<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-KA
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
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OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________________ to ________________
Commission file number 1-10104
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UNITED CAPITAL CORP.
- - -------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 04-2294493
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(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
111 Great Neck Road, Great Neck, New York 11021
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (516) 466-6464
---------------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
Common Stock (Par Value $.10 Per Share) American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark 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 preceding 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. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K 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-K or any amendment to this
Form 10-K. /X/
As of March 18, 1994, the aggregate market value of the Registrant's
outstanding voting Common Stock held by non-affiliates of the Registrant was
approximately $27,050,000
As of March 18, 1994, there were 6,091,561 shares outstanding of the
Registrant's Common Stock, $.10 par value.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following sets forth certain information with respect to the Directors
and Executive Officers of United Capital Corp. (the "Company"):
First Year
Name Principal Occupation Age Became Director
---- -------------------- --- ---------------
A.F. Petrocelli Chairman of the Board, 50 1981
President and Chief
Executive Officer of
the Company
Mason N. Carter President and Chief 48 1989
Executive Officer of
Kentile, Inc.
Dennis S. Rosatelli Vice President, Chief 46 1991
Financial Officer and
Secretary of the
Company
Arnold S. Penner Self employed real estate 57 1989
investor and broker
Howard M. Lorber President of Hallman & 45 1991
Lorber Associates, Inc.
A.F. PETROCELLI, has been Chairman of the Board and Chief Executive
Officer since December, 1987, President of the Company since June, 1991 and from
June, 1983 to March, 1989 and a Director of the Company since June 1981. Mr.
Petrocelli is a Director of Prime Hospitality Corp., a New York Stock Exchange
listed company, and a Director of Nathan's Famous Inc. ("Nathan's").
MASON N. CARTER, has been President and Chief Executive Officer of
Kentile, Inc. since March 1994 and was President and Chief Executive Officer of
Kentile Floors, Inc. and of Kentile, Inc. from November 1992 to March 1994.
Kentile Floors, Inc. was in bankruptcy prior to Mr. Carter becoming its
President and Chief Executive Officer. Mr. Carter was President and Chief
Operating Officer of Metex Corporation ("Metex"), a wholly-owned subsidiary of
the Company, from March, 1989 until November 1992 and prior thereto Mr. Carter
served Metex as: Chief Executive Officer since September 1987; and President and
Chief Operating Officer since February 1987. From March, 1989 to July 1990, Mr.
Carter was President and Chief Operating Officer of the Company.
DENNIS S. ROSATELLI, has been a Director of the Company since January,
1991 and Vice President and Chief Financial
<PAGE>
Officer of the Company since March, 1989. He is a Certified Public Accountant,
a member of the American Institute of Certified Public Accountants, a member of
the New Jersey Society of Public Accountants, and has been a member of the New
Jersey Society's Committee on Accounting and Audit Standards.
ARNOLD S. PENNER, has been a Director of the Company since 1989 and
has worked for more than the past five years as a private real estate investor
and as a self-employed real estate broker in New York.
HOWARD M. LORBER, has been a Director of the Company since May 1991.
Mr. Lorber has been President of Hallman & Lorber Associates, Inc., a consulting
and actuarial firm for pension and profit sharing plans, since 1975. Mr. Lorber
is Chairman of the Boards of Directors of Nathan's and VTX Electronics Corp.
(distributes wire and cable products). Mr. Lorber is a member of the Boards of
Directors of New Valley Corporation f/k/a Western Union Corp., SkyBox
International Corp. and Alpine Lace Brands, Inc., and a Trustee of the Board of
Long Island University. Since before 1988, Mr. Lorber has also been a general
partner or shareholder of a corporate general partner of various limited
partnerships organized to acquire and operate real estate properties. Several
of these partnerships filed for protection under the federal bankruptcy laws in
1989, 1990 and 1991.
MEETINGS
The Board of Directors held 6 meetings, during the year ended December
31, 1993, all but one of which was attended by all directors. From time to
time, the members of the Board of Directors act by unanimous written consent
pursuant to the laws of the State of Delaware.
The Company has a standing Audit Committee and Compensation and Stock
Option Committee whose members are Howard M. Lorber and Arnold S. Penner, the
independent directors of the Company. The Audit Committee annually recommends
to the Board of Directors independent public accountants as auditors of the
Company's books, records and accounts, reviews the scope of the audits performed
by such auditors and the audit reports prepared by them, and reviews and
monitors the Company's internal accounting procedures. The Compensation and
Stock Option Committee, which was formed in December 1993, recommends to the
Board of Directors compensation for the Company's key employees and administers
the Joint Plan and the Incentive Plan and awards stock options thereunder.
