<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
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 Section 240.14a-11(c) or Section
240.14a-12
United Capital Corp.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Merrill Corporation
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/X/ 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>
UNITED CAPITAL CORP.
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 13, 1995
------------------------
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of UNITED CAPITAL CORP, a Delaware corporation (the "Company"), will
be held at the offices of the Company, 111 Great Neck Road, Great Neck, New York
11021, on June 13, 1995, at 10:00 A.M., Local Time, for the following purposes:
1. To elect four (4) members of the Board of Directors to serve until
the next annual meeting of stockholders and until their successors have been
duly elected and qualified;
2. To provide performance criteria for the payment of bonuses to the
Chief Executive Officer of the Company;
3. To ratify the appointment of Arthur Andersen LLP as the Company's
independent auditors for the year ending December 31, 1995; and
4. To transact such other business as may properly be brought before
the Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on May 4, 1995 as the
record date for the Meeting. Only stockholders of record on the stock transfer
books of the Company at the close of business on that date are entitled to
notice of, and to vote at, the Meeting.
By Order of the Board of Directors
DENNIS S. ROSATELLI,
SECRETARY
Dated: May 19, 1995
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, YOU ARE URGED TO
FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE THAT IS
PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
UNITED CAPITAL CORP.
111 GREAT NECK ROAD
GREAT NECK, NEW YORK 11021
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
JUNE 13, 1995
------------------------
INTRODUCTION
This Proxy Statement is being furnished to stockholders by the Board of
Directors of United Capital Corp., a Delaware corporation (the "Company"), in
connection with the solicitation of the accompanying Proxy for use at the 1995
Annual Meeting of Stockholders of the Company (the "Meeting") to be held at the
offices of the Company, 111 Great Neck Road, Great Neck, New York 11021, on June
13, 1995, at 10:00 A.M., Local Time, or at any adjournment thereof.
The principal executive offices of the Company are located at 111 Great Neck
Road, Great Neck, New York 11021. The approximate date on which this Proxy
Statement and the accompanying Proxy will first be sent or given to stockholders
is May 19, 1995.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on May 4, 1995, the
record date (the "Record Date") for the Meeting, will be entitled to notice of,
and to vote at, the Meeting and any adjournment thereof. As of the close of
business on the Record Date, there were 5,973,483 outstanding shares of the
Company's common stock, $.10 par value (the "Common Stock"). Each of such shares
is entitled to one vote. There was no other class of voting securities of the
Company outstanding on that date. All shares of Common Stock have equal voting
rights. A majority of the outstanding shares of Common Stock present in person
or by proxy is required for a quorum.
VOTING OF PROXIES
Shares of Common Stock represented by Proxies, which are properly executed,
duly returned and not revoked will be voted in accordance with the instructions
contained therein. If no specification is indicated on the Proxy, the shares of
Common Stock represented thereby will be voted (i) for the election as Directors
of the persons who have been nominated by the Board of Directors, (ii) to
provide performance criteria for the payment of bonus compensation to the Chief
Executive Officer of the Company, (iii) for the ratification of the appointment
of Arthur Andersen LLP as the Company's independent auditors for the year ending
December 31, 1995 and (iv) for any other matter that may properly be brought
before the Meeting in accordance with the judgment of the person or persons
voting the Proxies.
The execution of a Proxy will in no way affect a stockholder's right to
attend the Meeting and vote in person. Any Proxy executed and returned by a
stockholder may be revoked at any time thereafter if written notice of
revocation is given to the Secretary of the Company prior to the vote to be
taken at the Meeting, or by execution of a subsequent proxy which is presented
to the Meeting, or if the stockholder attends the Meeting and votes by ballot,
except as to any matter or matters upon which a vote shall have been cast
pursuant to the authority conferred by such Proxy prior to such revocation. For
purposes of determining the presence of a quorum for transacting business at the
Meeting, abstentions and broker "non-votes" (i.e., proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have discretionary power)
will be treated as shares that are present but which have not been voted.
<PAGE>
The cost of solicitation of the Proxies being solicited on behalf of the
Board of Directors will be borne by the Company. In addition to the use of the
mails, proxy solicitation may be made by telephone, telegraph and personal
interview by officers, directors and employees of the Company. The Company will,
upon request, reimburse brokerage houses and persons holding Common Stock in the
names of their nominees for their reasonable expenses in sending soliciting
material to their principals.
