<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A
(RULE 14a-101)
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:
<TABLE>
<S> <C>
[ ] 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
</TABLE>
FINANTRA CAPITAL, INC.
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(Name of Registrant as Specified In Its Charter)
N/A
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(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)(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> 2
FINANTRA CAPITAL, INC.
150 SOUTH PINE ISLAND ROAD, SUITE 500
PLANTATION, FLORIDA 33324
-------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 2, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of FINANTRA CAPITAL, INC., a Delaware corporation ("Company"), will
be held at the Hyatt Regency Hotel, 50 Alhambra Plaza, Coral Gables, Florida
33134 on Thursday, September 2, 1999, at 8:00 A.M., local time, for the
following purposes:
1. To elect seven directors to hold office until the next Annual Meeting of
Stockholders and until their respective successors have been duly elected and
qualified; and
2. To transact such other business as may properly come before the Meeting and
at all adjournments thereof.
The transfer books of the Company will not be closed for the Meeting.
Only stockholders of record, however, at the close of business on July 12, 1999
will be entitled to notice of, and to vote at, the Meeting and at all
adjournments thereof.
YOU ARE URGED TO READ THE ATTACHED PROXY STATEMENT WHICH CONTAINS
INFORMATION RELEVANT TO THE ACTIONS TO BE TAKEN AT THE MEETING. IN ORDER TO
ASSURE THE PRESENCE OF A QUORUM, WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING
IN PERSON, PLEASE SIGN AND DATE THE ACCOMPANYING PROXY CARD AND MAIL IT PROMPTLY
IN THE ENCLOSED ADDRESSED, POSTAGE PREPAID ENVELOPE. YOU MAY REVOKE YOUR PROXY
IF YOU SO DESIRE AT ANY TIME BEFORE IT IS VOTED.
By Order of the Board of Directors
Alyce B. Schreiber, Executive
Vice President and Secretary
July 19, 1999
<PAGE> 3
FINANTRA CAPITAL, INC.
---------------
PROXY STATEMENT
---------------
GENERAL INFORMATION
ANNUAL MEETING
This Proxy Statement and the enclosed form of proxy are furnished in
connection with the solicitation of proxies by the Board of Directors of
Finantra Capital, Inc., a Delaware corporation (the "Company"), to be used at
the Annual Meeting of Stockholders of the Company to be held at 8:00 A.M., local
time, on Thursday, September 2, 1999, at the Hyatt Regency Hotel, 50 Alhambra
Plaza, Coral Gables, Florida 33134, and at all adjournments thereof (the
"Meeting"). The matters to be considered at the Meeting are set forth in the
attached Notice of Meeting.
The Company's executive offices are located at 150 South Pine Island
Road, Suite 500, Plantation, Florida 33324. On or about July 19, 1999, this
Proxy Statement, the enclosed form of proxy, the Company's Annual Report on Form
10-KSB for the fiscal year ended December 31, 1998 ("Fiscal 1998"), which
contains Fiscal 1998 audited financial statements, and Quarterly Report on Form
10-QSB for the quarter ended March 31, 1999 were mailed to stockholders of
record of the Company as of the close of business on July 12, 1999. The Company
will furnish to any stockholder copies of any exhibits listed in the Forms
10-KSB or 10-QSB upon such stockholder's request and payment of a fee not
exceeding the reasonable expenses of furnishing such copies.
SOLICITATION AND REVOCATION
Proxies in the form enclosed are solicited by and on behalf of the
Board of Directors. The persons named in the proxy have been designated as
proxies by the Board of Directors. Any proxy given pursuant to such solicitation
and received in time for the Meeting will be voted as specified in such proxy.
If no instructions are given, proxies will be voted FOR the election of the
nominees listed below under the caption "Election Of Directors" and in the
discretion of the proxies named on the proxy card with respect to any other
matters properly brought before the Meeting and any adjournments thereof. In the
unanticipated event that any other matters are properly presented at the Meeting
for action, the persons named in the proxy will vote the proxies in accordance
with their best judgment. Any proxy given pursuant to this solicitation may be
revoked by the stockholder at any time before it is exercised by written
notification delivered to the Secretary of the Company, by voting in person at
the Meeting or by delivering another proxy bearing a later date. Attendance by a
stockholder at the Meeting does not alone serve to revoke his or her proxy.
