SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KA
(Mark One)
/X/ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
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/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 1-10104
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UNITED CAPITAL CORP.
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(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)
9 Park Place, Great Neck, New York 11021
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(Address of principal executive offices) (Zip code)
Issuer's telephone number, including area code: (516) 466-6464
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Securities registered under Section 12(b) of the Exchange Act:
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Title of Each Class Name of Each Exchange on Which Registered
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Common Stock, $.10 par value American Stock Exchange
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Securities registered pursuant to Section 12(g) of the Exchange Act:
None
Indicate by check mark whether the registrant: (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
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/
State the aggregate market value of the voting stock held by
non-affiliates of the registrant. The aggregate market value shall be computed
by reference to the price at which the stock was sold, or the average bid and
asked prices of such stock, as of a specified date within 60 days prior to the
date of filing. (See definition of affiliate in Rule 405).
As of March 21, 1996, the aggregate market value was $14,822,000.
The number of shares of the Registrant's $.10 par value Common Stock
outstanding as of March 21, 1996 was 5,546,079.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
MANAGEMENT
As of April 1, 1996, the executive officers and directors of the
Company are as follows:
<TABLE>
<CAPTION>
Name Principal Occupation Age
- -------------------------------- ------------------------------------------------- --------
<S> <C> <C>
A.F. Petrocelli Chairman of the Board, 52
President and Chief
Executive Officer of the
Company
Dennis S. Rosatelli Vice President, Chief 48
Financial Officer and
Secretary of the Company
Arnold S. Penner Self employed real estate 59
investor and broker
Howard M. Lorber President of Hallman & Lorber 47
Associates, Inc.
Robert J. McInerney Executive Vice President 50
</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 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 1991 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
<PAGE>
estate properties. Several of these partnerships filed for protection
under the federal bankruptcy laws in 1991.
ROBERT J. McINERNEY has been an Executive Vice President of the
Company since June 1995 and President of its Dorne-Margolin subsidiary
from August 1994 to June 1995. Prior thereto, Mr. McInerney was
President of the Commercial Products Division of Arrow Electronics
Inc. for more than five years.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth, for the Company's 1995 fiscal year, all
compensation awarded to, earned by or paid to the chief executive officer
("CEO") and the other two 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, 1995 whose salary and bonus exceeded $100,000
(two individuals) with respect to the fiscal year ended December 31, 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
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Other Annual All Other
Name and Principal Compensation Number of Compensation
Position Year Salary($) Bonus($) ($)(1) Options ($)
- ------------------------------- ------- ------------------- ---------- -------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
A.F. Petrocelli, 1995 $650,000 $700,000 ---- ---- ----
Chairman of the 1994 650,000 700,000 ---- ---- ----
Board, President 1993 650,000 700,000 ---- 100,000 ----
and Chief Executive
Officer
Dennis S. Rosatelli, 1995 $150,000 ---- ---- ---- ----
Vice President and 1994 150,000 $60,000 ---- ---- ----
Chief Financial 1993 150,000 60,000 ---- 5,000 ----
Officer
Robert J. McInerney, 1995 $180,000 ---- ---- ---- ----
Executive Vice 1994 ---- ---- ---- ---- ----
President (2) 1993 ---- ---- ---- ---- ----
</TABLE>
(1) Perquisites and other personal benefits, securities or property to each
executive officer did not exceed the lesser of $50,000 or 10% of such
executive officer's salary and bonus.
(2) Mr. McInerney became Executive Vice President of the Company in June
1995. Prior thereto, he was employed by a subsidiary of the Company. All
amounts shown reflect payments from the Company or from such subsidiary.
OPTION GRANTS DURING 1995 FISCAL YEAR
The Company granted no options during the fiscal year ended December 31,
1995 to Messrs. Petrocelli, Rosatelli or McInerney.
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<PAGE>
FISCAL YEAR END OPTION VALUES
No options were exercised by either Mr. Petrocelli or Mr. Rosatelli
during the fiscal year-ended December 31, 1995. Mr. McInerney holds no options.
The following table sets forth certain information regarding the options held by
executive officers during the fiscal year-ended December 31, 1995 by each of Mr.
Petrocelli and Mr. Rosatelli.
FISCAL YEAR-END OPTION VALUES
Number of Securities
Underlying Unexercised Value of Unexercised
Options at in-the-Money Options
December 31, 1995 at December 31, 1995
Exercisable/Unexercisable Exercisable/Unexercisable
(#) ($)(1)
Name ------------------------- ------------------------
- ----
A.F. Petrocelli......... 191,667/ $184,375/0
33,333(3)
Dennis S. Rosatelli..... 28,334/ $36,875/0
1,666(2)
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(1) Based on the closing price of a share of Common Stock ($6.875 as
reported by the American Stock Exchange on December 29,1995.)