SECURITY OWNERSHIP
The following table sets forth information concerning ownership of the
Company's Common Stock, as of the Record Date, by each person known by the
Company to be the beneficial owner of more than five percent of the Common
Stock, each director, each executive officer, and nominee for election as a
director and by all directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
SHARES PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
- ---------------------------------------------------------------------------- ------------------------ -----------
<S> <C> <C>
A.F. Petrocelli............................................................. 3,069,757(1)(2) 50.1%
111 Great Neck Road
Great Neck, NY 11021
Beverly Petrocelli.......................................................... 500,000(2) 8.4%
c/o 111 Great Neck Road
Great Neck, NY 11021
Dennis S. Rosatelli......................................................... 28,667(3) *
111 Great Neck Road
Great Neck, NY 11021
Arnold S. Penner............................................................ 20,000(4) *
545 Madison Avenue
7th Floor
New York, NY 10022
Howard M. Lorber............................................................ 63,000(5) 1.1%
70 E. Sunrise Highway
Valley Stream, NY 11581
All executive officers and directors as a group (4 persons)................. 3,181,424(1)(3)(4)(5) 51.3%
<FN>
- ------------------------
*Less than 1%
(1) Mr. Petrocelli owns directly 2,911,424 shares of Common Stock; presently
exercisable options to purchase 25,000 shares of Common Stock at an
exercise price of $5.00 per share; presently exercisable options to
purchase 100,000 shares of Common Stock at an exercise price of $5.50 per
share, and presently exercisable options to purchase 33,333 shares of
Common Stock at an exercise price of $11.00 per share. Does not include
shares held by the wife, adult children or the grandchildren of Mr.
Petrocelli. Mr. Petrocelli disclaims beneficial ownership of the shares
held by his wife, adult children and grandchildren.
(2) Beverly Petrocelli is the wife of Mr. Petrocelli. Does not include shares
held by the adult children or the grandchildren of Mrs. Petrocelli. Mrs.
Petrocelli disclaims beneficial ownership of the shares held by her
husband, adult children and grandchildren.
(3) 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; presently exercisable options to
purchase 20,000 shares of Common Stock at an exercise price of $5.50 per
share; and presently exercisable options to purchase 1,667 shares of Common
Stock at an exercise price of $11.00 per share.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
(4) Consists of presently exercisable options to purchase 20,000 shares of
Common Stock at an exercise price of $5.50 per share.
(5) 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>
PROPOSAL I -- ELECTION OF DIRECTORS
NOMINEES
Unless otherwise specified, all Proxies received will be voted in favor of
the election of the persons named below as directors of the Company, to serve
until the next Annual Meeting of Stockholders of the Company and until their
successors shall be duly elected and qualified. Directors shall be elected by a
plurality of the votes cast, in person or by proxy, at the Meeting. Abstentions
from voting and broker non-votes on the election of directors will have no
effect since they will not represent votes cast at the Meeting for the purpose
of electing directors. All nominees are currently directors of the Company and
were elected at the last Annual Meeting of Stockholders. The terms of the
current directors expire at the Meeting and when their successors are duly
elected and qualified. Management has no reason to believe that any of the
nominees will be unable or unwilling to serve as a director, if elected. Should
any of the nominees not remain a candidate for election at the date of the
Meeting, the Proxies will be voted in favor of those nominees who remain
candidates and may be voted for substitute nominees selected by the Board of
Directors. The names of the nominees and certain information concerning them are
set forth below:
<TABLE>
<CAPTION>
FIRST YEAR
BECAME
NAME PRINCIPAL OCCUPATION AGE DIRECTOR
- ------------------------------ ----------------------------------- --- ------------
<S> <C> <C> <C>
A.F. Petrocelli............... Chairman of the Board, President 51 1981
and Chief Executive Officer of the
Company
Dennis S. Rosatelli........... Vice President, Chief Financial 47 1991
Officer and Secretary of the
Company
Arnold S. Penner.............. Self employed real estate investor 58 1989
and broker
Howard M. Lorber.............. President of Hallman & Lorber 46 1991
Associates, Inc.
</TABLE>
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").
DENNIS S. ROSATELLI, has been a Director of the Company since January, 1991
and Vice President and Chief Financial 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 Board of Directors of Nathan's. Mr. Lorber is
3
<PAGE>
a member of the Boards of Directors of New Valley Corporation f/k/a Western
Union Corp., Prime Hospitality Corp. and Alpine Lace Brands, Inc., and a Trustee
of the Board of Long Island University. Since before 1990, 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 1990 and 1991.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES.