QUORUM
The presence of the holders of a majority of the outstanding shares of
common stock, $.01 par value per share, of the Company (the "Common Stock")
represented in person or by proxy at the Meeting, will constitute a quorum.
Shares represented by proxies that are marked "abstain" and proxies relating to
"street name" shares that are returned to the Company but marked by brokers as
"not voted" ("broker non-votes") will be treated as shares present for purposes
of determining the presence of a quorum on all matters unless authority to vote
is completely withheld on the proxy.
RECORD DATE; OUTSTANDING SHARES
The Board of Directors has fixed the close of business on July 12, 1999
as the record date for the determination of stockholders of the Company entitled
to receive notice of, and to vote at, the Meeting. At the close of business on
July 12, 1999, an aggregate of 6,809,358 shares of Common Stock were issued and
outstanding, each
<PAGE> 4
of which is entitled to one vote on each matter to be voted upon at the Meeting.
The Company's stockholders do not have cumulative voting rights. The Company has
no other class of voting securities entitled to vote at the Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of July 19, 1999,
based on information obtained from the persons named below, with respect to the
stock ownership of (i) each person or group known to the Company to be the
beneficial owner of more than 5% of the Company's Common Stock, (ii) each
director of the Company, (iii) each executive officer of the Company and (iv)
all directors and executive officers of the Company as a group. As of July 19,
1999, there were issued and outstanding 7,192,328 shares of Common Stock.
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS AMOUNT AND NATURE OF OUTSTANDING
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) SHARES OWNED
- ------------------- ------------------------ ------------
<S> <C> <C>
Medley Group, Inc.
150 South Pine Island Road
Plantation, FL 33324 900,190(2) 12.52%
Robert D. Press
150 South Pine Island Road
Plantation, FL 33324 1,975,209(2)(3) 27.46%
Arthur J. Press
1268 Hemlock Farms
Hawley, PA 18428 37,336(4) *
Maynard Hellman
150 South Pine Island Road
Plantation, FL 33324 770,750(5) 10.72%
Evaldo F. Dupuy
3911 Riviera Drive
Coral Gables, FL 33134 60,000(6) *
Charles Litt 2,000(7) *
150 South Pine Island Road
Plantation, FL 33324
Thomas W. Dwyer
2 Hathaway Drive
Princeton Junction, NJ 08550 36,240(8) *
Alyce B. Schreiber
150 South Pine Island Road
Plantation, FL 33324 57,600(9) *
All directors and officers
as a group (seven persons) 2,939,135(3)(4)(5)(6) 40.86%
(7)(8)(9)
</TABLE>
- -----------------
* Represents less than 1%
<PAGE> 5
(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date of this Proxy
Statement upon the exercise or conversion of options, warrants or other
convertible securities. Each beneficial owner's percentage ownership is
determined by assuming that options, warrants or other convertible
securities that are held by such person (but not those held by any
other person) and that are exercisable or convertible within 60 days
from the date of this Proxy Statement have been exercised or converted.
Unless otherwise noted, the Company believes that all persons named in
the table have sole voting and investment power with respect to all
shares of Common Stock beneficially owned by them.
(2) Mr. Press, the Chairman of the Board of the Company, may be deemed to
control Medley Group, Inc. ("Medley Group"). As such, Mr. Press may be
deemed to own beneficially all Common Stock of the Company beneficially
owned by Medley Group.
(3) Includes 129,351 shares of Common Stock issuable upon the conversion of
604,717 shares of the Company's Series A Preferred Stock (the "Series A
Preferred Stock") owned by Mr. Press. Also includes (i) 142,500 shares
of Common Stock issuable upon the exercise of certain warrants that are
exercisable at any time on or prior to September 30, 2000 at $1.50 per
share and (ii) 25,000 shares of Common Stock issuable upon the exercise
of certain options that are exercisable at any time on or prior to
December 31, 2003 at $2.88 per share. Does not include an additional
(i) 25,000 shares of Common Stock issuable upon the exercise, after
September 30, 1999 but on or prior to March 31, 2004, of certain
options at $3.23 per share and (ii) 25,000 other shares of Common Stock
issuable upon the exercise, after December 31, 1999 but on or prior to
June 30, 2004, of certain other options at $5.16 per share. Robert D.
