)(2)(3)(4)(5)(6)(7)(8)............. 2,444,191 50.4%
- ------------------------
* Less than 1%.
(1) The business address of Mr. and Mrs. Fink, Mr. and Mrs. Giacchi and Ms.
Specht is c/o Paging Partners, 4249 Route 9 North, Freehold, New Jersey
07728. The business address of Robert Davidoff is c/o Carl Marks & Co.,
Inc. 135 E. 57th Street, New York, New York 10022. The business address of
Rochelle B. King is c/o Bentley Associates L.P., 1155 Avenue of the
Americas, New York, New York, 10036. The business address of Monte Engler
is c/o Phillips, Nizer, Benjamin, Krim & Ballon LLP, 666 Fifth Avenue, New
York, New York 10103.
(2) Includes (i) 508,553 shares held of record by Mr. Giacchi; (ii) 470,337
shares held of record by Mrs. Giacchi, his wife, and (iii) 23,516 shares
held of record by trusts for the benefit of their minor children. Mr. and
Mrs. Giacchi each disclaims any beneficial ownership of the shares held of
record by the other. Excludes 14,126 shares held of record by Mr. Giacchi's
adult son, Jeremy Giacchi.
(3) Includes (i) 485,035 shares held of record by Mr. Fink and (ii) 470,337
shares held of record by Mrs. Fink, his wife, Mr. and Mrs. Fink each
disclaims any beneficial ownership of the shares held of record by the
other. Excludes 58,792 shares held of record by the adult children of Mr.
and Mrs. Fink.
(4) The shares attributed to Mr. Davidoff are owned by CMNY Capital I and CMNY
Capital II; Mr. Davidoff is a general partner of CMNY Capital I and CMNY
Capital II and disclaims beneficial ownership of such shares.
(5) Includes 7,894 shares held of record by trusts for the benefit of Ms.
King's grandchildren. Excludes 11,842 shares held of record by Ms. King's
adult children.
(6) All of such shares are held of record by Mr. Engler's wife and he disclaims
any beneficial ownership thereof.
(7) Includes 30,000 shares which may be acquired pursuant to options
exercisable within sixty (60) days of the date hereof.
(8) These are shares which may be acquired pursuant to options exercisable
within sixty (60) days of the date hereof.
-6-
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company currently leases space from MessageBank, Inc., a corporation
owned by Mr. Fink, for which it pays approximately $1,300 per month. Management
believes that the terms of such lease are no less favorable to the Company than
those which would be available from a third party. MessageBank, Inc. also
provides voicemail and other services to the Company for which it is paid its
standard charges. The amount of revenues paid to MessageBank, Inc. during each
of 1994 and 1995 for services rendered to the Company was less than $5,000. The
Company anticipates that it will continue to lease space and purchase certain
services from MessageBank, Inc. in the future, but the volume of such purchases
is not anticipated to substantially increase.
From time to time Rochelle King renders investment banking services to the
Company for which she or Bentley Associates, L.P., which she serves as a senior
adviser is compensated. During 1994 and 1995, the Company paid $40,000 and
$23,000, respectively, for investment banking services performed by Ms. King.
Monte Engler, a director of the Company, is a partner at the law firm of
Phillips, Nizer, Benjamin, Krim & Ballon LLP, which performs legal services for
the Company.
-7-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: June 26, 1996
PAGING PARTNERS CORPORATION
(Registrant)
By: /s/Richard J. Giacchi
-----------------------------
Richard J. Giacchi, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/Leonard D. Fink Chairman of the Board of Directors June 26, 1996
- ----------------------
Leonard D. Fink
/s/Richard J. Giacchi President, Director June 26, 1996
- ----------------------
Richard J. Giacchi and Principal Executive Officer
/s/Jeffrey M. Bachrach Vice President, Treasurer, Assistant June 26, 1996
- ----------------------
Jeffrey M. Bachrach Secretary and Principal Financial and
Accounting Officer
/s/Robert Davidoff Director June 26, 1996
- ----------------------
Robert Davidoff
/s/Monte Engler Director June 26, 1996
- ----------------------
Monte Engler
/s/Rochelle B. King Director June 26, 1996
- ----------------------
Rochelle B. King
-8-