MEETINGS
The Board of Directors held one meeting, during the year ended December 31,
1994. 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 a 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 Company's 1988 Joint Incentive and Non-Qualified Stock Option Plan (the
"Joint Plan") and the 1988 Incentive Stock Option Plan (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 directors in the amount of $6,000 per annum
and $500 per Board meeting and Committee meeting attended.
EXECUTIVE COMPENSATION
The following table sets forth, for the Company's 1994 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, 1994 whose salary and bonus exceeded $100,000 (one
individual) with respect to the fiscal year ended December 31, 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------------- ------------------------------
OTHER ANNUAL ALL OTHER
COMPENSATION NUMBER OF COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) OPTIONS ($)
- ------------------------------------ --------- ----------- ----------- ----------------- ----------- -----------------
<S> <C> <C> <C> <C> <C> <C>
A.F. Petrocelli, Chairman of the 1994 $ 650,000 $ 700,000 -- -- --
Board, President and Chief 1993 650,000 700,000 -- 100,000 --
Executive Officer.................. 1992 650,000 700,000 -- -- --
Dennis S. Rosatelli, Vice President, 1994 $ 150,000 $ 60,000 -- -- --
Chief Financial Officer and 1993 150,000 60,000 -- 5,000 --
Secretary.......................... 1992 135,000 60,000 -- -- --
<FN>
- ------------------------
(1) Perquisites and other personal benefits, securities or property to each
executive officer did not exceed the lesser of $50,000 or 10% of such
executive officer's salary and bonus.
</TABLE>
OPTION GRANTS DURING 1994 FISCAL YEAR
The Company granted no options during the fiscal year ended December 31,
1994.
4
<PAGE>
FISCAL YEAR END OPTION VALUES
The following table sets forth certain information regarding the options
exercised and held by executive officers during the last fiscal year by each of
the executive officers named in the Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
SECURITIES IN-THE-MONEY
UNDERLYING OPTIONS
UNEXERCISED OPTIONS AT DECEMBER 31,
SHARES AT 1994
ACQUIRED ON DECEMBER 31, 1994 EXERCISABLE/
EXERCISE VALUE EXERCISABLE/ UNEXERCISABLE
NAME (#) REALIZED($) UNEXERCISABLE (#) ($)(1)
- -------------------------------------------- ----------- ---------------- ------------------- ---------------
<S> <C> <C> <C> <C>
158,333/
A.F. Petrocelli............................. 25,000 $ 156,250(2) 66,667(3) $ 387,500/0
26,667/
Dennis S. Rosatelli......................... 0 0 3,333(3) $ 77,500/0
<FN>
- ------------------------
(1) Based on the closing price of a share of Common Stock ($8.50 as reported by
the American Stock Exchange on December 31,1994.)
(2) Based on the fair market value of a share of Common Stock on the date of
exercise.
(3) The unexercisable options held by Messrs. Petrocelli and Rosatelli were not
in the money at December 31, 1994.
</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 Internal Revenue Code of 1986, as amended (the "Code").
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
</TABLE>
The Company did not make any contributions for the benefit of executive
officers for the year ended December 31, 1994.
The estimated credited years of service for each of the executive officers
named in the Summary Compensation Table is as follows: A.F. Petrocelli, seven
years and Dennis S. Rosatelli, six years, respectively.
5
<PAGE>
Subject to compensation limitations under the Employee Retirement Income
Security Act of 1974, which was $150,000 in 1994, 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 of 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.
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.
STOCK OPTION AGREEMENTS
On July 17, 1991 the Company entered into Stock Option Agreements with each
of Howard M. Lorber, Arnold S. Penner and Dennis S. Rosatelli 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.
COMPENSATION AND STOCK OPTION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL
The Compensation and Stock Option Committee determine the cash and other
incentive compensation, if any, to be paid to the Company's executive officers
and key employees. Messrs. Lorber and Penner, non-employee directors of the
Company, serve as members of the Compensation and Stock Option Committee and are
"disinterested directors" (within the meaning of Rule 16b-3 under the Act).
COMPENSATION PHILOSOPHY
The Compensation and Stock Option Committee's executive compensation
philosophy is to base management's pay, in part, to the achievement of the
Company's annual and long-term performance goals by (a) setting levels of
compensation designed to attract and hold superior executives in a highly
competitive business environment, (b) providing incentive compensation that
varies directly with the Company's financial performance and individual
initiative and achievement contributions to such performance, (c) linking
compensation to elements which effect the Company's annual and long-term
performance, (d) evaluating the competitiveness of executive compensation
programs based upon information drawn from a variety of sources, and (e)
establishing salary levels and bonuses intended to be consistent with
competitive practice and level of responsibility, with salary increases and
bonuses reflecting competitive trends, the overall financial performance of the
Company, the performance of the individual executive and the contractual
arrangements that may be in effect with the individual executive.