Directors of the Company who are not officers of the Company are
entitled to receive compensation for serving as
<PAGE>
directors in the amount of $6,000 per annum and $500 per Board meeting and
Committee meeting attended.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth, for the Company's 1993 fiscal year,
all compensation awarded to, earned by or paid to the chief executive officer
("CEO") and the other most highly compensated executive officers of the Company
other than the CEO who were executive officers of the Company during the fiscal
year ended December 31, 1993 whose salary and bonus exceeded $100,000 (two
individuals) with respect to the fiscal year ended December 31, 1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------------------------- -------------------------
Other Annual All Other
Name and Principal Salary Bonus Compensation Number of Compensation
Position Year ($) ($) ($)(1) Options ($)
- - ------------------ ---- ------- ----- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
A.F. Petrocelli, 1993 $650,000 $700,000 -- 100,000 --
Chairman of the 1992 650,000 700,000 -- -- --
Board, President 1991 650,000 700,000 -- 100,000 --
and Chief Executive
Officer
Dennis S. Rosatelli, 1993 $150,000 $60,000 -- 5,000 --
Vice President and 1992 135,000 60,000 -- -- --
Chief Financial 1993 125,000 55,000 -- 20,000 --
Officer
Bernard Turiel, 1993 $165,000(2) $25,000 -- -- --
Former Vice 1992 157,500 40,000 -- -- --
President-General 1991 100,000(2) 20,000 -- 40,000(3) --
Counsel and
Secretary
<FN>
(1) Perquisites and other personal benefits, securities or property to each
executive officer did not exceed the lesser of $50,000 or 10% of such
executive officer's salary and bonus.
(2) Mr. Turiel became Vice President and General Counsel of the Company on May
1, 1991. Mr. Turiel resigned as an executive officer of the Company on
December 31, 1993 and resigned as a Director of the Company on March 7,
1994.
(3) Of the options granted to Mr. Turiel, 20,000 options replaced 20,000
options granted to Mr. Turiel in 1987 which were not previously exercised.
</TABLE>
<PAGE>
OPTION GRANTS DURING 1993 FISCAL YEAR
The following table provides information related to options to purchase
Common Stock granted to the named executive officers during fiscal 1993. The
Company currently does not have any plans providing for the grant of stock
appreciation rights.
<TABLE>
<CAPTION>
Individual Grants
- - ------------------------------------------------------------------------------------------ Potential Realizable
Number of % of Total Value at Assumed Rates of
Securities Options Stock Price Appreciation
underlying Granted to Exercise or for Option Term(2)
Option Employees in Base Price -------------------------
Name (#)(1) Fiscal Year ($/Sh)(2) Expiration Date 5% 10%
---- ---------- ------------ ----------- --------------- -- ---
<S> <C> <C> <C> <C> <C> <C>
A.F. Petrocelli. . . . . 100,000(3) 79.3% $11.00(4) December 14, 2003 $447,450 $1,364,060
Dennis Rosatelli . . . . 5,000 3.9% $11.00(4) December 14, 2003 $22,373 $68,203
<FN>
- - --------------------
(1) The option exercise price may be paid in shares of Common Stock owned by
the executive, in cash, or a combination of any of the foregoing, as
determined by the Stock Option Committee administering the Plans.
(2) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of the options immediately prior
to the expiration of their term, assuming the specified compounded rates of
appreciation on the Company's Common Stock over the term of the options.
These numbers do not take into account provisions of certain options
providing for termination of the option following termination of
employment, non-transferability or differences in vesting periods.
Regardless of the theoretical value of an option, its ultimate value will
depend on the market value of the Common Shares at a future date, and that
value will depend on a variety of factors, including the overall condition
of the stock market and the Company's results of operations and financial
condition. There can be no assurance that the values reflected in this
table will be achieved.
(3) Includes options to purchase 45,000 shares which are subject to stockholder
approval of a proposal to increase the number of shares available under the
Plans.
(4) The fair market value of the Company's Common Stock on the date of the
grant was $9.50 per share.
