<PAGE>
UNITED CAPITAL CORP.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 19, 1997
------------------------
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, 9 Park Place, Great Neck, New York 11021,
on June 19, 1997, 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 ratify the appointment of Arthur Andersen LLP as the Company's
independent auditors for the year ending December 31, 1997; and
3. 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 16, 1997 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
ANTHONY J. MICELI,
SECRETARY
Dated: May 19, 1997
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.
9 PARK PLACE
GREAT NECK, NEW YORK 11021
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
JUNE 19, 1997
------------------------
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 1997
Annual Meeting of Stockholders of the Company (the "Meeting") to be held at the
offices of the Company, 9 Park Place, Great Neck, New York 11021, on June 19,
1997, at 10:00 A.M., Local Time, or at any adjournment thereof.
The principal executive offices of the Company are located at 9 Park Place,
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, 1997.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on May 16, 1997, 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 5,282,723 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) for the
ratification of the appointment of Arthur Andersen LLP as the Company's
independent auditors for the year ending December 31, 1997 and (iii) 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
1
<PAGE>
brokers or nominees do not have discretionary power) will be treated as shares
that are present but which have not been voted.
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>
NAME AND ADDRESS SHARES PERCENTAGE
OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS(5)
- ----------------------------- -------------------- -----------
<S> <C> <C>
A.F. Petrocelli 3,016,424(1)(2) 55.8%
9 Park Place
Great Neck, NY 11021
Beverly Petrocelli 500,000(2) 9.5%
c/o 9 Park Place
Great Neck, NY 11021
Anthony J. Miceli 26,300(3) *
9 Park Place
Great Neck, NY 11021
Arnold S. Penner 0 --
545 Madison Avenue
4th Floor
New York, NY 10022
Howard M. Lorber 78,500(4) 1.5%
70 E. Sunrise Highway
Valley Stream, NY 11581
All executive officers and 3,121,224(1)(3)(4) 57.5%
directors as a group
(4 persons)
</TABLE>
- ------------------------
* Less than 1%
(1) Mr. Petrocelli owns directly 2,891,424 shares of Common Stock and presently
exercisable options to purchase 125,000 shares of Common Stock. 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) Consists of presently exercisable options to purchase 26,300 shares of
Common Stock.
2
<PAGE>
(4) Includes 21,700 shares owned by Mr. Lorber's wife and 36,800 shares owned by
the Howard M. Lorber Irrevocable Trust. Mr. Lorber disclaims beneficial
ownership of all shares owned by Mr. Lorber's wife and the Howard M. Lorber
Irrevocable Trust.
(5) Includes the shares of Common Stock subject to options (exercisable within
60 days after the Record Date) held by each of the named individuals or the
directors and executive officers as a group for purposes of calculating the
respective percentages of Common Stock owned by such individuals or by the
executive officers and directors as a group.
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 nonvotes 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. 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, 53 1981
President and Chief
Executive Officer of the Company
Anthony J. Miceli............... Vice President, Chief 34 1996
Financial Officer and
Secretary of the Company
Arnold S. Penner................ Self employed real estate 60 1989
investor and broker
Howard M. Lorber................ Chairman and Chief Executive 48 1991
Officer of Hallman &
Lorber 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").
ANTHONY J. MICELI, has been a Director and a Vice President and Chief
Financial Officer of the Company since June, 1996 and prior thereto was the
Corporate Controller of the Company for more than four years. Mr. Miceli is a
Certified Public Accountant and a member of the American Institute of Certified
Public Accountants and New Jersey Society of Certified Public Accountants.
3
<PAGE>
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 a shareholder of Aegis Capital Corp., a broker-dealer and a
member firm of the National Association of Securities Dealers, since 1984. Mr.
Lorber is also President and Chief Operating Officer and a member of the Board
of Directors of New Valley Corporation (formerly Western Union Corp.) as well as
Chairman of the Board of Directors and Chief Executive Officer of Nathan's. Mr.
Lorber is also a member of the Board of Directors of Prime Hospitality Corp. and
Alpine Lace Brands, Inc., and a Trustee of the Board of Long Island University.
Since before 1992, 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.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES.
MEETINGS
The Board of Directors held two meetings, during the year ended December 31,
1996. 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, non-employee, 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 1996 fiscal year, all
compensation awarded to, earned by or paid to the chief executive officer
("CEO") and the most highly compensated executive officer of the Company other
than the CEO who was an executive officer of the Company at the end of the
fiscal year ended December 31, 1996 and whose salary and bonus exceeded $100,000
(one individual) with respect to the fiscal year ended December 31, 1996.