Press is the son of Arthur J. Press. Robert Press disclaims beneficial
ownership over all shares of Common Stock beneficially owned by Arthur
J. Press.
(4) These shares are owned by an affiliate of Mr. Press. Includes 21,925
shares of Common Stock issuable upon the conversion of 102,500 shares
of Series A Preferred Stock owned by an affiliate of Mr. Press. Peggy
Press, the wife of Arthur J. Press and the mother of Robert D. Press,
beneficially owns 29,168 shares of Common Stock. Each of Mr. Arthur J.
Press and Robert D. Press disclaims beneficial ownership over all
shares of Common Stock of the Company owned by Mrs. Press. Arthur J.
Press is the father of Robert D. Press. Mr. Press disclaims beneficial
ownership over all shares of Common Stock beneficially owned by Robert
D. Press.
(5) Includes 500,000 shares of Common Stock issuable upon the exercise of
certain warrants exercisable until December 31, 2002 at $2.50 per
share, (ii) 75,000 shares of Common Stock issuable upon the exercise of
certain options that are exercisable at any time on or prior to
December 16, 2003 at $2.13 per share and (iii) 18,750 other shares of
Common Stock issuable upon the exercise of certain other options that
are exercisable at any time on or prior to December 31, 2003 at $2.88
per share. Does not include an additional (i) 50,000 shares of Common
Stock the Company is contractually obligated to issue to Mr. Hellman in
annual installments through 2003 arising out of Mr. Hellman's sale to
the Company of his interest in certain of the Company's subsidiaries
and a Florida based title insurance company, (ii) an additional 18,750
shares of Common Stock issuable upon the exercise, after September 30,
1999 but on or prior to March 31, 2004, of certain options at $2.94 per
share and (iii) 18,750 other shares of Common Stock issuable upon the
exercise, after December 31, 1999 but on or prior to June 30, 2004, of
certain other options at $4.69 per share.
(6) Includes 50,000 shares of Common Stock issuable upon the exercise of
certain options that are exercisable at any time on or prior to June 8,
2001 at $1.50 per share.
(7) Does not include 100,000 shares of Common Stock issuable upon the
exercise, after November 16, 1999 but on or prior to May 17, 2002, of
certain options at $4.00 per share.
(8) Represents shares of Common Stock issuable upon the conversion of
169,419 shares of Series A Preferred Stock owned by Mr. Dwyer.
(9) Includes 10,000 shares of Common Stock issuable upon the exercise of
certain options that are exercisable at any time on or prior to May 31,
2000 at $1.20 per share and 40,000 shares of Common Stock issuable upon
the exercise of certain other options that are exercisable, as to
20,000 shares, at any time on or prior to August 30, 2000, and as to
the other 20,000 shares, at any time on or prior to October 31, 2000,
each at $2.00 per share. Does not include (i) 12,500 shares of Common
Stock issuable upon the exercise, after September 30, 1999 but on or
prior to March 31, 2004, of certain options at $2.94 per share and (ii)
12,500 other shares of Common Stock issuable upon the exercise, after
December 31, 1999 but on or prior to June 30, 2004, of certain other
options at $4.69 per share.
<PAGE> 6
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and officers and persons who beneficially own
greater than 10% of the Company's Common Stock to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock in the Company. Officers, directors and greater than
10% stockholders are also required to furnish the Company with copies of all
Section 16(a) reports they file. To the Company's knowledge, based solely on
review of the copies of such reports furnished to the Company and written
representations that no other reports were required during the Fiscal 1998, all
Section 16(a) filing requirements were complied with.
PROPOSAL ONE: ELECTION OF DIRECTORS
The By-laws of the Company provide that the Board of Directors shall
determine the number of Directors. The Board has determined that the number of
Directors to be elected at the Meeting shall be seven. The persons listed below
have been designated by the Board as candidates for election as Directors to
serve until the next Annual Meeting of Stockholders and until their respective
successors have been duly elected and qualified. Such persons include all of the
executive officers of the Company. Unless otherwise specified in the form of
proxy, the proxies solicited by management will be voted FOR the election of
these candidates. The nominees receiving the highest vote totals will be elected
as Directors of the Company. Accordingly, abstentions and broker non-votes will
not affect the outcome of the election for Directors of the Company. In case any
of these nominees become unavailable for election to the Board of Directors, an
event which is not anticipated, the persons named as proxies, or their
substitutes, shall have full discretion and authority to vote or refrain from
voting for any other nominee in accordance with their judgment. The election of
Directors requires a plurality of those shares voted at the Meeting with respect
to the election of Directors.