</TABLE>
FISCAL YEAR END OPTION VALUES
No options were exercised by any executive officer in the fiscal year ended
December 31, 1993. The following table sets forth certain information regarding
the options held by executive officers during the last fiscal year by each of
the executive officers named in the Summary Compensation Table.
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised in-the-Money Options at
Options at December 31, December 31, 1993
1993 Exercisable/ Exercisable/
Name Unexercisable (#) Exercisable ($)(1)
- - --- --------------------- ----------------------
<S> <C> <C>
A.F. Petrocelli 150,000/ $537,500/0
100,000(2)
Dennis S. Rosatelli 25,000/ $ 90,000/0
5,000(2)
Bernard Turiel 40,000/0 $140,000/0
<FN>
- - --------------------
(1) Based on the closing price of a share of Common Stock ($9.00 as reported by
the American Stock Exchange ("AMEX") on December 31, 1993.)
(2) The unexercisable options held by Messrs. Petrocelli and Rosatelli were not
in the money at December 31, 1993.
</TABLE>
EMPLOYEE RETIREMENT PLAN
The Company, through one of its subsidiaries, has a noncontributory
pension plan that covers the executive officers of the Company. The following
table discloses estimated annual benefits payable upon retirement in specified
compensation and years of service classifications, based on current limits set
by the Tax Reform Act of 1986.
PROJECTED ANNUAL BENEFIT AT RETIREMENT
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------
SALARY 10 15 20 25 30 35
------
<S> <C> <C> <C> <C> <C> <C>
$ 20,000 $ 1,750 $ 2,625 $ 3,500 $ 4,375 $ 5,250 $ 6,125
30,000 3,250 4,875 6,500 8,125 9,750 11,375
40,000 4,750 7,125 9,500 11,875 14,250 16,625
50,000 6,250 9,375 12,500 15,625 18,750 21,875
60,000 7,750 11,625 15,500 19,375 23,250 27,125
70,000 9,250 13,875 18,500 23,125 27,750 32,375
80,000 10,750 16,125 21,500 26,875 32,250 37,625
90,000 12,250 18,375 24,500 30,625 36,750 42,875
100,000 13,750 20,625 27,500 34,375 41,250 48,125
150,000 21,250 31,875 42,500 53,125 63,750 74,375
200,000 28,750 43,125 57,500 71,875 86,250 100,625
228,860 33,079 49,619 66,158 82,698 99,237 112,221
</TABLE>
The Company did not make any contributions for the benefit of
executive officers for the year ended December 31, 1993.
<PAGE>
The estimated credited years of service for each of the executive
officers named in the Summary Compensation Table is as follows: A.F. Petrocelli
six, Bernard Turiel three years, and Dennis S. Rosatelli five years,
respectively.
Subject to limitations under the Employee Retirement Income Security
Act of 1974, which was $235,840 in 1993, benefits are computed as follows: For
each year of credited service after June 30, 1989, the sum of one percent (1%)
of annual compensation, as defined, up to $25,000 plus one and one-half percent
(1 1/2%) of annual compensation in excess of $25,000.
EMPLOYMENT CONTRACTS
Effective January 1, 1990, the Company entered into a five-year
employment contract with Mr. Petrocelli which provides for a base salary of
$650,000 per annum plus a bonus as determined by the Board of Directors. In the
event of a change of control in the Company as defined in the employment
agreement, the Company shall pay Mr. Petrocelli a lump sum severance payment
equal to the greater of three years salary or the salary for the remainder of
the initial term of the employment agreement and purchase outstanding options
owned by Mr. Petrocelli. The employment agreement was amended in December 1990
to provide that it will be automatically extended after December 31, 1995 for
successive one year terms unless either the Company or Mr. Petrocelli gives the
other written notice that the employment agreement is terminated.
In May, 1991 the Company entered into an employment agreement with
Bernard Turiel which provided for a base salary of $150,000 per annum plus a
bonus as determined by the Board of Directors but in no event less than $25,000
per annum. In January, 1993, the Board of Directors voted to increase Mr.
Turiel's base salary to $165,000 for the year ended December 31, 1993. Mr.
Turiel's employment contract allowed him to engage in the private practice of
law, provided such practice did not materially interfere with the performance of
his obligations to the Company. Mr. Turiel's employment agreement was
terminated effective upon Mr. Turiel's resignation as Vice President and General
Counsel of the Company on December 31, 1993.