Section 162(m) of the Code, prohibits a publicly held corporation, such as
the Company, from claiming a deduction on its federal income tax return for
compensation in excess of $1 million paid for a given fiscal year to the chief
executive officer (or person acting in that capacity) at the close of the
6
<PAGE>
corporation's fiscal year and the four most highly compensated officers of the
corporation, other than the chief executive officer, at the end of the
corporation's fiscal year. The $1 million compensation deduction limitation does
not apply to "performance-based compensation." The Company believes that any
compensation received by executive officers in connection with the exercise of
options granted under the Joint Plan and the Incentive Plan as well as the bonus
paid to the Chief Executive Officer qualifies as "performance-based
compensation." The Company will continue to review its compensatory criteria and
plans and to assess the desirability of further revisions as the final
regulations are issued, the Internal Revenue Service begins to issue
interpretations, and competitive practices begin to emerge.
SALARIES
Base salaries for the Company's executive officers are determined initially
by evaluating the responsibilities of the position held and the experience of
the individual, and by reference to the competitive marketplace for management
talent, including a comparison of base salaries for comparable positions at
comparable companies within the Company's industries. Annual salary adjustments
are determined consistent with the Company's compensation policy by evaluating
the competitive marketplace, the performance of the Company, the performance of
the executive particularly with respect to the ability to manage growth of the
Company, the length of the executive's service to the Company and any increased
responsibilities assumed by the executive. The Company has an employment
agreement with Mr. Rosatelli, which sets the base salary for such executive.
ANNUAL BONUSES
The Company from time to time considers the payment of bonuses to its
executive officers although no formal plan currently exists. Bonuses would be
determined based, first, upon the level of achievement by the Company of its
strategic and operating goals and, second, upon the level of personal
achievement by participants. The achievement of personal goals includes the
actual performance of the Company for which the executive officer has
responsibility as compared to the planned performance thereof, other individual
contributions, the ability to manage and motivate reporting employees and the
achievement of assigned projects. Bonuses are determined annually after the
close of each fiscal year. In 1995, the Company awarded bonuses with respect to
services rendered in 1994 to Mr. Rosatelli in the amount of $60,000.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Mr. Petrocelli's base salary of $650,000 is based upon the terms of his
employment agreement and the factors described in the "Salaries" paragraph
above. Mr. Petrocelli will receive the same base salary in 1995. Mr. Petrocelli
received a bonus in 1995 of $700,000 for services rendered during the 1994
fiscal year. Mr. Petrocelli's bonus of $700,000 for the 1994 fiscal year is
based on criteria established by the Compensation and Stock Option Committee and
approved by the stockholders of the Company at the 1994 Annual Meeting of
Stockholders. Such criteria provided that Mr. Petrocelli would receive a bonus
of $700,000 if the Company achieved $80,000,000 in total revenues. In fiscal
1994, the Company's total revenues were $106,888,000, an increase of $37,332,000
from total 1993 revenues, and accordingly the Compensation and Stock Option
Committee have determined that the criteria was satisfied.
The Compensation and Stock Option Committee has recommended that the
stockholders approve a performance criteria which requires the Company to
achieve at least $85,000,000 in total revenues in order for the Chief Executive
Officer to be eligible to receive a bonus. This proposal is designed to qualify
bonuses paid to the Chief Executive Officer as "performance based" for purposes
of Section 162 of the Internal Revenue Code. See "Proposal II--Performance
Criteria for Chief Executive Officer Bonus Compensation."
Compensation and Stock Option Committee: Arnold S. Penner, and Howard M.
Lorber.
COMMON STOCK PERFORMANCE: Set forth below is a graph comparing the total
shareholder returns (assuming reinvestment of dividends, if any) of the Company,
AMEX and a peer group ("The
7
<PAGE>
Peer Group") compiled by the Company consisting of publicly traded companies in
industry segments corresponding to those in which the Company competes. The Peer
Group, which includes the Company consists of the following companies: Base Ten
Systems, Comtech Telecommunications, EDO Corporation, EQK Realty Investments,
Keystone Consolidated Industries, Inc., Larizza Industries, Inc., Pacific
Gateway Properties, Inc. and Watkins-Johnson Company.