INFORMATION ABOUT THE NOMINEES
ROBERT D. PRESS has served as Chairman of the Board of the Company
since August 1997 and as a Director of the Company since its inception in
September 1993. From September 1993 through May 1999, Mr. Press also served as
President of the Company. Mr. Press devotes all of his business time and efforts
to the affairs of the Company. From June 1990 to August 1993, Mr. Press served
as President of Premier Lease Concepts, Inc., the Company's predecessor. In
addition, from 1989 to 1997, Mr. Press served as President of Performance
Capital Management, Inc., a holding company controlled in part by Mr. Press,
which had interests in brokerage and investment management, and as President of
Medley Group since October 1992. Mr. Press also served, from 1991 to July 1997,
as a licensed registered representative of PCM Securities Limited, L.P., an NASD
registered broker-dealer. Mr. Press holds a B.A. degree in Economics from
Brandeis University. From 1984 to 1986, Mr. Press worked as a full-time trading
systems consultant to several major Wall Street firms, including The Longview
Group. In 1986, Mr. Press joined Chemical Bank, N.A. ("Chemical Bank") as an
internal consultant in trading and capital markets, and later in 1986, Mr. Press
joined in the formation of Chemical Bank's Interest Rate Arbitrage trading
group, of which Mr. Press became the principal trader responsible for the global
trading and investment decisions of a multi-billion dollar portfolio. Mr. Press
holds Series 7 and 63 professional securities licenses. Mr. Press is the son of
Arthur J. Press, a director of the Company.
CHARLES LITT has served as President of the Company since May 1999.
From 1996 to May 1999, Mr. Litt served as Vice President and General Counsel for
First Sierra Financial, Inc. ("First Sierra"), a publicly held specialty finance
company. Mr. Litt's responsibilities at First Sierra included the negotiation of
vendor program agreements and the structuring of major leasing and finance
transactions. From 1993 to 1996, Mr. Litt served as President of Kinnard Capital
Corporation, a subsidiary of Kinnard Investments, a Minneapolis based investment
company with broker dealer and financial focused subsidiaries. Prior to 1993,
Mr. Litt served in various positions for Banc One Leasing Corporation.
MAYNARD J. HELLMAN has served as a Director of the Company since
January 1997. Since January 1988, Mr. Hellman has served as managing partner of
the Coral Gables, Florida based law firm of Hellman & Mass. From 1983
<PAGE> 7
until 1988, Mr. Hellman was engaged in the private practice of law and prior
thereto, Mr. Hellman served as a partner in the Miami, Florida law firm of
Gilbert, Silverstein and Hellman. Mr. Hellman holds a J.D. degree from the
University of Miami School of Law and a B.B.A degree in Accounting from the
University of Miami School of Business Administration.
ARTHUR J. PRESS has served as a Director of the Company since January
1998. Prior to his retirement in 1987, Mr. Press served as the Vice President of
Commercial Lending for Chemical Bank. Mr. Press is the father of Robert D.
Press, the Chairman of the Board of the Company.
EVALDO F. DUPUY has served as a Director of the Company since July
1998. Since 1989, Mr. Dupuy has served as a principal of Coast Partners
Securities, Inc., a boutique investment banking firm specializing in asset
backed and debt related facilities for its clients. Mr. Dupuy is a member of the
Florida Premium Finance Association, Florida Automobile Dealers Association,
Florida Mortgage Brokers Association and the Asset Based Lender Association.
THOMAS W. DWYER has served as a Director of the Company since March
1999. Since 1994, Mr. Dwyer has served as Vice President of Fuji Capital Markets
Corp., a derivatives trading house owned by Fuji Bank Tokyo. In addition, since
1998, Mr. Dwyer has served as a director of Securities Arbitrage Consulting
Group, a Chicago based risk software company.
ALYCE B. SCHREIBER has served as a Director and Executive Vice
President of the Company since March 1999 and as Secretary of the Company since
November 1997. From 1990 to March 1999, Ms. Schreiber served as Vice President
of the Company. Prior to Ms. Schreiber's becoming associated with the Company,
Ms. Schreiber served as a tax specialist for Laventhol and Horwath, a certified
public accounting firm. Ms. Schreiber holds a J.D. degree from Cardozo School of
Law and a B.B.A. degree in Accounting from the Boston University School of
Management.