Effective July 1, 1991, the Company entered into an employment
agreement with Dennis S. Rosatelli which provides for a base salary of $125,000
per annum plus a bonus as determined by the Board of Directors. In January,
1993, the Board of Directors voted to increase Mr. Rosatelli's base salary to
$150,000 for the year ended December 31, 1993.
<PAGE>
STOCK OPTION AGREEMENTS
On July 17, 1991 the Company entered into Stock Option Agreements with
each of Mason N. Carter, Howard M. Lorber, Arnold S. Penner, Dennis S. Rosatelli
and Bernard Turiel pursuant to which each of said individuals received
presently exercisable five-year options to purchase 20,000 shares of Common
Stock at an exercise price of $5.50 per share. Mr. Penner's options replaced
20,000 unexercised options granted to Mr. Penner in 1989 at an exercise price of
$9.00 per share.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information concerning ownership of the
Company's Common Stock, as of April 25, 1994, by each person known by the
Company to be the beneficial owner of more than five percent of the Common
Stock, each director and each executive officer and by all directors and
executive officers of the Company as a group:
<TABLE>
<CAPTION>
Name and Address Shares Percentage
Of Beneficial Owner Beneficially Owned of Class
- - ------------------------- ------------------ ----------
<S> <C> <C>
A.F. Petrocelli 3,068,324(1)(2) 49.2%
111 Great Neck Road
Great Neck, NY 11021
Beverly Petrocelli 500,000(2) 8.1%
c/o 111 Great Neck Road
Great Neck, NY 11021
Mason N. Carter 77,374(3) 1.3%
One Kentile Road
South Plainfield, NJ 07080
Dennis S. Rosatelli 27,000(4) *
111 Great Neck Road
Great Neck, NY 11021
Arnold S. Penner 20,000(5) *
110 E. 59th Street
32nd Floor
New York, NY 10022
Howard M. Lorber 63,000(6) 1.0%
70 E. Sunrise Highway
Valley Stream, NY 11581
All executive officers and 3,262,619(1)(3) 51.2%
directors as a group (5 (4)(5)(6)
persons)
<FN>
- - ---------------
* Less than 1%
</TABLE>
<PAGE>
<TABLE>
<C> <S>
(1) Mr. Petrocelli owns directly 2,918,324 shares of Common Stock; presently
exercisable options to purchase 25,000 shares of Common Stock at an
exercise price of $5.00 per share; and presently exercisable options to
purchase 125,000 shares of Common Stock at an exercise price of $5.50 per
share. Does not include shares held by the adult children or the
grandchildren of Mr. Petrocelli.
(2) Beverly Petrocelli is the wife of Mr. Petrocelli. Mr. Petrocelli disclaims
beneficial ownership of all shares held by Mrs. Petrocelli. Does not
include shares held by the adult children or the grandchildren of Mrs.
Petrocelli.
(3) Includes 2,000 shares of Common Stock jointly owned by Mr. Carter and his
wife; presently exercisable options to purchase 35,374 shares at an average
exercise price of $11.47 per share; presently exercisable options to
purchase 20,000 shares of Common Stock at an exercise price of $5.00 per
share; and presently exercisable options to purchase 20,000 shares of
Common Stock at an exercise price of $5.50 per share.
(4) Mr. Rosatelli owns directly 2,000 shares of Common Stock and holds
presently exercisable options to purchase 5,000 shares of Common Stock at
an exercise price of $5.00 per share, and presently exercisable options to
purchase 20,000 shares of Common Stock at an exercise price $5.50 per
share.
(5) Consists of presently exercisable options to purchase 20,000 shares of
Common Stock at an exercise price of $5.50 per share.
(6) Includes 18,700 shares owned by Mr. Lorber's wife, 24,300 shares owned by
the Howard M. Lorber Irrevocable Trust and presently exercisable options to
purchase 20,000 shares of Common Stock at an exercise price of $5.50 per
share. Mr. Lorber disclaims beneficial ownership of all shares owned by
Mr. Lorber's wife and the Howard M. Lorber Irrevocable Trust.
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The following sets forth the transactions involving the Company and its
subsidiaries and its executive officers and/or Directors from January 1, 1993.
Specific descriptions of these transactions is provided below.