(2) The unexercisable options held by Messrs. Petrocelli and Rosatelli
were not in the money at December 31, 1995.
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<PAGE>
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.
PROJECTED ANNUAL BENEFIT AT RETIREMENT
<TABLE>
<CAPTION>
Years of Service
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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, 1995.
The estimated credited years of service for each of the
executive officers named in the Summary Compensation Table is as
follows: A.F. Petrocelli eight years and Dennis S. Rosatelli
seven years, respectively. Mr. McInerney has less than one year
of credited years of service under the noncontributory pension
plan.
Subject to compensation limitations under the Employee Retirement Income
Security Act of 1974, which was $150,000 in 1995, 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
The Company has an 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
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<PAGE>
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 three
years salary and purchase outstanding options owned by Mr. Petrocelli. The
employment agreement provides 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.
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 1, 1996 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:
Name and Address Shares Percentage
Of Beneficial Owner Beneficially Owned of Class
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A.F. Petrocelli 3,094,091(1)(2) 53.9%
9 Park Place
Great Neck, NY 11021
Beverly Petrocelli 500,000(2) 9.0%
c/o 9 Park Place
Great Neck, NY 11021
Dennis S. Rosatelli 30,333(3) *
9 Park Place
Great Neck, NY 11021
Arnold S. Penner 20,000(4) *
950 Third Avenue
23rd Floor
New York, NY 10022
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<PAGE>
Name and Address Shares Percentage
Of Beneficial Owner Beneficially Owned of Class
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Howard M. Lorber 66,000(5) 1.2%
70 E. Sunrise Highway
Valley Stream, NY 11581
Robert J. McInerney - -
9 Park Place
Great Neck, NY 11021
All executive officers and 3,210,424(1)(3)(4) 55.3%
directors as a group (5)
(5 persons)
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*Less than 1%
(1) Mr. Petrocelli owns directly 2,902,424 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 66,667 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. 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. 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 3,333 shares of Common Stock at an exercise
price of $11.00 per share.
(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 21,700 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.
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<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, 1995.
Specific descriptions of these transactions are provided below.
In May 1995, the Company participated in a $4.5 million loan transaction
secured by an assignment of a mortgage note covering a commercial office
building in New York City. The Company advanced approximately $2.5 million in
connection with this loan. The remaining amounts were advanced by the following:
The Howard M. Lorber Irrevocable Trust, $500,000; Beverly Petrocelli, $1.45
million; and the balance by unrelated parties. The note bears interest at 14%
per annum, payable monthly and matures in May 1996. The participants also
received a commitment fee of 4% in connection with the loan. Upon maturity, the
note can be extended for two six month periods, each in consideration of 2% of
the outstanding balance and an additional eight month period in consideration of
3% of the outstanding balance. Arnold Penner is a shareholder of the borrower
and also a guarantor of the note. Howard M. Lorber disclaims beneficial
ownership of the participation interest held by the Trustees of the Howard M.
Lorber Irrevocable Trust. A.F. Petrocelli disclaims beneficial interest of the
participation interest held by his spouse.
The Company's two hotel properties are managed by a publicly traded
company for which A.F. Petrocelli and Howard M. Lorber are directors. Fees paid
for the management of these properties is based upon a percentage of revenue and
was approximately $120,000 for 1995. In addition, the Company has committed to
loan this company $4 million over a six year period. This loan will be secured
by a second mortgage on real property. No amounts have been advanced to date.
In May 1994, the Company participated in a $2,650,000 loan transaction
secured by a first mortgage covering a leasehold estate. The Company advanced
$265,000 in connection with this loan. The remaining amount was advanced by a
company in which Arnold Penner owns a substantial interest. The note bore
interest at 15% per annum, payable monthly and was fully satisfied together with
accrued interest in May 1995. In addition, the participants received a
commitment fee of 3% on their advances from the borrower.
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 1995 the Company advanced, in the aggregate, $415,000 to A.F.
Petrocelli. These advances bore interest at the Company's borrowing rate under
its revolving credit facility. All amounts advanced have been repaid together
with accrued interest thereon.
In April, 1994, the Company participated in a $5,000,000 loan
transaction secured by a second mortgage covering a leasehold estate.
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<PAGE>
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 (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
directors of the Company.
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 29, 1996 By:/S/ Dennis Rosatelli
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Dennis Rosatelli, Vice President and
Chief Financial Officer
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