OTHER KEY EMPLOYEES
FREDERICK HORWIN has served as principal of the Company's American
Factors Group, Inc. subsidiary ("AFG") since its formation in 1998. AFG is
engaged, generally, in accounts receivable financing. Mr. Horwin served as
Executive Vice President and Executive Director of First Capital Services, Inc.,
an entity engaged, generally, in accounts receivable financing ("First
Capital"), for more than five years preceding his affiliation with AFG.
MALCOLM L. RESNICK has served as one of the principals of the Company's
Ameri-Cap Mortgage Group subsidiary ("Ameri-Cap Mortgage") since December 1998.
Ameri-Cap Mortgage controls Ameritrust Holdings, Inc., a licensed mortgage
lender engaged in both residential and commercial lending. From January 1992 to
December 1998, Mr. Resnick served as General Partner or President of several
upper-class single family, townhouse and condominium real estate development
projects throughout Southeastern Florida. In addition, from January 1983 to
April 1993, Mr. Resnick served as President and principal/owner of Sunshine
Financial Corp., one of the then largest privately-held mortgage banking firms
in South Florida.
DIRECTORS' FEES, BOARD MEETINGS AND COMMITTEES
The Company's Board has established Audit and Compensation Committees.
The Audit Committee meets with management to consider the adequacy of the
internal controls of the Company and the objectivity of the Company's financing
reporting. The Audit Committee also meets with the Company's independent
accountants and with appropriate Company financial personnel about these
matters. The Compensation Committee administers the Company's 1997 Stock Option
Plan (the "Option Plan") and makes recommendations to the Board of Directors
with respect to the compensation of management. The Audit and Compensation
Committees are comprised of Messrs. Dupuy and Dwyer and Ms. Schreiber.
<PAGE> 8
The Board of Directors met or took written action by unanimous written
consent four times during Fiscal 1998. None of the then Directors of the Company
attended (or executed written consents at) less than 75% of such meetings. Each
non-employee Director receives a fee of $500 for each meeting (or committee
meeting) attended, together with reimbursement of reasonable expenses incurred
in attending such meeting.
EXECUTIVE COMPENSATION
During Fiscal 1998, the Company paid to Robert D. Press, the Company's
Chairman of the Board and then President, cash remuneration of $225,000. During
Fiscal 1998, Mr. Press was the sole executive officer of the Company. During
Fisca1 1998, Mr. Press, in accordance with the terms of his employment agreement
with the Company, as amended, was also issued an aggregate of 120,000 shares of
the Company's Common Stock. Mr. Press, however, waived his right to receive a
minium cash bonus of $45,000 relating to Fiscal 1998. No other form of
remuneration was paid by the Company to Mr. Press during, or on account of,
Fiscal 1998. The following table summarizes the aggregate annual compensation
payable by the Company to Messrs. Press, Charles Litt, President and a Director
of the Company, and Maynard J. Hellman, General Counsel and a Director of the
Company, and Alyce B. Schreiber, Executive Vice President, Secretary and a
Director of the Company, for the year ending December 31, 1999 ("Fiscal 1999"):
NAME OF INDIVIDUAL CAPACITIES TO SERVE AGGREGATE COMPENSATION
- ------------------ ------------------- ----------------------
Robert D. Press Chairman of the Board $275,000
Charles Litt President $250,000
Maynard J. Hellman General Counsel $180,000
Alyce B. Schreiber Executive
Vice President and Secretary $ 85,000
Pursuant to Mr. Press' employment agreement with the Company, as
amended, Mr. Press has agreed to serve as Chairman of the Board of the Company.
This employment agreement expires on December 31, 2004 (subject to earlier
termination for cause). Mr. Press' employment agreement further provides for Mr.
