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, 1997
/ / 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 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
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 ]
The aggregate market value of the shares of the voting stock
held by nonaffiliates of the Registrant as of March 5, 1998 was approximately
$41,138,000.
The number of shares of the Registrant's $.10 par value Common
Stock outstanding as of March 5, 1998 was 5,248,347.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
MANAGEMENT
As of April 1, 1998, the executive officers and directors of United
Capital Corp. (the "Company") are as follows:
Name Principal Occupation Age
---- -------------------- ---
A.F. Petrocelli Chairman of the Board, 54
President and Chief
Executive Officer of the
Company
Anthony J. Miceli Vice President, Chief 35
Financial Officer and
Secretary of the Company
Arnold S. Penner Self employed real estate 61
investor and broker
Howard M. Lorber Chairman and Chief Executive 49
Officer of Hallman &
Lorber Associates, Inc.
A.F. PETROCELLI, has been Chairman of the Board and Chief Executive
Officer since December, 1987, President of the Company since June, 1991 and from
June, 1983 to March, 1989 and a Director of the Company since June 1981. Mr.
Petrocelli is a Director of Prime Hospitality Corp., a New York Stock Exchange
listed company, a Director of Boyer Value Fund (a public mutual fund), a
Director of Philips International Realty Corp. ("Philips") 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 three 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. Mr. Penner is also a Director
of Philips.
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. He has been a shareholder of Aegis Capital Corp. ("Aegis"), a
broker-dealer and a member firm of the National Association of Securities
Dealers, since 1984 and is currently a registered representative of Aegis. 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
<PAGE>
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 a
Trustee of the Board of Long Island University. Since before 1993, 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 1997 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 during the fiscal year
ended December 31, 1997 and whose salary and bonus exceeded $100,000 (one
individual) with respect to the fiscal year ended December 31, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
--------------------------------------- ------------------------
Other Annual All Other
Name and Principal Compensation Number of Compensation
Position Year Salary($) Bonus($) ($)(1) Options ($)
-------- ---- --------- -------- ------ ------- ---
<S> <C> <C> <C> <C> <C> <C>
A.F. Petrocelli, 1997 $650,000 $700,000 ---- 222,381 ----
Chairman of the 1996 650,000 700,000 ---- ---- ----
Board, President 1995 650,000 700,000 ---- ---- ----
and Chief Executive
Officer
Anthony J. Miceli, 1997 $113,731 $100,000 ---- 30,000 ----
Vice President and 1996 99,557 50,000 ---- 20,000 ----
Chief Financial 1995 90,088 30,000 ---- ---- ----
Officer (2)
</TABLE>
(1) Perquisites and other personal benefits, securities or property to each
executive officer did not exceed the lesser of $50,000 or 10% of such
executive officer's salary and bonus.
(2) Mr. Miceli became Vice President and Chief Financial Officer of the
Company in June 1996. Prior thereto, he was the Corporate Controller of
the Company.
Option Grants During 1997 Fiscal Year
The following table provides information related to options to purchase
Common Stock granted to the CEO and the named executive officer during 1997. The
Company currently does not have any plans providing for the grant of stock
appreciation rights.
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<PAGE>
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed Rates
of Stock Price
Appreciation for Option
Individual Grants Term(2)
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% of Total
Number of Options Exercise
Securities Granted to or Base
Underlying Employees in Price
Name Option(#) Fiscal Year ($/Sh)(1) Expiration Date 5% 10%
- ------------------- ------------ -------------- ----------- --------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
A.F. Petrocelli 204,734 68.4 $17.00 June 18, 2007 $2,188,854 $5,546,986
17,647 5.9 $18.75 June 18, 2002 $52,002 $152,270
Anthony J. Miceli 15,000 5.0 $17.00 June 18, 2007 $160,368 $406,404
15,000 5.0 $18.75 June 18, 2007 $134,118 $380,154
</TABLE>
(1) The option exercise price may be paid in shares of Common Stock owned
by the executive, in cash, or a combination of any of the foregoing, as
determined by the Stock Option Committee administering the Company's
stock option plans. The exercise price is equal to or greater than the
fair market value of the Common Stock on the date of grant.
(2) The potential realizable value portion of the foregoing table
illustrates values that might be realized upon exercise of the options
immediately prior to the expiration of their term, assuming the
specified compounded rates of appreciation on the Company's Common
Stock over the term of the options. These numbers do not take into
account provisions of certain options providing for termination of the
option following termination of employment, non-transferability or
differences in vesting periods. Regardless of the theoretical value of
an option, its ultimate value will depend upon the market value of the
Common Stock at a future date, and that value will depend on a variety
of factors, including the overall condition of the stock market and the
Company's results of operations and financial condition. There can be
no assurance that the values reflected in this table will be achieved.