4
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------------------------- ------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL COMPENSATION NUMBER OF COMPENSATION
POSITION YEAR SALARY($) BONUS($) ($)(1) OPTIONS ($)
- ----------------------------------- --------- ---------- ---------- ----------------- ----------- -----------------
A.F. Petrocelli, .................. 1996 $ 650,000 $ 700,000 -- -- --
Chairman of the 1995 650,000 700,000 -- -- -- --
Board, President 1994 650,000 700,000 -- --
and Chief Executive
Officer
Anthony J. Miceli, ................ 1996 $ 99,557 $ 50,000 -- 20,000 --
Vice President and 1995 90,088 30,000 -- -- -- --
Chief Financial 1994 84,999 30,000 -- --
Officer (2)
</TABLE>
- ------------------------
(1) Perquisites and other personal benefits, securities or property to each
executive officer did not exceed the lesser of $50,000 or 10% of such
executive officer's salary and bonus.
(2) Mr. Miceli became Vice President and Chief Financial Officer of the Company
in June 1996. Prior thereto, he was the Corporate Controller of the Company.
OPTION GRANTS DURING 1996 FISCAL YEAR
The following table provides information related to options to purchase
Common Stock granted to the named executive officers during 1996. The Company
currently does not have any plans providing for the grant of stock appreciation
rights.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS RATES
------------------------------ OF STOCK PRICE
% OF TOTAL APPRECIATION FOR
NUMBER OF OPTIONS EXERCISE OPTION
SECURITIES GRANTED TO OR BASE TERM(2)
UNDERLYING EMPLOYEES IN PRICE ---------------------
NAME OPTION(#)(1) FISCAL YEAR ($/SH)(2) EXPIRATION DATE 5% 10%
- ------------------------------------- ------------- --------------- ----------- -------------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Anthony J. Miceli.................... 20,000 100% $ 7.25 February 29, 2006 $ 91,200 $ 231,000
</TABLE>
- ------------------------
(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 Company's stock option
plans. The exercise price is equal to the fair market value of the Common
Stock on the date of grant.
(2) The potential realizable value portion of the foregoing table illustrates
values 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 upon the
market value of the Common Stock at a future date, and that value will
depend on a variety of factors, including the
5
<PAGE>
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.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table provides information related to options exercised by the
named executive officers during 1996 and the number and value of options held by
the named executive officers at fiscal year end.
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF SECURITIES UNDERLYING IN- THE-
MONEY
UNEXERCISED OPTIONS AT FY-END OPTIONS AT
COMMON FY-END
STOCK VALUE (#) ($)(2)
ACQUIRED ON REALIZED -------------------------------- -----------
NAME EXERCISE (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE
- ----------------------------------------- ------------ ---------- ----------- ------------------- -----------
<S> <C> <C> <C> <C> <C>
A.F. Petrocelli.......................... 100,000 $ 250,000 125,000 0 $ 93,750
Anthony J. Miceli........................ 0 0 26,300 0 $ 34,875
<CAPTION>
NAME UNEXERCISABLE
- ----------------------------------------- -------------------
<S> <C>
A.F. Petrocelli.......................... 0
Anthony J. Miceli........................ 0
</TABLE>
- ------------------------
(1) Such options had an exercise price of $5.50 per share. On the date of
exercise, the closing price of the Company's Common Stock was $8.00 as
reported on the American Stock Exchange ("AMEX").
(2) Based on the closing price of a share of Common Stock on December 31, 1996
of $8.75, as reported on the AMEX.
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
--------------------
<S> <C> <C> <C> <C> <C> <C>
SALARY 10 15 20 25 30 35
- -------------------- --------- --------- --------- --------- --------- ---------
$ 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>
6
<PAGE>
The Company did not make any contributions for the benefit of executive
officers for the year ended December 31, 1996.
The estimated credited years of service for each of the executive officers
named in the Summary Compensation Table is as follows: A.F. Petrocelli nine
years and Anthony J. Miceli nine years, respectively.
Subject to compensation limitations under the Employee Retirement Income
Security Act of 1974, which was $150,000 in 1996, 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 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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
A.F. Petrocelli serves on the Compensation Committee of Nathan's of which
Mr. Howard Lorber is Chairman of the Board and Chief Executive Officer. Mr.
Lorber is a member of the Compensation and Stock Option Committee of the
Company. For information relating to transactions involving Messrs., Petrocelli
and Lorber and the Company, see "Certain Relationships and Related
Transactions."
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
independent and non-employee directors.
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 the impact of
individual initiative and achievement on such financial 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 Internal Revenue 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 corporation's fiscal year and the four most highly
compensated officers of the corporation,
7
<PAGE>
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 qualifies as
"performance-based compensation."
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. Mr. Miceli's base salary is
determined by the Compensation and Stock Option Committee in consultation with
the Chairman of the Board, President and Chief Executive Officer of the Company.
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.
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 1997. Mr. Petrocelli
received a bonus in 1997 of $700,000 for services rendered during the 1996
fiscal year. The Compensation and Stock Option Committee awarded the bonus due
to (i) the increase in revenues of the Company's core businesses, and (ii) the
total revenues of the Company. At the Company's 1996 annual meeting of
stockholders, the stockholders approved a performance criteria which requires
the Company to achieve at least $70,000,000 in total revenues in order for the
Chief Executive Officer to be eligible to receive a bonus. For the fiscal year
ended December 31, 1996, this criteria was achieved.