Press' salary to increase to $350,000 per annum during the year beginning
January 1, 2000, with such annual salary increasing 10% per annum thereafter. In
addition, Mr. Press is entitled to receive minimum cash bonuses of $60,000 and
$75,000, respectively, for Fiscal 1999 and the year ending December 31, 2000
("Fiscal 2000"). Mr. Press is also entitled to receive 40,000 shares of the
Company's Common Stock following the close of each calendar quarter during
Fiscal 1999, 50,000 shares of Common Stock following the close of each calendar
quarter during Fiscal 2000 and 25,000 shares of Common Stock following the close
of each calendar quarter thereafter. Mr. Press' employment agreement also
provides for the annual grant to him of 100,000 incentive stock options. These
options are exercisable over the five year period following their grant at a
price equal to 110% of the fair market value for shares of the Company's Common
Stock at the date of grant. Mr. Press is entitled to participate in all medical,
stock option, pension and other benefit plans that the Company may establish
from time to time for its senior management generally. Mr. Press' employment
agreement is terminable by the Company for cause (i.e., conviction of a felony,
willful misconduct, dishonesty or material breach of the agreement) at any time
or in the event that Mr. Press becomes disabled and, as a result, is unable to
perform his duties under his employment agreement for more than 60 consecutive
days or for more than 90 days during any 12-month period.
Pursuant to Mr. Litt's employment agreement with the Company, Mr. Litt
has agreed to serve as President of the Company. This employment agreement
expires on May 16, 2004 (subject to earlier termination for cause or
disability). Mr. Litt shall be paid an annual salary under this agreement of
$250,000. Mr. Litt was granted 100,000 stock options in connection with the
execution of his employment agreement and, pursuant to his employment
<PAGE> 9
agreement, shall be granted an additional 100,000 stock options on each December
31 during the term of the agreement. All such options have and shall have a six
month vesting period, an exercise period of 36 months following their date of
grant and an exercise price equal to the fair market value for shares of the
Company's Common Stock on their date of grant less the maximum allowable
discount which will not create income to Mr. Litt or an expense to the Company.
In addition, the Company is required to provide Mr. Litt with a furnished
apartment and an automobile during the term of his employment. Mr. Litt may
nonetheless terminate his affiliation with the Company and continue to receive
benefits and compensation under his employment agreement for the lesser of 24
months following his termination of employment or the remaining term under his
employment agreement if the Company is convicted of a felony within which Mr.
Litt had no knowledge or complicity, or an officer, Director or employee of the
Company is convicted of a felony and the Company, notwithstanding Mr. Litt's
request, refuses to discharge such person, or the Company requires Mr. Litt to
relocate his residence from Atlanta, Georgia to South Florida. Subject to
eligibility requirements, Mr. Litt is entitled to participate in all medical,
stock option, pension and other benefit plans the Company may establish from
time to time for its senior management generally.
Pursuant to Mr. Hellman's employment agreement with the Company, Mr.
Hellman has agreed to serve as General Counsel, giving and rendering legal
services, to the Company. This employment agreement expires on December 31, 2004
(subject to (i) automatic annual extensions unless written notice of expiration
is provided by Mr. Hellman or the Company and (ii) earlier termination for cause
or disability). Mr. Hellman's salary for Fiscal 1999 under this agreement is
$180,000. Commencing with Fiscal 2000, Mr. Hellman's annual salary shall be
increased annually by the lesser of the then cost of living increase, if any, or
5%. Mr. Hellman was granted 75,000 incentive stock options in connection with
the execution of his employment agreement and, pursuant to his employment
agreement, shall be granted an aggregate of 75,000 incentive stock options
during each year of his employment agreement. All such incentive stock options
are and will be exercisable over the five year period following their grant at a
price equal to the fair market value for shares of the Company's Common Stock at
the date of grant. Subject to eligibility rules, Mr. Hellman is entitled to
participate in all medical, stock option, pension and other benefit plans the
Company may establish from time to time for its senior management generally.
Pursuant to Ms. Schreiber's employment agreement with the Company, Ms.
Schreiber has agreed to serve as Executive Vice President of the Company. This
employment agreement expires on December 31, 2003 (subject to earlier
termination for cause or disability). Ms. Schreiber's annual salary for Fiscal
1999 under this agreement is $85,000, and such annual salary shall increase
annually by $5,000 increments during the term of her employment agreement. Ms.