The Peer Group consolidation was done on a weighted average basis (market
capitalization basis, adjusted at the end of each quarter). The graph assumes
$100 invested on December 31, 1989, in the Company and each of the other
indices.
TOTAL RETURN TO SHAREHOLDERS REINVESTED DIVIDENDS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
UNITED CAPITAL CORP AMERICAN STOCK EXCHANGE IND PEER GROUP
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 58.62 81.51 60.92
1991 75.86 104.51 61.60
1992 86.21 105.62 75.77
1993 248.28 126.23 117.38
1994 234.48 114.73 115.80
</TABLE>
8
<PAGE>
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, 1994.
Specific descriptions of these transactions are provided below.
In connection with the purchase of an interest in a real estate loan from
Arnold Penner in 1992 the Company issued a Note in the amount of $198,000. The
Note bore interest at 10% per annum and was fully satisfied in February 1995.
During 1994 the Company advanced, in the aggregate, $360,000 to A.F.
Petrocelli. These advances bore interest at 1% over the Company's borrowing rate
under its revolving credit facility. All amounts advanced have been repaid
together with accrued interest thereon.
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 bore interest at 15% per annum, payable monthly, and matured
and was fully satisfied in June 1994. Arnold S. Penner and an unrelated party
also held 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. Five Million Dollars
was 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), officers of
the Company ($39,000) and certain unrelated parties, including a former Director
($908,000). The note bore interest at 15% per annum, payable monthly and was
fully satisfied together with accrued interest in February 1995. In addition,
the participants received a commitment fee of 3% on their advances from the
borrower. 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.
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.
PROPOSAL II -- CRITERIA FOR CHIEF EXECUTIVE OFFICER BONUS
COMPENSATION PERFORMANCE
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1 million
paid to the corporation's Chief Executive Officer and the four other most highly
compensated executive officers. Qualifying performance-based compensation will
not be subject to the deduction limit if certain requirements are met. The
Company's Compensation and Stock Option Committee has structured a formula,
subject to stockholder approval, by which it believes all future bonuses payable
to its Chief Executive Officer are in a manner that complies with the new
statute. Under this formula, all bonuses to be paid to the Chief Executive
Officer will be based on the total revenues of the Company. The Chief Executive
Officer currently receives a base salary of $650,000 pursuant to the terms of
his employment contract. In any year that the total revenues of the Company
exceeds $85,000,000, the Chief Executive Officer will be entitled to receive a
bonus of $700,000. The revenue criteria will be adjusted in the next four years
by increases in the Consumer Price Index. The Compensation and Stock Option
Committee will certify that the performance goals have been satisfied before
payment of the bonus.
The Board of Directors and the Compensation and Stock Option Committee
recommend that stockholders vote in favor of this proposal. The Board of
Directors and the Compensation and Stock Option Committee believe that the Chief
Executive Officer of the Company should be awarded for the
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growth of the Company. The Board of Directors and the Compensation and Stock
Option Committee believe that if the Company were to meet the established target
it would demonstrate the value that the Chief Executive Officer provides to the
Company, particularly since several of the Company's core businesses are in
industries which have had little or no growth over the last few years. The Board
of Directors and the Compensation and Stock Option Committee expect these trends
to continue for the foreseeable future, and consequently they believe that the
bonus to the Chief Executive Officer should be awarded if the Company meets the
prescribed revenue targets. The Company and the Compensation and Stock Option
Committee will continue to review the performance goal to assess the
desirability of further revisions as the final regulations to Section 162(m) are
issued, the Internal Revenue Service begins to issue interpretations, and
competitive practices begin to emerge.
REQUIRED VOTE
The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock present, in person or by proxy and entitled to vote, is
required for approval of the Chief Executive Officer Bonus Compensation
Criteria. An abstention, withholding of authority to vote or broker non-vote,
therefore, will not have the same legal effect as an "against" vote and will not
be counted in determining whether the proposal has received the required
shareholder vote.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO PROVIDE
CRITERIA FOR THE COMPENSATION PAYABLE TO THE CHIEF EXECUTIVE OFFICER.
PROPOSAL III -- RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors appointed Arthur Andersen LLP, certified public
accountants, as the Company's independent auditors for the year ending December
31, 1995. Although the selection of auditors does not require ratification, the
Board of Directors has directed that the appointment of Arthur Andersen LLP be
submitted to stockholders for ratification due to the significance of their
appointment to the Company. If stockholders do not ratify the appointment of
Arthur Andersen LLP, the Board of Directors will consider the appointment of
other certified public accountants. The approval of the proposal to ratify the
appointment of Arthur Andersen LLP requires the affirmative vote of a majority
of the votes cast by all shareholders represented and entitled to vote thereon.