In January, 1991, the Company purchased for $420,000, from an unrelated
third party, a 35% participation interest in a $1,200,000 loan secured by first
mortgages on seven parcels of real property, six of which are located in New
York City. In February, 1992, the Company purchased, for cash and notes, the
remaining 65% interest in the loan that it did not already own for the face
amount of the notes together with past due interest. The purchase price was
paid by approximately $201,000 in cash and the balance with notes in the
principal amounts of approximately $377,000 to Mr. Petrocelli, $198,000 to Mr.
Penner and the Arnold S. Penner Profit Sharing Plan, and $198,000 to an
unrelated third party. The notes bear interest at the rate of 10% per annum
beginning February 1, 1992. The note to Mr. Petrocelli matured and was paid in
June, 1992. Portions of the remaining notes were paid in November, 1992 and the
balance of those notes are due in February, 1995.
<PAGE>
During 1993 the Company advanced, in the aggregate, $3,411,833 to A.F.
Petrocelli. These advances bore interest at varying rates of 1% and 2% over the
Company's borrowing rate under its revolving credit facility. All amounts
advanced have been repaid together with accrued interest thereon.
In February, 1993, the Company participated in a $7,500,000 loan
transaction secured by a second mortgage covering the leasehold estate on a
prime hotel property in New York City. During 1993, $6,250,000 was advanced,
including approximately $1,652,000 by the Company, and the balance by Arnold S.
Penner ($1,666,667), Dennis S. Rosatelli ($40,000), Mason N. Carter ($25,000),
the Howard M. Lorber Irrevocable Trust ($500,000), the wife of A.F. Petrocelli
($200,000), entities or individuals related to a former Director and executive
officer ($500,000), and certain unrelated parties ($1,666,333). In connection
with this loan, a commitment fee in the net amount of $270,000 was prorated
among the participants in relation to the principal amount advanced and
committed to be advanced by each participant. The note bore interest at the
rate of 15% per annum, and was repaid in full in December 1993. Howard M.
Lorber disclaims beneficial ownership of the participation interest held by the
Trustees of the Howard M. Lorber Irrevocable Trust and A.F. Petrocelli disclaims
beneficial ownership of the participation interest held by his spouse.
In June 1993 the Company advanced approximately $89,000 in connection with
a $265,000 loan transaction secured by a first mortgage on a Brooklyn, New York
property. The loan bears interest at 15% per annum, payable monthly, and
matures in June 1994. Arnold Penner and an unrelated party also hold 1/3
interests in this loan.
In April, 1994, the Company participated in a $5,000,000 loan transaction
secured by a second mortgage covering a leasehold estate. To date, $5,000,000
has been advanced including approximately $2,253,000 by the Company and the
balance by Beverly Petrocelli ($1,000,000), the Howard M. Lorber Irrevocable
Trust ($500,000), Arnold S. Penner ($250,000), Dennis Rosatelli ($50,000), Mason
N. Carter ($30,000) and certain unrelated parties ($917,000). Howard M. Lorber
disclaims beneficial ownershp of the participation interest held by the Trustees
of the Howard M. Lorber Irrevocable Trust.
The Company has Indemnity Agreements with each director and executive
officer (individually each an "Indemnitee"), indemnifying each Indemnitee
against the various legal risks and potential liabilities to which such
individuals are subject due to their position with the Company, in order to
induce and encourage highly experienced and capable persons such as the
Indemnitees to continue to serve as executive officers and directors of the
Company.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 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.
UNITED CAPITAL CORP.
Dated: April 26, 1994 By: /s/ Dennis Rosatelli
----------------------------------------
Dennis Rosatelli
Chief Financial Officer
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 date indicated.
Dated: April 26, 1994 By: A. F. Petrocelli*
-------------- ------------------------------
A. F. Petrocelli
Chairman, President and
Chief Executive Officer
Dated: April 26, 1994 By: Mason N. Carter*
-------------- ------------------------------
Mason N. Carter
Director
Dated: April 26, 1994 By: Howard M. Lorber*
-------------- ------------------------------
Howard M. Lorber
Director
Dated: April 26, 1994 By: Arnold S. Penner*
-------------- ------------------------------
Arnold S. Penner
Director
Dated: April 26, 1994 By: /s/ Dennis S. Rosatelli
-------------- ------------------------------
Dennis S. Rosatelli
Chief Financial Officer,
Chief Accountant and
Director
By: /s/ Dennis Rosatelli
-----------------------------
*Dennis Rosatelli
Attorney-in-Fact