Schreiber's employment agreement further provides that she will be granted an
aggregate of 50,000 incentive stock options during each year of her employment
agreement. All such incentive stock options will be exercisable over the five
year period following their grant at a price equal to the fair market value for
shares of the Company's Common Stock at the date of grant. Subject to
eligibility rules, Ms. Schreiber is entitled to participate in all medical,
stock option, pension and other benefit plans the Company may establish from
time to time for its senior management generally. Ms. Schreiber has agreed,
generally, not to compete with the Company during the term of her employment and
for the 18-month period immediately thereafter.
In connection with the formation of AFG , the Company, during 1998,
through AFG, entered into a three-year employment agreement (which automatically
renews for additional one-year periods unless AFG provides 30 days' prior notice
of cancellation) with Frederick Horwin, a seasoned finance professional.
Pursuant to this agreement, Mr. Horwin agreed to serve as the operating officer
of AFG in consideration for a base salary of $120,000 per annum. Mr. Horwin has
agreed not to compete with the Company or AFG during the term of his employment
with AFG and for the two-year period immediately thereafter.
For purposes of developing and expanding Ameri-Cap Mortgage's business
and operations, the Company, through Ameri-Cap Mortgage, during December 1998,
entered into a five-year employment agreement (subject to earlier termination
for cause or disability) with Malcolm L. Resnick, a seasoned real estate
development, banking and finance professional. Pursuant to this agreement, Mr.
Resnick has agreed to serve as President of Ameri-Cap Mortgage in consideration
of $25,000 per annum. Mr. Resnick was granted 200,000 incentive stock options in
connection with the execution of his employment agreement, which stock options
are exercisable at any time during
<PAGE> 10
Mr.Resnick's employment at an exercise price equal to 110% of the fair market
value for shares of the Company's Common Stock on the date the options were
granted. Mr. Resnick is required to devote only so much of his time and efforts
to the business of Ameri-Cap as is necessary for Ameri-Cap to accomplish its
business goals. The Company has acknowledged that Mr. Resnick, during the term
of his employment agreement, may continue to manage, for his own account, his
existing real estate development and construction businesses. Subject to
exceptions permitting Mr. Resnick to continue his existing businesses, Mr.
Resnick has agreed, generally, not to compete with the Company during the term
of his employment and for the 18-month period immediately thereafter.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In connection with the formation of AFG during 1998, Mr. Frederick
Horwin was granted the right, over time, to exchange his equity interest in AFG
for shares of the Company's Common Stock (aggregating less than 1% of the
Company's outstanding shares) upon AFG's achieving certain financial performance
levels. Mr. Horwin is also entitled to established cash bonuses based upon AFG's
financial performance.
In connection with the formation of Ameri-Cap Mortgage during 1998, Mr.
Malcolm Resnick was granted the right, on the first Tuesday of January, 2000 and
on the same day in 2001, 2002, 2003 and 2004, to exchange 3,000 shares of the
common stock of Ameri-Cap Mortgage owned by Mr. Resnick on such date into such
number of shares of the Company's Common Stock as shall equal $155,000 divided
by the average closing price for shares of the Company's Common Stock for the 20
days preceding the exchange, provided that such average closing price shall
never be deemed to be less than $2.00 nor more than $6.00. Mr. Resnick was
further granted an additional five-year exchange right whereby he shall be
entitled to exchange 20% of his common stock in Ameri-Cap Mortgage each year for
shares of the Company's Common Stock at a formula rate that is based upon
Ameri-Cap Mortgage's annual pre-tax net profit. The Company has been granted the
right, under certain circumstances, to redeem Mr. Resnick's equity interest in
Ameri-Cap Mortgage at a formula price if Mr. Resnick ceases to be employed by
the Company.
During December 1998, the Company agreed to forgive an outstanding loan
in the then outstanding amount of $68,000 made to Mr. Robert D. Press, the
Company's Chairman of the Board, at the rate of 20% per year beginning during
Fiscal 1999.
On December 31, 1998, the Company and Medley Group entered into an
agreement pursuant to which, among other things, the manner in which the then
$663,089.24 outstanding inter-company debt owing to the Company by Medley Group
was scheduled for repayment. Specifically, Medley Group paid the Company $50,000
upon the execution of this agreement and agreed to pay the Company the remaining
balance by December 31, 2004.
During January 1999, the Company, through Ameri-Cap Mortgage, acquired
from Mr. Maynard Hellman, General Counsel and a Director of the Company, 80% of
the outstanding capital stock of Suncoast Title Company, Inc., a Florida title
insurance company ("Suncoast"), for 50,000 shares of the Company's Common Stock.