An abstention, withholding of authority to vote or broker non-vote, therefore,
will not have the same legal effect as an "against" vote and will not be counted
in determining whether the proposal has received the required shareholder vote.
The Company's auditors for the year ended December 31, 1994 were Arthur
Andersen LLP.
RECOMMENDATION
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT AUDITORS
FOR THE YEAR ENDING DECEMBER 31, 1995.
ANNUAL REPORT
All stockholders of record as of the Record Date, have been sent, or are
concurrently herewith being sent, a copy of the Company's 1994 Annual Report for
the year ended December 31, 1994, which contains certified consolidated
financial statements of the Company and its subsidiaries for the year ended
December 31, 1994.
ANY STOCKHOLDER OF THE COMPANY MAY OBTAIN WITHOUT CHARGE A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1994
(WITHOUT EXHIBITS), AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BY
WRITING TO DENNIS S. ROSATELLI, VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND
SECRETARY AT UNITED CAPITAL CORP., 111 GREAT NECK ROAD, GREAT NECK, NEW YORK
11021.
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STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the proxy materials to be
distributed in connection with the next Annual Meeting of Stockholders of the
Company, stockholder proposals for such meeting must be submitted to the Company
no later than January 24, 1996.
OTHER MATTERS
As of the date of this Proxy Statement, management knows of no matters other
than those set forth herein which will be presented for consideration at the
Meeting. If any other matter or matters are properly brought before the Meeting
or any adjournment thereof, the persons named in the accompanying Proxy will
have discretionary authority to vote, or otherwise act, with respect to such
matters in accordance with their judgment.
Dennis S. Rosatelli
SECRETARY
May 19, 1995
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
UNITED CAPITAL CORP.
PROXY -- ANNUAL MEETING OF STOCKHOLDERS
JUNE 13, 1995
The undersigned, a stockholder of United Capital Corp., a Delaware
corporation (the "Company"), does hereby appoint A.F. Petrocelli and Dennis S.
Rosatelli, and each of them, the true and lawful attorneys and proxies with full
power of substitution, for and in the name, place and stead of the undersigned,
to vote all of the shares of Common Stock of the Company which the undersigned
would be entitled to vote if personally present at the 1995 Annual Meeting of
Stockholders of the Company to be held at the offices of the Company, 111 Great
Neck Road, Great Neck, New York 11021, on June 13, 1995, at 10:00 A.M., Local
Time, or at any adjournment or adjournments thereof.
The undersigned hereby instructs said proxies or their substitutes:
1. ELECTION OF DIRECTORS:
The election of the following directors: Howard M. Lorber, Arnold S. Penner,
A.F. Petrocelli and Dennis S. Rosatelli to serve until the next annual
meeting of stockholders and until their successors have been duly elected
and qualified.
TO WITHHOLD AUTHORITY TO
VOTE FOR ANY NOMINEE(S),
FOR / / WITHHOLD VOTE / / PRINT NAME(S) BELOW
-------------------------
2. BONUS CRITERIA:
To approve the proposal to provide performance criteria for the payment of
bonuses to the Chief Executive Officer.
/ / FOR / / AGAINST / / ABSTAIN
3. RATIFICATION OF APPOINTMENT OF AUDITORS:
To ratify the appointment of Arthur Andersen LLP as the independent auditors
of the Company for the year ending December 31, 1995.
/ / FOR / / AGAINST / / ABSTAIN
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4. DISCRETIONARY AUTHORITY: To vote with discretionary authority with respect
to all other matters which may come before the Meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREINBEFORE
GIVEN. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO ELECT DIRECTORS,
TO PROVIDE PERFORMANCE CRITERIA FOR THE PAYMENT OF BONUSES TO THE CHIEF
EXECUTIVE OFFICER AND TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE
COMPANY'S INDEPENDENT AUDITORS.
The undersigned hereby revokes any proxy or proxies heretofore given, and
ratifies and confirms that all the proxies appointed hereby, or any of them, or
their substitutes, may lawfully do or cause to be done by virtue hereof. The
undersigned hereby acknowledges receipt of a copy of the Notice of Annual
Meeting and Proxy Statement, both dated May 19, 1995, and a copy of either the
Company's Annual Report or Annual Report on Form 10-K for the year ended
December 31, 1994.
Dated _________________ 1995
_____________________ (L.S.)