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 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. and Pacific Gateway Properties, Inc.
The Peer Group consolidation was done on a weighted average basis (market
capitalization basis, adjusted at the end of each year). The graph assumes $100
invested on December 31, 1991, in the Company and each of the other indices.
8
<PAGE>
TOTAL RETURN TO SHAREHOLDERS REINVESTED DIVIDENDS
INDEXED RETURNS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DOLLARS
<S> <C> <C> <C>
Years Ending
United Capital Corp American Stock Exchange Peer Group
Dec-91 100.00 100.00 100.00
Dec-92 113.64 101.06 123.01
Dec-93 327.27 120.78 190.57
Dec-94 309.09 109.78 188.00
Dec-95 250.00 138.77 248.28
Dec-96 318.18 147.65 191.43
</TABLE>
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, 1996.
Specific descriptions of these transactions are provided below.
In September 1996, the Company purchased a 50% interest in a limited
partnership that owns and operates a hotel in Miami Beach, Florida. Through
December 31, 1996, the Company has invested approximately $624,000 for its
equity interest. In September 1996, the Company participated in a $2.5 million
loan transaction to the limited partnership secured by a mortgage lien against
the property. The Company advanced approximately $682,500 in connection with
this note. The remaining amounts were advanced by the following: A.F.
Petrocelli, $250,000; Beverly Petrocelli, $1 million; an officer of the Company,
$100,000; and the balance by unrelated parties. All amounts invested in and
advanced to the partnership by the Company have been classified as investments
in and advances to affiliates and are included in other assets in the
consolidated financial statements. The note bears interest at 14% per annum
payable monthly and matures in September 1997. The participants also received a
commitment fee of 4%. Upon maturity the note may be extended for a one year term
in consideration of 4% of the outstanding balance. A.F. Petrocelli disclaims
beneficial interest of the participation interest held by Beverly Petrocelli.
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
9
<PAGE>
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 bore interest at 14% per annum and was fully satisfied
together with accrued interest in August 1996. The participants also received a
commitment fee of 4% in connection with the loan. Arnold Penner was a
shareholder of the borrower and also a guarantor under 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 Beverly Petrocelli.
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 $159,000 for 1996.
In March 1997, the Company completed a $73,250,000 sales/leaseback
transaction with Kmart Corporation for two of its distribution centers located
in Brighton, Colorado and Greensboro, North Carolina. Kmart will lease these
facilities for a minimum of 25 years. These sites encompass over 2.7 million
square feet and service approximately 300 Kmart stores. The Company has taken a
50% equity interest in this transaction. Also participating in this transaction
were Beverly Petrocelli, Arnold Penner and Howard M. Lorber who, along with an
unrelated party, have taken approximately an 8% interest in this transaction.
A.F. Petrocelli disclaims beneficial ownership of the participation interest
held by Beverly Petrocelli.
During 1996 the Company advanced, in the aggregate, $468,000 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.
On July 19, 1996, Mr. Petrocelli sold 100,000 shares of Common Stock to the
Company for $10.00 per share.
The Company has Indemnity Agreements with certain directors (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.
PROPOSAL II--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, 1997. 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, 1996 were Arthur
Andersen LLP.
10
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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, 1997.
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 1996 Annual Report for
the year ended December 31, 1996, which contains certified consolidated
financial statements of the Company and its subsidiaries for the year ended
December 31, 1996.
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, 1996
(WITHOUT EXHIBITS), AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BY
WRITING TO ANTHONY J. MICELI, VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND
SECRETARY AT UNITED CAPITAL CORP., 9 PARK PLACE, GREAT NECK, NEW YORK 11021.
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 23, 1998.
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.
Anthony J. Miceli
SECRETARY
May 19, 1997
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
UNITED CAPITAL CORP.
Proxy -- Annual Meeting of Stockholders
June 19, 1997
The undersigned, a stockholder of United Capital Corp., a Delaware
corporation (the "Company"), does hereby appoint A.F. Petrocelli and Anthony J.
Miceli, 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 1997 Annual Meeting of
Stockholders of the Company to be held at the offices of the Company, 9 Park
Place, Great Neck, New York 11021, on June 19, 1997, 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, Anthony J.
Miceli, Arnold S. Penner, and A.F. Petrocelli 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), PRINT
FOR / / WITHHOLD VOTE / / NAME(S)
BELOW
------------------------------------------------------
2. 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, 1997.
/ / FOR / / AGAINST / / ABSTAIN
<PAGE>
3. 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
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, 1997, and a copy of either the
Company's Annual Report or Annual Report on Form 10-K for the year ended
December 31, 1996.
Dated ____________________
1997
___________________________
(L.S.)