The Company has agreed to acquire the remaining 20% of the outstanding capital
stock of Suncoast from Mr. Hellman in equal, annual installments through 2002
for an aggregate of 50,000 additional shares of the Company's Common Stock.
During February 1999, the Company, through its Ameri-Cap Factors Group
subsidiary ("Ameri-Cap Factors"), acquired from Mr. Hellman, .6% of the
outstanding capital stock of Ameri-Med Financial Services, Inc., a Florida
medical receivables financing business ("Ameri-Med Financial"), for 35,000
shares of the Company's Common Stock. Ameri-Cap Factors previously owned 80% of
the outstanding capital stock of Ameri-Med Financial. The Company has agreed,
through 2003, to acquire an additional 2.4% of the capital stock of Ameri-Med
Financial owned by Mr. Hellman for an aggregate of 140,000 additional shares of
the Company's Common Stock.
<PAGE> 11
Also during February 1999, the Company acquired from Mr. Hellman 1.4%
of the outstanding capital stock of the Company's Ameri-Cap Mortgage subsidiary
for 80,000 shares of the Company's Common Stock. The Company previously owned
80% of the outstanding capital stock of Ameri-Cap Mortgage. The Company has
agreed, through 2003, to acquire an additional 5.6% of the capital stock of
Ameri-Cap Mortgage owned by Mr. Hellman for an aggregate of 320,000 additional
shares of the Company's Common Stock.
SOLICITATION OF PROXIES
The solicitation of proxies in the enclosed form is made on behalf of
the Company and the cost of this solicitation is being paid by the Company. In
addition to the use of the mails, proxies may be solicited personally or by
telephone or telegraph using the services of Directors, officers and regular
employees of the Company at nominal cost. Banks, brokerage firms and other
custodians, nominees and fiduciaries will be reimbursed by the Company for
expenses incurred in sending proxy material to beneficial owners of the
Company's Common Stock.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the annual
meeting for the 1999 fiscal year must be received at the Company's offices by
April 9, 2000 for inclusion in the proxy materials relating to such meeting.
Action may be taken on the business to be transacted at the Meeting on
the date provided in the Notice of Meeting and on any date or dates to which an
original or later adjournment of such Meeting may be adjourned. As of the date
of this Proxy Statement, management does to know of any other matters to be
presented at the Meeting. If, however, other matters properly come before the
Meeting, whether on the original date provided in the Notice of Meeting or any
dates to which any original or later adjournment of such Meeting may be
adjourned, it is intended that the holders of the proxy will vote in accordance
with their best judgment. Any such matter properly coming before the Meeting
will be decided by a majority of the votes cast with respect to such matter.
Abstentions and broker non-votes are not considered as cast and, accordingly,
will have no effect on the vote with respect to such matter.
By Order of the Board of Directors
Dated: July 19, 1999
<PAGE> 12
FINANTRA CAPITAL, INC.
Solicited by The Board of Directors for the Annual Meeting of Stockholders to
be held on September 2, 1999
PROXY
The undersigned Stockholder(s) of FINANTRA CAPITAL, INC., a Delaware
corporation (the "Company"), hereby appoint(s) Robert D. Press and Maynard J.
Hellman, with full power of substitution and to act without the other, as the
agents, attorneys and proxies of the undersigned, to vote the shares of Common
Stock, $.01 par value per share, of the Company standing in the name of the
undersigned at the Annual Meeting of Stockholders of the Company to be held on
Thursday September 2, 1999 and at all adjournments thereof. This proxy will be
voted in accordance with the instructions given below. If no instructions are
given, this proxy will be voted FOR the following proposal:
1. To elect the following Directors: Robert D. Press, Maynard J. Hellman, Evaldo
(Fred) Dupuy, Arthur D. Press, Charles Litt, Thomas W. Dwyer and Alyce B.
Schreiber.
FOR ( ) WITHHELD ( )
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name in the space provided)
- --------------------------------------------------------------------------------
2. In their discretion, the proxies are authorized to vote upon such other
business as may come before the meeting and at all adjournments thereof.
Dated:
-------------------------------
Signature:
---------------------------
Signature if held jointly:
----------------------------
Please sign exactly as named appears above. When shares are held by joint
tenants, both should sign. When signing as attorney, 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.