Fiscal Year End Option Values
No options were exercised in the Fiscal Year ended December 31, 1997 by
the executive officers. The following table provides information related to the
number and value of options held by the named executive officers at fiscal year
end.
<TABLE>
<CAPTION>
Number of Securities Underlying
Unexercised Options at FY-End Value of Unexercised In-the-
Name (#) Money Options at FY-End ($)(1)
- ----------------------------- --------------------------------- ------------------------------
Exercisable Unexercisable Exercisable Unexercisable
------------ -------------- ------------- -------------
<S> <C> <C> <C> <C>
A.F. Petrocelli.............. 125,000 222,381 $2,087,500 $2,081,738
Anthony J. Miceli .......... 26,300 30,000 $490,450 $258,750
</TABLE>
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<PAGE>
(1) Based on the closing price of a share of Common Stock on December 31,
1997 of $26.50, as reported on the American Stock Exchange ("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
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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
160,000............ 22,750 34,125 45,500 56,875 68,250 79,625
</TABLE>
The Company did not make any contributions for the benefit of executive
officers for the year ended December 31, 1997.
The estimated credited years of service for each of the executive
officers named in the Summary Compensation Table is as follows: A.F. Petrocelli
ten years and Anthony J. Miceli ten years, respectively.
Subject to compensation limitations under the Employee Retirement
Income Security Act of 1974, which was $160,000 in 1997, 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.
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<PAGE>
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.
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 30, 1998 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(6)
------------------- ------------------ -----------
A.F. Petrocelli 3,048,651(1)(2) 56.4%
9 Park Place
Great Neck, NY 11021
Beverly Petrocelli 500,000(2) 9.6%
c/o 9 Park Place
Great Neck, NY 11021
Anthony J. Miceli 36,300(3) *
9 Park Place
Great Neck, NY 11021
Arnold S. Penner 3,333(4) *
249 East 71st Street
New York, NY 10021
Howard M. Lorber 81,833(5) 1.6%
70 E. Sunrise Highway
Valley Stream, NY 11581
All executive officers and 3,170,117(1)(3) 58.2%
directors as a group (4 (4)(5)
persons)
* Less than 1%
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<PAGE>
(1) Mr. Petrocelli owns directly 2,849,524 shares of Common Stock and
presently exercisable options or options exercisable within 60 days of
April 30,1998 to purchase 199,127 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 or options exercisable within
60 days of April 30, 1998 to purchase 36,300 shares of Common Stock.
(4) Consists of 3,333 shares issuable upon the exercise of options which
are exercisable within 60 days of April 30, 1998.
(5) Includes 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. Also includes
3,333 shares issuable upon the exercise of options which are
exercisable within 60 days of April 30, 1998.
(6) Includes the shares of Common Stock subject to options which are
presently exercisable or exercisable within 60 day after April 30, 1998
held by 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.
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<PAGE>
Item 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following sets forth the transactions involving the Company and its
subsidiaries and its executive officers and/or Directors from January 1, 1997.
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, 1997, the Company has invested approximately $1,168,000 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 the participants also received a commitment fee of 4%. This
note matured in September 1997 and was extended in accordance with original
terms of the note, for one year, in consideration of a 4% commitment fee. A.F.
Petrocelli disclaims beneficial interest of the participation interest held by
Beverly Petrocelli.
In 1996 and 1997, in order to effectively manage the cost to the
Company of the remediation efforts at Metex Corporation ("Metex"), a
wholly-owned subsidiary of the Company, and its two New Jersey facilities, the
Company sold, in total, approximately a 4% interest for $40,000 in a subsidiary
that manages the Company's environmental remediation efforts to Anthony J.
Miceli an officer and Director of the Company and other employees, as well as an
interest to the Company's environmental consulting company. These shares contain
certain restrictions on transfer and, under certain circumstances, are
redeemable at the net book value of the subsidiary.
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 $143,000 for 1997.
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, who have taken approximately an 8% interest in this
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<PAGE>
transaction. A.F. Petrocelli disclaims beneficial ownership of the participation
interest held by Beverly Petrocelli.
During 1997 the Company advanced, in the aggregate, $398,000 to A.F.
Petrocelli and $375,000 to Mr. Miceli. 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.
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.
By: /s/ Anthony J. Miceli
---------------------------------
Anthony J. Miceli, Vice President
and Chief Financial Officer
Dated: April 30, 1998
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