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, 1996
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________________________ to __________________
Commission file number 1-10104
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
incorporation or organization) identification no.)
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
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, 1997,
the aggregate market value was $21,339,000.
The number of shares of the Registrant's $.10 par value Common Stock
outstanding as of March 21, 1997 was 5,279,723.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
MANAGEMENT
As of April 1, 1997, the executive officers and directors of the
Company are as follows:
Name Principal Occupation Age
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A.F. Petrocelli Chairman of the Board, 53
President and Chief
Executive Officer of the
Company
Anthony J. Miceli Vice President, Chief 34
Financial Officer and
Secretary of the Company
Arnold S. Penner Self employed real estate 60
investor and broker
Howard M. Lorber President of Hallman & Lorber 48
Associates, Inc.
A.F. PETROCELLI, has been Chairman of the Board and Chief Executive
Officer since December, 1987, President of the Company since June, 1991 and from
June, 1983 to March, 1989 and a Director of the Company since June 1981. Mr.
Petrocelli is a Director of Prime Hospitality Corp., a New York Stock Exchange
listed company, and a Director of Nathan's Famous Inc. ("Nathan's").
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.
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 the Chairman and Chief Executive Officer of Hallman & Lorber
Associates, Inc., a consulting and actuarial firm for pension and profit sharing
plans, since 1975. Mr. Lorber was also Chairman of the Board and Director of VTX
Electronics Corp., a distributor of wire and cable, from October 1991 until
April 1994. He 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
<PAGE>
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.
Item 11. 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, 1995 and whose salary and bonus exceeded $100,000
(one individual) with respect to the fiscal year ended December 31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
--------------------------------------------- ------------------------------
Other Annual All Other
Name and Principal Compensation Number of Compensation
Position Year Salary($) Bonus($) ($)(1) Options ($)
- ------------------------------- ------- ------------------- ---------- -------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
A.F. Petrocelli, 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 $99,577 $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 $50,000 or 10% of such
executive officer's salary and bonus.
(2) Mr. Miceli became Vice President and Chief Financial Officer of the
Company in June 1996. Prior thereto he was the Corporate Controller of
the Company.
Option Grants During 1996 Fiscal Year
The following table provides information related to options to purchase
Common Stock granted to the named executive officers during 1996. The Company
currently does not have any plans providing for the grant of stock appreciation
rights.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed Rates
of Stock Price
Appreciation for Option
Individual Grants Term(2)
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% of Total
Number of Options Exercise
Securities Granted to or Base
Underlying Employees in Price
Name Option(#)(1) Fiscal Year ($/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 $231,000
</TABLE>
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<PAGE>
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(1) The option exercise price may be paid in shares of Common Stock owned by
the executive, in cash, or a combination of any of the foregoing, as
determined by the Stock Option Committee administering the Company's
stock option plans. The exercise price is equal to the fair market value
of the Common Stock on the date of grant.
(2) The potential realizable value portion of the foregoing table
illustrates values that might be realized upon exercise of the options
immediately prior to the expiration of their term, assuming the
specified compounded rates of appreciation on the Company's Common Stock
over the term of the options. These numbers do not take into account
provisions of certain options providing for termination of the option
following termination of employment, non-transferability or differences
in vesting periods. Regardless of the theoretical value of an option,
its ultimate value will depend upon the market value of the Common Stock
at a future date, and that value will depend on a variety of factors,
including the overall condition of the stock market and the Company's
results of operations and financial condition. There can be no assurance
that the values reflected in this table will be achieved.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values
The following table provides information related to options exercised by
the named executive officers during 1996 and the number and value of options
held by the named executive officers at fiscal year end.
<TABLE>
<CAPTION>
Number of Securities Underlying
Common Unexercised Options at FY-End Value of Unexercised In-the-
Stock Value (#) Money Options at FY-End ($)(2)
Acquired on Realized ---------------------------------- --------------------------------
Name Exercise (#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- --------------------- ------------ --------- -------------- --------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
A.F. Petrocelli......... 100,000 $250,000 125,000 0 $93,750 0
Anthony J. Miceli ..... 0 0 26,300 0 $34,875 0
</TABLE>
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(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.
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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, 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 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 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
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<PAGE>
the Company or Mr. Petrocelli gives the other written notice that the employment
agreement is terminated.
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, 1997 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>
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*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
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<PAGE>
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.
(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 April 1, 1997) 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 directors and executive officers
as a group.
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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, 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 his spouse.
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 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
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 $159,000 for 1996.
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. Petocelli sold 100,000 shares of Common Stock to
the Company for $10.00 per share.
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<PAGE>
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.
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 30, 1997 By: /s/ Anthony J. Miceli
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Anthony J. Miceli, Vice President and
Chief Financial Officer
